\n THIRD PARTY PROVISIONS …………………………………………8.5
\n TITLE 8 ………………………………………………………1.1
\n TRANSFER AND GAINS TAXES ……………………………………….5.7
\n UNIT EXCHANGE RATIO ……………………………………………1.10(C)
\n WELFARE PLAN ………………………………………………….2.12
\n 1940 ACT ……………………………………………………..2.21<\/p>\n<\/c><\/s><\/table>\n
-vii-
\n 9<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of
\nSeptember 15, 1997 by and among EQUITY OFFICE PROPERTIES TRUST, a Maryland real
\nestate investment trust (“EOP”), EOP OPERATING LIMITED PARTNERSHIP, a Delaware
\nlimited partnership (“EOP Partnership”), BEACON PROPERTIES CORPORATION, a
\nMaryland corporation (“Beacon”), and BEACON PROPERTIES, L.P., a Delaware limited
\npartnership (“Beacon Partnership”).<\/p>\n
R E C I T A L S:<\/p>\n
A. The Board of Trustees of EOP and the Board of Directors of Beacon
\ndeem it advisable and in the best interests of their respective shareholders,
\nupon the terms and subject to the conditions contained herein, that Beacon shall
\nmerge with and into EOP (the “Merger”).<\/p>\n
B. Upon the terms and subject to the conditions set forth herein, EOP
\nand Beacon shall execute Articles of Merger (the “Articles of Merger”) in
\nsubstantially the form attached hereto as Exhibit A and shall file such Articles
\nof Merger in accordance with Maryland law to effectuate the Merger.<\/p>\n
C. EOP, as the managing general partner of EOP Partnership, and Beacon,
\nas the sole general partner of Beacon Partnership, deem it advisable and in the
\nbest interests of their respective limited partners, subject to the conditions
\nand other provisions contained herein, that Beacon Partnership shall merge with
\nand into EOP Partnership (or a limited liability company owned entirely,
\ndirectly and\/or indirectly, by EOP Partnership, or a limited partnership owned
\nentirely, directly and\/or indirectly, by EOP Partnership, as determined by EOP
\nand EOP Partnership), with the holders of partnership interests in Beacon
\nPartnership receiving in any event units of limited partnership interest in EOP
\nPartnership, as set forth herein (the “Partnership Merger” and, together with
\nthe Merger, the “Mergers”).<\/p>\n
D. Upon the terms and subject to the conditions set forth herein, EOP
\nPartnership and Beacon Partnership shall execute a Certificate of Merger (the
\n“Certificate of Merger”) in substantially the form attached hereto as Exhibit B
\nand shall file such Certificate of Merger in accordance with Delaware law to
\neffectuate the Partnership Merger.<\/p>\n
E. For federal income tax purposes, it is intended that the Merger
\nshall qualify as a tax-free reorganization under Section 368 of the Internal
\nRevenue Code of 1986, as amended (the “Code”), and that this Agreement shall
\nconstitute a plan of reorganization under Section 368 of the Code.<\/p>\n
F. For federal income taxes, it is intended that the Partnership
\nMerger, regardless of form, be treated as a contribution by Beacon Partnership
\nof all of its<\/p>\n
10<\/p>\n
assets to EOP Partnership in exchange for partnership interests in EOP
\nPartnership, as provided for herein, under Section 721 of the Code, and a
\ndistribution of such partnership interests by Beacon Partnership to its partners
\nunder Section 731 of the Code.<\/p>\n
G. EOP and Beacon have each received a fairness opinion relating to the
\ntransactions contemplated hereby as more fully described herein.<\/p>\n
H. EOP, EOP Partnership, Beacon and Beacon Partnership desire to make
\ncertain representations, warranties and agreements in connection with the
\nMergers.<\/p>\n
I. Concurrently with the execution of this Agreement and as an
\ninducement to EOP and EOP Partnership to enter into this Agreement, each of the
\nholders of voting capital stock of each of Beacon Property Management
\nCorporation, a Delaware corporation (the “Management Company”), Beacon Design
\nCorporation, a Massachusetts corporation (the “Design Company”), and Beacon
\nConstruction Company, Inc., a Massachusetts corporation (the “Construction
\nCompany”), other than Beacon Partnership, has entered into a Stock Purchase
\nAgreement relating to the voting capital stock of the respective companies (the
\n“Management Company Stock Purchase Agreement,” the “Design Company Stock
\nPurchase Agreement” and the “Construction Company Stock Purchase Agreement,”
\nrespectively and, collectively, the “Stock Purchase Agreements”), providing for
\nthe sale of all of the outstanding voting capital stock (other than any such
\nvoting capital stock held by Beacon Partnership) of the Management Company, the
\nDesign Company and the Construction Company, respectively, to Equity Office
\nProperties Management Corp. (“EOP Management Corp.”) or its assigns.<\/p>\n
J. As an inducement to EOP to enter into this Agreement, certain
\nmembers of the Leventhal and Sidman families and trusts and partnerships
\nestablished for the benefit of the members of the Leventhal and Sidman families
\nhave entered into or will (within ten (10) business days following the date of
\nthis Agreement) enter into a voting agreement (each, a “Beacon Voting
\nAgreement”) pursuant to which such person or entity has agreed, among other
\nthings, to vote his or its Beacon Common Shares (as defined in Section 1.10(a)
\nof this Agreement) and Beacon OP Units (as defined in Section 1.10(c) of this
\nAgreement) to approve this Agreement, the respective Mergers and any other
\nmatter which requires his or its vote in connection with the transactions
\ncontemplated by this Agreement.<\/p>\n
K. As an inducement to Beacon to enter into this Agreement, each of
\nseveral trusts established for the benefit of members of the family of Samuel
\nZell, Zell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership,
\nZell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership II,
\nZell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership III,
\nZell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership IV, ZML<\/p>\n
-2-
\n 11<\/p>\n
Partners Limited Partnership, ZML Partners Limited Partnership II, ZML Partners
\nLimited Partnership III and ZML Partners Limited Partnership IV has entered into
\nor will (within ten (10) business days of the date of this Agreement) enter into
\na voting agreement (each, an “EOP Voting Agreement”) pursuant to which such
\nperson or entity has agreed, among other things, to vote his or its EOP Common
\nShares (as defined in Section 1.10(a) of this Agreement) and EOP OP Units (as
\ndefined in Section 1.10(c) of this Agreement) to approve this Agreement, the
\nrespective Mergers and any other matter which requires his or its vote in
\nconnection with the transactions contemplated by this Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the premises and the mutual
\nrepresentations, warranties, covenants and agreements contained herein, the
\nparties hereto hereby agree as follows:<\/p>\n
ARTICLE 1<\/p>\n
THE MERGERS<\/p>\n
1.1 The Merger. Upon the terms and subject to the conditions set
\nforth in this Agreement, and in accordance with Title 8 of the Corporations and
\nAssociations Article of the Annotated Code of Maryland, as amended (“Title 8”),
\nand the Maryland General Corporation Law (“MGCL”), Beacon shall be merged with
\nand into EOP, with EOP as the surviving real estate investment trust (the
\n“Surviving Trust”).<\/p>\n
1.2 The Partnership Merger. Upon the terms and subject to the
\nconditions of this Agreement, and in accordance with Title 6, Chapter 17 of the
\nDelaware Code Annotated, as amended (the “DRULPA”), immediately following the
\nconsummation of the Merger, Beacon Partnership shall be merged with and into EOP
\nPartnership (or, at EOP Partnership’s option, a limited liability company owned
\nentirely, directly and\/or indirectly, by EOP Partnership, or a limited
\npartnership owned entirely, directly and\/or indirectly, by EOP Partnership, as
\ndetermined by EOP and EOP Partnership), with EOP Partnership (or such limited
\npartnership or limited liability company subsidiary) as the surviving limited
\npartnership or limited liability company (the “Surviving Partnership”), and with
\nthe holders of partnership interests in Beacon Partnership receiving in any
\nevent units of partnership interest in EOP Partnership, as set forth in Sections
\n1.9 and 1.10(c).<\/p>\n
1.3 Closing. The closing of the Mergers (the “Closing”) will take
\nplace at 10:00 a.m., local time on the date to be specified by the parties,
\nwhich (subject to satisfaction or waiver of the conditions set forth in Article
\n6) shall be no later than the third business day after satisfaction or waiver of
\nthe conditions set forth in Section 6.1(a) (the “Closing Date”), at the offices
\nof Goodwin, Procter & Hoar LLP, Exchange Place, Boston, Massachusetts 02109,
\nunless another date or place is agreed to in writing by the parties.<\/p>\n
-3-
\n 12<\/p>\n
1.4 Effective Time. As soon as practicable following the
\nsatisfaction or waiver of the conditions set forth in Article 6, EOP and Beacon
\nshall execute and file the Articles of Merger, executed in accordance with Title
\n8 and the MGCL, with the State Department of Assessments and Taxation of
\nMaryland (the “Department”), and shall execute and file the Certificate of
\nMerger, executed in accordance with the DRULPA, with the Office of the Secretary
\nof State of the State of Delaware (the “Secretary”) and shall make all other
\nfilings and recordings required, with respect to the Merger, under Title 8 and
\nthe MGCL or, with respect to the Partnership Merger, under the DRULPA. The
\nMergers shall become effective (the “Effective Time”) at such times as EOP and
\nBeacon shall agree should be specified in the Articles of Merger and the
\nCertificate of Merger (not to exceed thirty (30) days after the Articles of
\nMerger are accepted for record by the Department). Unless otherwise agreed, the
\nparties shall cause the Effective Time to occur on the Closing Date.<\/p>\n
1.5 Effect of Merger on Declaration of Trust and Bylaws. The
\nArticles of Amendment and Restatement of Declaration of Trust, as amended, of
\nEOP (the “EOP Declaration of Trust”) and the Bylaws of EOP (the “EOP Bylaws”),
\nas in effect immediately prior to the Effective Time, shall continue in full
\nforce and effect after the Merger until further amended in accordance with
\napplicable Maryland law.<\/p>\n
1.6 Effect of Merger on Agreement of Limited Partnership. The
\nAgreement of Limited Partnership, as amended, of EOP Partnership, as in effect
\nimmediately prior to the Effective Time (the “EOP Partnership Agreement”), shall
\ncontinue in full force and effect after the Merger until further amended in
\naccordance with applicable Delaware law.<\/p>\n
1.7 Trustees. The trustees of the Surviving Trust shall consist of
\nthe trustees of EOP immediately prior to the Effective Time, who shall continue
\nto serve for the balance of their unexpired terms or their earlier death,
\nresignation or removal, together with each of Alan M. Leventhal and Edwin
\nSidman, who shall, on the third business day after the Effective Time, become
\na trustee with a term expiring at the first annual meeting of shareholders of
\nEOP, and, in connection with such first annual meeting, EOP’s Board of Trustees
\nshall cause these two members to be nominated for election to the Board of
\nTrustees with terms expiring in 1999 and 2001, respectively; provided, however,
\nthat if notice with respect to the first annual meeting of shareholders of EOP
\nis mailed prior to the Effective Time, Alan M. Leventhal and Edwin Sidman shall
\ninstead, on the first business day after the first annual meeting of
\nshareholders of EOP, become trustees with terms expiring at the annual meetings
\nof shareholders of EOP in 1999 and 2001, respectively. In connection with the
\nsecond annual meeting of shareholders of EOP, EOP’s Board of Trustees shall
\ncause Alan M. Leventhal to be nominated for re-election as a trustee to the
\nBoard of Trustees with a term expiring at the annual meeting of shareholders of
\nEOP in 2002. Following their election as trustees, such persons shall serve<\/p>\n
-4-
\n 13<\/p>\n
for their designated terms, subject to their earlier death, resignation or
\nremoval. In addition, in the event that EOP’s current Chairman of the Board
\nceases to be Chairman of the Board of EOP prior to the Effective Time, EOP’s
\nBoard of Trustees shall designate Alan M. Leventhal as Chairman of the Board for
\na term consisting of at least twelve consecutive months (subject to his
\nremaining a trustee throughout such period of twelve months).<\/p>\n
1.8 Effect on Shares. The effect of the Merger on the shares of
\ncapital stock of Beacon shall be as provided in the Articles of Merger. The
\nMerger shall not change the shares of beneficial interest of EOP outstanding
\nimmediately prior to the Merger.<\/p>\n
1.9 Effect on Partnership Interests. The effect of the Partnership
\nMerger on the partnership interests of Beacon Partnership shall be as provided
\nin the Certificate of Merger. The Partnership Merger shall not change the
\npartnership interests of EOP Partnership outstanding immediately prior to the
\nMerger.<\/p>\n
1.10 Exchange Ratios.<\/p>\n
(a) The exchange ratio to be set forth in the Articles of
\nMerger (the “Exchange Ratio”) shall be 1.4063 of a common share of beneficial
\ninterest, $0.01 par value per share, of EOP (“EOP Common Share”) for each share
\nof common stock, $0.01 par value per share, of Beacon (“Beacon Common Share”)
\noutstanding immediately prior to the Effective Time.<\/p>\n
(b) The exchange ratio to be set forth in the Articles of
\nMerger (the “Preferred Exchange Ratio”) shall be one 8.98% Series A Cumulative
\nRedeemable preferred share of beneficial interest, liquidation preference $25.00
\nper share, of EOP (“EOP Preferred Share” and, together with the EOP Common
\nShares, the “Merger Consideration”) for each share of 8.98% Series A Cumulative
\nRedeemable Preferred Stock, liquidation preference $25.00 per share, of Beacon
\n(“Beacon Preferred Share”) outstanding immediately prior to the Effective Time.
\nThe holders of the EOP Preferred Shares issued in the Merger shall be entitled
\nto the same rights and privileges as the holders of the Beacon Preferred Shares
\noutstanding on the date hereof.<\/p>\n
(c) The exchange ratio to be set forth in the Certificate of
\nMerger (the “Unit Exchange Ratio”) shall be 1.4063 of a Class A Unit (as defined
\nin the EOP Partnership Agreement) of EOP Partnership (“EOP OP Unit”), for each
\nPartnership Unit (as defined in the Amended and Restated Agreement of Limited
\nPartnership of Beacon Partnership (the “Beacon Partnership Agreement”)) other
\nthan Series A Preferred Units (as defined in the Beacon Partnership Agreement)
\n(“Beacon OP Unit”) outstanding immediately prior to the Effective Time. The
\nholders of the EOP OP Units issued in the Partnership Merger shall be entitled
\nto redeem such EOP OP Units immediately following the consummation of the<\/p>\n
-5-
\n 14<\/p>\n
Partnership Merger (and thereafter) pursuant to the terms of the EOP Partnership
\nAgreement, and shall be entitled to the same rights and privileges as the
\nholders of EOP OP Units outstanding on the date hereof.<\/p>\n
(d) The exchange ratio to be set forth in the Certificate of
\nMerger (the “Preferred Unit Exchange Ratio”) shall be one 8.98% Series A
\nPreferred Unit of EOP Partnership (“EOP Preferred Unit”) for each unit of 8.98%
\nSeries A Preferred Unit of Beacon Partnership (“Beacon Preferred Unit”)
\noutstanding immediately prior to the Effective Time. EOP, as the holder of the
\nEOP Preferred Units issued in the Partnership Merger, shall be entitled to the
\nsame rights and privileges as Beacon, as the holder of the Beacon Preferred
\nUnits outstanding on the date hereof.<\/p>\n
1.11 Registration Rights Agreement. At the Effective Time, EOP will
\nassume in writing and succeed to all rights and obligations of Beacon pursuant
\nto the Registration Rights Agreements listed on Schedule 2.3 to the Beacon
\nDisclosure Letter.<\/p>\n
1.12 Partner Approval. Beacon shall seek the requisite approval of
\nthe partners of Beacon Partnership to the Partnership Merger to the extent
\nrequired by the Beacon Partnership Agreement and any other matters reasonably
\nrequested by either party to effectuate the transactions contemplated by this
\nAgreement (collectively, the “Beacon Partner Approvals”). EOP shall seek the
\nrequisite approval of the partners of EOP Partnership to the Partnership Merger
\nto the extent required by the EOP Partnership Agreement and any other matters
\nreasonably requested by either party to effectuate the transactions contemplated
\nby this Agreement (collectively, the “EOP Partner Approvals,” and together with
\nthe Beacon Partner Approvals, the “Partner Approvals”).<\/p>\n
1.13 No Appraisal Rights. The holders of Beacon Common Shares,
\nBeacon Preferred Shares, Beacon OP Units, EOP Shares, and EOP OP Units are not
\nentitled under applicable law to appraisal rights as a result of the Mergers.<\/p>\n
1.14 Exchange of Certificates; Pre-Closing Dividends; Fractional
\nShares.<\/p>\n
(a) Exchange Agent. Prior to the Effective Time, EOP shall
\nappoint the exchange agent identified in Exhibit A, or another bank or trust
\ncompany reasonably acceptable to Beacon, to act as exchange agent (the “Exchange
\nAgent”) for the exchange of the Merger Consideration upon surrender of
\ncertificates representing issued and outstanding Beacon Common Shares or Beacon
\nPreferred Shares, as applicable.<\/p>\n
(b) EOP to Provide Merger Consideration. EOP shall provide to
\nthe Exchange Agent on or before the Effective Time, for the benefit of the
\nholders <\/p>\n
-6-<\/p>\n
15<\/p>\n
of Beacon Common Shares and Beacon Preferred Shares, EOP Common Shares
\nand EOP Preferred Shares (the “Exchange Fund”) issuable in exchange for the
\nissued and outstanding Beacon Common Shares and Beacon Preferred Shares pursuant
\nto Section 1.10. Beacon shall provide to the Exchange Agent on or before the
\nEffective Time, for the benefit of the holders of Beacon Common Shares, cash
\npayable in respect of any dividends required pursuant to Section 1.14(d)(i) or
\n(ii).<\/p>\n
(c) Exchange Procedure. As soon as reasonably practicable after
\nthe Effective Time, the Exchange Agent shall mail to each holder of record of a
\ncertificate or certificates which immediately prior to the Effective Time
\nrepresented outstanding Beacon Common Shares and Beacon Preferred Shares (the
\n“Certificates”) whose shares were converted into the right to receive the Merger
\nConsideration pursuant to Section 1.10 (i) a letter of transmittal (which shall
\nspecify that delivery shall be effected, and risk of loss and title to the
\nCertificates shall pass, only upon delivery of the Certificates to the Exchange
\nAgent and shall be in a form and have such other provisions as EOP may
\nreasonably specify) and (ii) instructions for use in effecting the surrender of
\nthe Certificates in exchange for the Merger Consideration. Upon surrender of a
\nCertificate for cancellation to the Exchange Agent or to such other agent or
\nagents as may be appointed by EOP, together with such letter of transmittal,
\nduly executed, and such other documents as may reasonably be required by the
\nExchange Agent, the holder of such Certificate shall be entitled to receive in
\nexchange therefor the Merger Consideration into which the Beacon Common Shares
\nor Beacon Preferred Shares, as applicable, theretofore represented by such
\nCertificate shall have been converted pursuant to Section 1.10, as well as any
\ndividends or other distributions to which such holder is entitled pursuant to
\nSection 1.14(d), and the Certificate so surrendered shall forthwith be canceled.
\nIn the event of a transfer of ownership of Beacon Common Shares or Beacon
\nPreferred Shares which is not registered in the transfer records of Beacon,
\npayment may be made to a person other than the person in whose name the
\nCertificate so surrendered is registered if such Certificate shall be properly
\nendorsed or otherwise be in proper form for transfer and the person requesting
\nsuch payment either shall pay any transfer or other taxes required by reason of
\nsuch payment being made to a person other than the registered holder of such
\nCertificate or establish to the satisfaction of EOP that such tax or taxes have
\nbeen paid or are not applicable. Until surrendered as contemplated by this
\nSection 1.14, each Certificate shall be deemed at any time after the Effective
\nTime to represent only the right to receive upon such surrender the Merger
\nConsideration, without interest, into which the Beacon Common Shares or Beacon
\nPreferred Shares, as applicable, theretofore represented by such Certificate
\nshall have been converted pursuant to Section 1.10, and any dividends or other
\ndistributions to which such holder is entitled pursuant to Section 1.14(d). No
\ninterest will be paid or will accrue on the Merger Consideration upon the
\nsurrender of any Certificate or on any cash payable pursuant to Section 1.14(d)
\nor Section 1.14(g).<\/p>\n
-7-
\n 16<\/p>\n
(d) Record Dates for Final Dividends; Distributions with
\nRespect to Unexchanged Shares.<\/p>\n
(i) To the extent necessary to satisfy the requirements
\nof Section 857(a)(1) of the Code for the taxable year of Beacon ending at the
\nEffective Time (and avoid the payment of tax with respect to undistributed
\nincome), Beacon shall declare a dividend (the “Final Company Dividend”) to
\nholders of Beacon Common Shares, the record date for which shall be the close of
\nbusiness on the last business day prior to the Effective Time, in an amount
\nequal to the minimum dividend sufficient to permit Beacon to satisfy such
\nrequirements. If Beacon determines it necessary to declare the Final Company
\nDividend, it shall notify EOP at least ten (10) days prior to the date for the
\nBeacon Shareholders Meeting (as defined in Section 5.1), and EOP shall declare a
\ndividend per share to holders of EOP Common Shares, the record date for which
\nshall be the close of business on the last business day prior to the Effective
\nTime, in an amount per EOP Common Share equal to the quotient obtained by
\ndividing (x) the Final Company Dividend per Beacon Common Share paid by Beacon
\nby (y) the Exchange Ratio. The dividends payable hereunder to holders of Beacon
\nCommon Shares shall be paid upon presentation of the certificates of Beacon
\nCommon Shares for exchange in accordance with this Section 1.14.<\/p>\n
(ii) No dividends or other distributions with respect to
\nEOP Common Shares with a record date after the Effective Time shall be paid to
\nthe holder of any unsurrendered Certificate with respect to the shares of EOP
\nCommon Shares represented thereby, and no cash payment in lieu of fractional
\nshares shall be paid to any such holder pursuant to Section 1.14(g), in each
\ncase until the surrender of such Certificate in accordance with this Section
\n1.14. Subject to the effect of applicable escheat laws, following surrender of
\nany such Certificate there shall be paid to the holder of such Certificate,
\nwithout interest, (i) at the time of such surrender, the amount of any cash
\npayable in lieu of any fractional EOP Common Shares to which such holder is
\nentitled pursuant to Section 1.14(g) and (ii) if such Certificate is
\nexchangeable for one or more whole EOP Common Shares, (x) at the time of such
\nsurrender the amount of dividends or other distributions with a record date
\nafter the Effective Time theretofore paid with respect to such whole EOP Common
\nShares and (y) at the appropriate payment date, the amount of dividends or other
\ndistributions with a record date after the Effective Time but prior to such
\nsurrender and with a payment date subsequent to such surrender payable with
\nrespect to such whole EOP Common Shares.<\/p>\n
(e) No Further Ownership Rights in Beacon Common Shares and
\nBeacon Preferred Shares. All Merger Consideration paid upon the surrender of
\nCertificates in accordance with the terms of this Section 1.14 (and any cash
\npaid pursuant to Section 1.14(g)) shall be deemed to have been paid in full
\nsatisfaction of all rights pertaining to the Beacon Common Shares or Beacon
\nPreferred Shares, as <\/p>\n
-8-
\n 17<\/p>\n
applicable, theretofore represented by such Certificates; provided, however,
\nthat Beacon shall transfer to the Exchange Agent cash sufficient to pay any
\ndividends or make any other distributions with a record date prior to the
\nEffective Time which may have been declared or made by Beacon on such Beacon
\nCommon Shares or Beacon Preferred Shares, as applicable, in accordance with the
\nterms of this Agreement or prior to the date of this Agreement and which remain
\nunpaid at the Effective Time and have not been paid prior to such surrender, and
\nthere shall be no further registration of transfers on the stock transfer books
\nof Beacon of the Beacon Common Shares and Beacon Preferred Shares which were
\noutstanding immediately prior to the Effective Time. If, after the Effective
\nTime, Certificates are presented to EOP for any reason, they shall be canceled
\nand exchanged as provided in this Section 1.14.<\/p>\n
(f) No Liability. None of Beacon, EOP or the Exchange Agent
\nshall be liable to any person in respect of any Merger Consideration or
\ndividends delivered to a public official pursuant to any applicable abandoned
\nproperty, escheat or similar law. Any portion of the Exchange Fund delivered to
\nthe Exchange Agent pursuant to this Agreement that remains unclaimed for twelve
\n(12) months after the Effective Time shall be redelivered by the Exchange Agent
\nto EOP, upon demand, and any holders of Certificates who have not theretofore
\ncomplied with Section 1.14(c) shall thereafter look only to EOP for delivery of
\nthe Merger Consideration and any unpaid dividends, subject to applicable escheat
\nand other similar laws.<\/p>\n
(g) No Fractional Shares<\/p>\n
(i) No certificates or scrip representing fractional EOP
\nCommon Shares shall be issued upon the surrender for exchange of Certificates,
\nand such fractional share interests will not entitle the owner thereof to vote,
\nto receive dividends or to any other rights of a shareholder of EOP.<\/p>\n
(ii) No fractional EOP Common Shares shall be issued
\npursuant to this Agreement. In lieu of the issuance of any fractional EOP Common
\nShares pursuant to this Agreement, each holder of Beacon Common Shares upon
\nsurrender of a Certificate for exchange shall be paid an amount in cash (without
\ninterest), rounded to the nearest cent, determined by multiplying (i) the
\naverage closing price of one EOP Common Share on the New York Stock Exchange
\n(the “NYSE”) on the five trading days immediately preceding the Closing Date
\n(the “Fair Market Value”) by (ii) the fractional amount of the EOP Common Shares
\nwhich such holder would otherwise be entitled to receive under this Section
\n1.14.<\/p>\n
(h) Except for the provisions relating to the Exchange Agent,
\ncertificates and the exchange procedure (which shall not be applicable), all
\nother provisions of this Section 1.14 shall apply to Beacon Partnership, EOP
\nPartnership and the Beacon OP Units with respect to the Partnership Merger.<\/p>\n
-9-
\n 18<\/p>\n
ARTICLE 2<\/p>\n
REPRESENTATIONS AND WARRANTIES OF BEACON<\/p>\n
Except as set forth in the letter of even date herewith signed by
\nthe President and Chief Executive Officer or the Executive Vice President and
\nChief Operating Officer of Beacon and delivered to EOP prior to the execution
\nhereof (the “Beacon Disclosure Letter”), Beacon and Beacon Partnership
\nrepresent and warrant to EOP and EOP Partnership as follows:<\/p>\n
2.1 Organization, Standing and Power of Beacon. Beacon is a
\ncorporation duly organized, validly existing and in good standing under the laws
\nof Maryland. Beacon has all requisite corporate power and authority to own,
\noperate, lease and encumber its properties and carry on its business as now
\nbeing conducted. Beacon is duly qualified or licensed to do business as a
\nforeign corporation and is in good standing in each jurisdiction in which the
\nnature of its business or the ownership or leasing of its properties makes such
\nqualification or licensing necessary, other than in such jurisdictions where the
\nfailure to be so qualified or licensed, individually or in the aggregate, would
\nnot have a material adverse effect on the business, properties, assets,
\nfinancial condition or results of operations of Beacon and the Beacon
\nSubsidiaries (as defined below), taken as a whole (an “Beacon Material Adverse
\nEffect”). Beacon has delivered to EOP complete and correct copies of Beacon’s
\nArticles of Incorporation and Amended and Restated Bylaws, in each case, as
\namended or supplemented to the date of this Agreement.<\/p>\n
2.2 Beacon Subsidiaries.<\/p>\n
(a) Schedule 2.2 to the Beacon Disclosure Letter sets forth (i)
\neach Subsidiary (as defined below) of Beacon (the “Beacon Subsidiaries”), (ii)
\nthe ownership interest therein of Beacon, (iii) if not wholly owned by Beacon,
\nthe identity and ownership interest of each of the other owners of such Beacon
\nSubsidiary, (iv) each office property and other commercial property owned by
\nsuch Subsidiary, and (v) if not wholly owned by such Subsidiary, the identity
\nand ownership interest of each of the other owners of such property. As used in
\nthis Agreement, “Subsidiary” of any Person (as defined below) means any
\ncorporation, partnership, limited liability company, joint venture, trust or
\nother legal entity of which such Person owns (either directly or through or
\ntogether with another Subsidiary of such Person) either (i) a general partner,
\nmanaging member or other similar interest, or (ii)(A) 10% or more of the voting
\npower of the voting capital stock or other equity interests, or (B) 10% or more
\nof the outstanding voting capital stock or other voting equity interests of such
\ncorporation, partnership, limited liability company, joint venture or other
\nlegal entity. As used herein, “Person” means an individual, corporation,
\npartnership, limited liability company, joint venture, association, trust,
\nunincorporated organization or other entity. Schedule 2.4 sets forth a true and
\ncomplete list of the equity securities owned by Beacon, directly or indirectly,
\nin any corporation, partnership, limited liability company, joint venture or
\nother legal entity, excluding Beacon Subsidiaries.<\/p>\n
-10-<\/p>\n
19<\/p>\n
(b) Except as set forth in Schedule 2.2 to the Beacon Disclosure
\nLetter, (i) all of the outstanding shares of capital stock of each Beacon
\nSubsidiary that is a corporation have been duly authorized, validly issued and
\nare (A) fully paid and nonassessable and not subject to preemptive rights, (B)
\nowned by Beacon or by another Beacon Subsidiary and (C) owned free and clear of
\nall pledges, claims, liens, charges, encumbrances and security interests of any
\nkind or nature whatsoever (collectively, “Liens”) and (ii) all equity interests
\nin each Beacon Subsidiary that is a partnership, joint venture, limited
\nliability company or trust which are owned by Beacon, by another Beacon
\nSubsidiary or by Beacon and another Beacon Subsidiary are owned free and clear
\nof all Liens. Each Beacon Subsidiary that is a corporation is duly incorporated,
\nvalidly existing and in good standing under the laws of its jurisdiction of
\nincorporation and has the requisite corporate power and authority to own,
\noperate, lease and encumber its properties and carry on its business as now
\nbeing conducted, and each Beacon Subsidiary that is a partnership, limited
\nliability company or trust is duly organized, validly existing and in good
\nstanding under the laws of its jurisdiction of organization and has the
\nrequisite power and authority to own, operate, lease and encumber its properties
\nand carry on its business as now being conducted. Each Beacon Subsidiary is duly
\nqualified or licensed to do business and is in good standing in each
\njurisdiction in which the nature of its business or the ownership or leasing of
\nits properties makes such qualification or licensing necessary, other than in
\nsuch jurisdictions where the failure to be so qualified or licensed,
\nindividually or in the aggregate, would not have a Beacon Material Adverse
\nEffect. Complete and correct copies of the Articles of Incorporation, Bylaws,
\norganization documents and partnership, joint venture and operating agreements
\nof each Beacon Subsidiary, as amended to the date of this Agreement, have been
\npreviously delivered or made available to EOP. No effective amendment has been
\nmade to the Beacon Partnership Agreement since August 4, 1997.<\/p>\n
2.3 Capital Structure.<\/p>\n
(a) The authorized shares of capital stock of Beacon consist of
\n25,000,000 shares of preferred stock, $0.01 par value per share, 8,000,000 of
\nwhich are issued and outstanding on the date of this Agreement, 50,000,000
\nshares of excess stock, $0.01 par value per share, none of which are issued or
\noutstanding on the date of this Agreement, and 100,000,000 Beacon Common Shares,
\n55,599,850 of which were issued and outstanding as of September 12, 1997.<\/p>\n
(b) Set forth in Schedule 2.3(b) to the Beacon Disclosure
\nLetter is a true and complete list of the following: (i) each qualified or
\nnonqualified option to purchase shares of Beacon’s capital stock granted under
\nBeacon’s Amended and Restated 1994 Stock Option and Incentive Plan and Beacon’s
\n1996 Stock Option Plan or any other formal or informal arrangement
\n(collectively, the “Beacon Stock Options”); and (ii) all other warrants or
\nother rights to acquire shares of Beacon’s capital stock, all limited stock
\nappreciation rights, phantom<\/p>\n
-11-<\/p>\n
20
\nstock, dividend equivalents, performance units and performance shares which are
\noutstanding on the date of this Agreement. Schedule 2.3(b) to the Beacon
\nDisclosure Letter sets forth for each Beacon Stock Option the name of the
\ngrantee, the date of the grant, status of the option as qualified or
\nnonqualified under Section 422 of the Code, the number and type of shares of
\nBeacon’s capital stock subject to such option, the number and type of shares
\nsubject to options that are currently exercisable, the exercise price per
\nshare, and the number and type of such shares subject to share appreciation
\nrights. On the date of this Agreement, except as set forth in this Section 2.3
\nor in Schedule 2.3(b) to the Beacon Disclosure Letter, no shares of Beacon’s
\ncapital stock were outstanding or reserved for issuance.<\/p>\n
(c) All outstanding shares of Beacon’s capital stock are duly
\nauthorized, validly issued, fully paid and nonassessable and not subject to
\npreemptive rights. There are no bonds, debentures, notes or other indebtedness
\nof Beacon having the right to vote (or convertible into, or exchangeable for,
\nsecurities having the right to vote) on any matters on which shareholders of
\nBeacon may vote.<\/p>\n
(d) Except (i) as set forth in this Section 2.3 or in Schedule
\n2.3(d) to the Beacon Disclosure Letter and (ii) Beacon OP Units, which may be
\nredeemed for cash or, at the option of Beacon, Beacon Common Shares, as of the
\ndate of this Agreement, there are no outstanding securities, options, warrants,
\ncalls, rights, commitments, agreements, arrangements or undertakings of any kind
\nto which Beacon or any Beacon Subsidiary is a party or by which such entity is
\nbound, obligating Beacon or any Beacon Subsidiary to issue, deliver or sell, or
\ncause to be issued, delivered or sold, additional shares of capital stock,
\nvoting securities or other ownership interests of Beacon or any Beacon
\nSubsidiary or obligating Beacon or any Beacon Subsidiary to issue, grant, extend
\nor enter into any such security, option, warrant, call, right, commitment,
\nagreement, arrangement or undertaking (other than to Beacon or a Beacon
\nSubsidiary).<\/p>\n
(e) As of the date of this Agreement, 70,943,301 Beacon OP Units
\n(including 8,000,000 8.98% Series A Preferred Units) are validly issued and
\noutstanding, fully paid and nonassessable and not subject to preemptive rights,
\nof which 63,599,850 are owned by Beacon. Schedule 2.3(e) to the Beacon
\nDisclosure Schedule sets forth the name of each holder of Beacon OP Units and
\nthe number of Beacon OP Units owned by each such holder as of the date of this
\nAgreement. The Beacon OP Units are subject to no restrictions except as set
\nforth in the Beacon Partnership Agreement or in certain Lock-up Agreements
\nexecuted by certain holders of Beacon OP Units upon the issuance of such Beacon
\nOP Units. Except as provided in the Beacon Partnership Agreement, Beacon
\nPartnership has not issued or granted and is not a party to any outstanding
\ncommitments of any kind relating<\/p>\n
-12-<\/p>\n
21
\nto, or any presently effective agreements or understandings with respect to, the
\nissuance or sale of interests in Beacon Partnership, whether issued or unissued,
\nor securities convertible or exchangeable into interests in Beacon Partnership.<\/p>\n
(f) All dividends on Beacon Common Shares and Beacon Preferred
\nShares, and all distributions on Beacon OP Units (including Series A Preferred
\nUnits), which have been declared prior to the date of this Agreement have been
\npaid in full, except that certain dividends payable on Beacon Preferred Shares
\n(along with the corresponding distributions payable on Series A Preferred Units)
\nwhich were declared on September 2, 1997 and are payable on September 15, 1997
\nhave not yet been paid.<\/p>\n
(g) Set forth on Schedule 2.3(g) to the Beacon Disclosure Letter
\nis a list of each Registration Rights Agreement pursuant to which Beacon is
\nobligated to register any securities.<\/p>\n
2.4 Other Interests. Except for interests in the Beacon Subsidiaries
\nand certain other entities as set forth in Schedule 2.4 to the Beacon Disclosure
\nLetter (the “Beacon Other Interests”), neither Beacon nor any Beacon
\nSubsidiaries owns directly or indirectly any interest or investment (whether
\nequity or debt) in any corporation, partnership, joint venture, business, trust
\nor other entity (other than investments in short-term investment securities).
\nWith respect to the Beacon Other Interests, Beacon or Beacon Partnership is a
\npartner or stockholder in good standing, and owns such interests free and clear
\nof all Liens. Neither Beacon nor any Beacon Subsidiary is in material breach of
\nany provision of any agreement, document or contract which is of a material
\nnature governing its rights in or to the Beacon Other Interests, all of which
\nagreements, documents and contracts are (a) set forth in the Beacon Disclosure
\nLetter, (b) unmodified except as described therein and (c) in full force and
\neffect. To the Knowledge of Beacon, the other parties to any such agreement,
\ndocument or contract which is of a material nature are not in material breach of
\nany of their respective obligations under such agreements, documents or
\ncontracts.<\/p>\n
2.5 Authority; Noncontravention; Consents.<\/p>\n
(a) Beacon has the requisite corporate power and authority to
\nenter into this Agreement and, subject to the requisite shareholder approval of
\nthe Merger (the “Beacon Shareholder Approvals”), to consummate the transactions
\ncontemplated by this Agreement to which Beacon is a party. The execution and
\ndelivery of this Agreement by Beacon and the consummation by Beacon of the
\ntransactions contemplated by this Agreement to which Beacon is a party have been
\nduly authorized by all necessary action on the part of Beacon, except for and
\nsubject to the Beacon Shareholder Approvals and the Beacon Partner Approvals.
\nThis Agreement has been duly executed and delivered by Beacon and constitutes a
\nvalid and binding obligation of Beacon, enforceable against Beacon in accordance
\nwith <\/p>\n
-13-
\n 22<\/p>\n
and subject to its terms, subject to applicable bankruptcy, insolvency,
\nmoratorium or other similar laws relating to creditors’ rights and general
\nprinciples of equity.<\/p>\n
(b) Beacon Partnership has the requisite partnership power and
\nauthority to enter into this Agreement and, subject to the requisite Beacon
\nPartner Approvals, to consummate the transactions contemplated by this Agreement
\nto which Beacon Partnership is a party. The execution and delivery of this
\nAgreement by Beacon Partnership and the consummation by Beacon Partnership of
\nthe transactions contemplated by this Agreement to which Beacon Partnership is a
\nparty have been duly authorized by all necessary action on the part of Beacon
\nPartnership, except for and subject to the Beacon Shareholder Approvals and the
\nBeacon Partner Approvals. This Agreement has been duly executed and delivered by
\nBeacon Partnership and constitutes a valid and binding obligation of Beacon
\nPartnership, enforceable against Beacon Partnership in accordance with and
\nsubject to its terms, subject to applicable bankruptcy, insolvency, moratorium
\nor other similar laws relating to creditors’ rights and general principles of
\nequity.<\/p>\n
(c) Except as set forth in Schedule 2.5(c)(1) to the Beacon
\nDisclosure Letter, the execution and delivery of this Agreement by Beacon do
\nnot, and the consummation of the transactions contemplated by this Agreement to
\nwhich Beacon is a party and compliance by Beacon with the provisions of this
\nAgreement will not, conflict with, or result in any violation of, or default
\n(with or without notice or lapse of time, or both) under, or give rise to a
\nright of termination, cancellation or acceleration of any material obligation or
\nto material loss of a benefit under, or result in the creation of any Lien upon
\nany of the properties or assets of Beacon or any Beacon Subsidiary under, (i)
\nthe Articles of Incorporation or the Amended and Restated Bylaws of Beacon or
\nthe comparable charter or organizational documents or partnership, operating, or
\nsimilar agreement (as the case may be) of any Beacon Subsidiary, each as amended
\nor supplemented, (ii) any loan or credit agreement, note, bond, mortgage,
\nindenture, reciprocal easement agreement, lease or other agreement, instrument,
\npermit, concession, franchise or license applicable to Beacon or any Beacon
\nSubsidiary or their respective properties or assets or (iii) subject to the
\ngovernmental filings and other matters referred to in the following sentence,
\nany judgment, order, decree, statute, law, ordinance, rule or regulation
\n(collectively, “Laws”) applicable to Beacon or any Beacon Subsidiary, or their
\nrespective properties or assets, other than, in the case of clause (ii) or
\n(iii), any such conflicts, violations, defaults, rights, loss or Liens that
\nindividually or in the aggregate would not (x) have a Beacon Material Adverse
\nEffect or (y) prevent the consummation of the transactions contemplated by this
\nAgreement. No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with, any federal, state or local government or any court,
\nadministrative or regulatory agency or commission or other governmental
\nauthority or agency, domestic or foreign (a “Governmental Entity”), is required
\nby or with respect to Beacon or any Beacon Subsidiary in connection with the
\nexecution and delivery of this Agreement by <\/p>\n
-14-
\n 23<\/p>\n
Beacon or the consummation by Beacon of the transactions contemplated by this
\nAgreement, except for (i) the filing with the Securities and Exchange Commission
\n(the “SEC”) of the Proxy Statement (as defined in Section 5.1), (ii) the
\nacceptance for record of the Articles of Merger by the Department, (iii) the
\nfiling of the Certificate of Merger with the Secretary and (iv) such other
\nconsents, approvals, orders, authorizations, registrations, declarations and
\nfilings (A) as are set forth in Schedule 2.5(c)(2) to the Beacon Disclosure
\nLetter, (B) as may be required under (x) laws requiring transfer, recordation or
\ngains tax filings, (y) federal, state or local environmental laws or (z) the
\n“blue sky” laws of various states, to the extent applicable or (C) which, if not
\nobtained or made, would not prevent or delay in any material respect the
\nconsummation of any of the transactions contemplated by this Agreement or
\notherwise prevent Beacon from performing its obligations under this Agreement in
\nany material respect or have, individually or in the aggregate, a Beacon
\nMaterial Adverse Effect.<\/p>\n
2.6 SEC Documents; Financial Statements; Undisclosed Liabilities.
\nBeacon and Beacon Partnership have filed all required reports, schedules, forms,
\nstatements and other documents with the SEC since May 26, 1994 and April 9, 1997
\nrespectively, through the date hereof (the “Beacon SEC Documents”). Schedule
\n2.6(a) to the Beacon Disclosure Letter contains a complete list of all Beacon
\nSEC Documents filed by Beacon or Beacon Partnership with the SEC since January
\n1, 1997 and on or prior to the date of this Agreement. All of the Beacon SEC
\nDocuments (other than preliminary material), as of their respective filing
\ndates, complied in all material respects with all applicable requirements of the
\nSecurities Act and the Securities Exchange Act of 1934, as amended (the
\n“Exchange Act”), and, in each case, the rules and regulations promulgated
\nthereunder applicable to such Beacon SEC Documents. None of the Beacon SEC
\nDocuments at the time of filing contained any untrue statement of a material
\nfact or omitted to state any material fact required to be stated therein or
\nnecessary in order to make the statements therein, in light of the circumstances
\nunder which they were made, not misleading, except to the extent such statements
\nhave been modified or superseded by later Beacon SEC Documents filed and
\npublicly available prior to the date of this Agreement. The consolidated
\nfinancial statements of Beacon included in the Beacon SEC Documents or of Beacon
\nPartnership included in the Beacon SEC Documents complied as to form in all
\nmaterial respects with applicable accounting requirements and the published
\nrules and regulations of the SEC with respect thereto, have been prepared in
\naccordance with generally accepted accounting principles (“GAAP”) (except, in
\nthe case of unaudited statements, as permitted by the applicable rules and
\nregulations of the SEC) applied on a consistent basis during the periods
\ninvolved (except as may be indicated in the notes thereto) and fairly presented,
\nin accordance with the applicable requirements of GAAP and the applicable rules
\nand regulations of the SEC, the consolidated financial position of Beacon and
\nits Subsidiaries or Beacon Partnership and its Subsidiaries, as the case may be,
\nin each case taken as a whole, as of the dates <\/p>\n
-15-
\n 24<\/p>\n
thereof and the consolidated results of operations and cash flows for the
\nperiods then ended (subject, in the case of unaudited statements, to normal
\nyear-end audit adjustments). Except as set forth in Schedule 2.6(b) to the
\nBeacon Disclosure Letter, Beacon has no Subsidiaries which are not consolidated
\nfor accounting purposes. Except for liabilities and obligations set forth in the
\nBeacon SEC Documents or in Schedule 2.6(c) to the Beacon Disclosure Letter,
\nneither Beacon nor any of the Beacon Subsidiaries has any liabilities or
\nobligations of any nature (whether accrued, absolute, contingent or otherwise)
\nrequired by GAAP to be set forth on a consolidated balance sheet of Beacon or in
\nthe notes thereto and which, individually or in the aggregate, would have a
\nBeacon Material Adverse Effect.<\/p>\n
2.7 Absence of Certain Changes or Events. Except as disclosed in the
\nBeacon SEC Documents or in Schedule 2.7 to the Beacon Disclosure Letter, since
\nthe date of the most recent audited financial statements included in Beacon SEC
\nDocuments (the “Beacon Financial Statement Date”), Beacon and its Subsidiaries
\nhave conducted their business only in the ordinary course (taking into account
\nprior practices, including the acquisition of properties and issuance of
\nsecurities) and there has not been (a) any material adverse change in the
\nbusiness, financial condition or results of operations of Beacon and its
\nSubsidiaries taken as a whole (a “Beacon Material Adverse Change”), nor has
\nthere been any occurrence or circumstance that with the passage of time would
\nreasonably be expected to result in a Beacon Material Adverse Change, (b) except
\nfor regular quarterly distributions not in excess of $.56 per Beacon Preferred
\nShare or Beacon Preferred Unit or $.50 per Beacon Common Share or Beacon OP Unit
\n(other than Beacon Preferred Units), respectively (or, with respect to the
\nperiod commencing on the date hereof and ending on the Closing Date,
\ndistributions as necessary to maintain REIT status), in each case with customary
\nrecord and payment dates, any authorization, declaration, setting aside or
\npayment of any dividend or other distribution (whether in cash, stock or
\nproperty) with respect to the Beacon Common Shares, Beacon Preferred Shares or
\nBeacon OP Units, (c) any split, combination or reclassification of the Beacon
\nCommon Shares or the Beacon OP Units or any issuance or the authorization of any
\nissuance of any other securities in respect of, in lieu of or in substitution
\nfor, or giving the right to acquire by exchange or exercise, shares of stock of
\nBeacon or partnership interests in Beacon Partnership or any issuance of an
\nownership interest in, any Beacon Subsidiary, (d) any damage, destruction or
\nloss, whether or not covered by insurance, that has or would have a Beacon
\nMaterial Adverse Effect, (e) any change in accounting methods, principles or
\npractices by Beacon or any Beacon Subsidiary materially affecting its assets,
\nliabilities or business, except insofar as may have been disclosed in Beacon SEC
\nDocuments or required by a change in GAAP, or (f) any amendment of any
\nemployment, consulting, severance, retention or any other agreement between
\nBeacon and any officer or director of Beacon.<\/p>\n
-16-
\n 25<\/p>\n
2.8 Litigation. Except as disclosed in the Beacon SEC Documents or
\nin Schedule 2.8 to the Beacon Disclosure Letter, and other than personal injury
\nand other routine tort litigation arising from the ordinary course of operations
\nof Beacon and its Subsidiaries (a) which are covered by adequate insurance or
\n(b) for which all material costs and liabilities arising therefrom are
\nreimbursable pursuant to common area maintenance or similar agreements, there is
\nno suit, action or proceeding pending (in which service of process has been
\nreceived by an employee of Beacon or a Beacon Subsidiary) or, to the Knowledge
\nof Beacon (as hereinafter defined), threatened in writing against or affecting
\nBeacon or any Beacon Subsidiary that, individually or in the aggregate, could
\nreasonably be expected to (i) have a Beacon Material Adverse Effect or (ii)
\nprevent the consummation of any of the transactions contemplated by this
\nAgreement, nor is there any judgment, decree, injunction, rule or order of any
\ncourt or Governmental Entity or arbitrator outstanding against Beacon or any of
\nits Subsidiaries having, or which, insofar as reasonably can be foreseen, in the
\nfuture would have, any such effect. Notwithstanding the foregoing, (y) Schedule
\n2.8 to the Beacon Disclosure Letter sets forth each and every material uninsured
\nclaim, equal employment opportunity claim and claim relating to sexual
\nharassment and\/or discrimination pending or, to the Knowledge of Beacon,
\nthreatened as of the date hereof, in each case with a brief summary of such
\nclaim or threatened claim and (z) no claim has been made under any directors’
\nand officers’ liability insurance policy maintained at any time by Beacon or any
\nof the Beacon Subsidiaries; provided, however, that if Beacon or Beacon
\nPartnership has prepared Schedule 2.8 to the Beacon Disclosure Letter in good
\nfaith, EOP hereby covenants not to exercise any right that it may have to
\nterminate this Agreement pursuant to Section 7.1(b), based solely on any breach
\nof representation of Beacon and Beacon Partnership contained in this sentence;
\nprovided further, however, that nothing contained in this Section 2.8 shall
\naffect EOP’s right to terminate this Agreement pursuant to Section 7.1(b) with
\nrespect to any other matter described in clause (x) or (y) above that occurs or
\narises after the date hereof.<\/p>\n
2.9 Properties.<\/p>\n
(a) Except as provided in Schedule 2.2 or Schedule 2.9(a) to the
\nBeacon Disclosure Letter, Beacon or the Beacon Subsidiary set forth on Schedule
\n2.2 to the Beacon Disclosure Letter owns fee simple title to each of the real
\nproperties identified in Schedule 2.2 to the Beacon Disclosure Letter (the
\n“Beacon Properties”), which are all of the real estate properties owned by them,
\nin each case (except as provided below) free and clear of liens, mortgages or
\ndeeds of trust, claims against title, charges which are liens, security
\ninterests or other <\/p>\n
-17-
\n 26<\/p>\n
encumbrances on title (“Encumbrances”). Except as set forth in Schedule 2.2 to
\nthe Beacon Disclosure Letter, no other Person has any ownership interest in any
\nof the Beacon Properties, and any such ownership interest so scheduled does not
\nmaterially detract from the value of the Beacon Subsidiary’s interest in, or
\nmaterially interfere with the present use of, any of the Beacon Properties
\nsubject thereto or affected thereby. Except as set forth in Schedule 2.9(a) to
\nthe Beacon Disclosure Letter, none of the Beacon Properties is subject to any
\nrestriction on the sale or other disposition thereof or on the financing or
\nrelease of financing thereon. The Beacon Properties are not subject to any
\nrights of way, written agreements, laws, ordinances and regulations affecting
\nbuilding use or occupancy, or reservations of an interest in title
\n(collectively, “Property Restrictions”) or Encumbrances, except for (i) Property
\nRestrictions and Encumbrances set forth in the Beacon Disclosure Letter, (ii)
\nProperty Restrictions imposed or promulgated by law or any governmental body or
\nauthority with respect to real property, including zoning regulations, which do
\nnot materially adversely affect the current use of any Beacon Property, (iii)
\nProperty Restrictions and Encumbrances disclosed on existing title reports or
\nexisting surveys or subsequently granted by Beacon or the Beacon Subsidiary,
\nwhich Property Restrictions and Encumbrances, in any event, do not materially
\ndetract from the value of, or materially interfere with the present use of, any
\nof the Beacon Properties subject thereto or affected thereby and (iv) liens for
\nreal estate taxes not yet due and payable, mechanics’, carriers’, workmen’s,
\nrepairmen’s liens and other Encumbrances and Property Restrictions, if any,
\nwhich, individually or in the aggregate, do not materially detract from the
\nvalue of or materially interfere with the present use of any of the Beacon
\nProperty subject thereto or affected thereby. Schedule 2.9(a) to the Beacon
\nDisclosure Letter lists each of the Beacon Properties which are under
\ndevelopment as of the date of this Agreement and describes the status of such
\ndevelopment as of the date hereof.<\/p>\n
(b) Except as provided in Schedule 2.2 or Schedule 2.9(b) to the
\nBeacon Disclosure Letter, valid policies of title insurance have been issued
\ninsuring the applicable Beacon Subsidiary’s fee simple title or leasehold
\nestate, as the case may be, to the Beacon Properties owned by it in amounts at
\nleast equal to the purchase price therefor paid by such Beacon Subsidiary,
\nsubject only to the matters disclosed above and in the Beacon Disclosure Letter.
\nSuch policies are, at the date hereof, in full force and effect. No claim has
\nbeen made against any such policy.<\/p>\n
(c) Except as provided in Schedule 2.9(c) to the Beacon
\nDisclosure Letter, Beacon has no Knowledge (i) that, any certificate, permit or
\nlicense from any governmental authority having jurisdiction over any of the
\nBeacon Properties or any agreement, easement or other right which is necessary
\nto permit the lawful use and operation of the buildings and improvements on any
\nof the Beacon Properties or which is necessary to permit the lawful use and
\noperation of all driveways, roads and other means of egress and ingress to and
\nfrom any of the <\/p>\n
-18-
\n 27<\/p>\n
Beacon Properties has not been obtained and is not in full force
\nand effect, or of any pending threat of modification or cancellation of any of
\nsame which would have a material adverse effect on such Beacon Property, (ii) of
\nany written notice of any violation of any federal, state or municipal law,
\nordinance, order, regulation or requirement materially and adversely affecting
\nany of the Beacon Properties issued by any governmental authority, (iii) of any
\nstructural defects relating to any Beacon Property which would have a material
\nadverse effect on such Beacon Property, (iv) of any Beacon Property whose
\nbuilding systems are not in working order so as to have a material adverse
\neffect on such Beacon Property, or (v) of any physical damage to any Beacon
\nProperty which would have a material adverse effect on such Beacon Property for
\nwhich there is no insurance in effect covering the cost of the restoration.<\/p>\n
(d) Neither Beacon nor any Beacon Subsidiary has received any
\nwritten or published notice to the effect that (i) any condemnation or rezoning
\nproceedings are pending or threatened with respect to any of the Beacon
\nProperties or (ii) any zoning, building or similar law, code, ordinance, order
\nor regulation is or will be violated by the continued maintenance, operation or
\nuse of any buildings or other improvements on any of the Beacon Properties or by
\nthe continued maintenance, operation or use of the parking areas. Except as set
\nforth in Schedule 2.9(d) to the Beacon Disclosure Letter, all work required to
\nbe performed, payments required to be made and actions required to be taken
\nother than those which would not have a material adverse effect on any of Beacon
\nor the Beacon Subsidiaries prior to the date hereof pursuant to any agreement
\nentered into with a governmental body or authority in connection with a site
\napproval, zoning reclassification or other similar action relating to any Beacon
\nProperties (e.g., Local Improvement District, Road Improvement District,
\nEnvironmental Mitigation) have been performed, paid or taken, as the case may
\nbe, and Beacon has no Knowledge of any planned or proposed work, payments or
\nactions that may be required after the date hereof pursuant to such agreements,
\nexcept as set forth in development or operating budgets for such Beacon
\nProperties delivered to EOP and EOP Partnership prior to the date hereof.<\/p>\n
(e) The rent roll previously provided by Beacon to EOP (the
\n“Beacon Rent Roll”) lists each Beacon Space Lease (as defined below) in effect
\nas of April 1, 1997. “Beacon Space Lease” means each lease or other right of
\noccupancy affecting or relating to a property in which Beacon Partnership (or an
\nentity in which it directly or indirectly has an interest) is the landlord,
\neither pursuant to the terms of the lease agreement or as successor to any prior
\nlandlord, but excluding any ground lease. Beacon has made available to EOP true,
\ncorrect and complete copies of all Beacon Space Leases, including all
\namendments, modifications, supplements, renewals, extensions and guarantees
\nrelated thereto, as of the date hereof. Except for discrepancies that, either
\nindividually or in the aggregate, would not reasonably be expected to have a
\nBeacon Material Adverse Effect, all <\/p>\n
-19-
\n 28
\ninformation set forth in the Beacon Rent Roll is true, correct and complete as
\nof the date thereof. Except as set forth in a delinquency report made available
\nto EOP, neither Beacon or any Beacon Subsidiary, on the one hand, nor, to the
\nknowledge of Beacon or Beacon Partnership, any other party, on the other hand,
\nis in monetary default under any Beacon Space Lease, except for such defaults
\nthat would not reasonably be expected to have a Beacon Material Adverse Effect.<\/p>\n
2.10 Environmental Matters. Except as disclosed in the Beacon
\nSEC Documents, (a) none of Beacon, any of the Beacon Subsidiaries or, to
\nBeacon’s Knowledge, any other Person has caused or permitted the unlawful
\npresence of any hazardous substances, hazardous materials, toxic substances or
\nwaste materials (collectively, “Hazardous Materials”) on or under any of the
\nBeacon Properties and none of Beacon nor any of the Beacon Subsidiaries has any
\nknowledge of the presence of any Hazardous Materials on or under any of the
\nBeacon Properties or (b) none of Beacon, any of the Beacon Subsidiaries, or to
\nBeacon’s Knowledge, any other Person, has caused or permitted any unlawful
\nspills, releases, discharges or disposal of Hazardous Materials to have occurred
\nor be presently occurring on or from the Beacon Properties as a result of any
\nconstruction on or operation and use of such properties and none of Beacon nor
\nany of the Beacon Subsidiaries has any knowledge of any spills, releases,
\ndischarges or disposal of Hazardous Materials to have occurred or be presently
\noccurring on, under or from the Beacon Properties as a result of any
\nconstruction on or operation and use of such properties, in each of the
\nforegoing cases, which presence or occurrence would, individually or in the
\naggregate, have a Beacon Material Adverse Effect; and in connection with the
\nconstruction on or operation and use of the Beacon Properties, Beacon and the
\nBeacon Subsidiaries have not failed to comply in any material respect with all
\napplicable local, state and federal environmental laws, regulations, ordinances
\nand administrative and judicial orders relating to the generation, recycling,
\nreuse, sale, storage, handling, transport and disposal of any Hazardous
\nMaterials, except to the extent such failure to comply, individually or in the
\naggregate, would not have a Beacon Material Adverse Effect. Beacon has
\npreviously delivered or made available to EOP complete copies of all final
\nversions of environmental investigations and testing or analysis made by or on
\nbehalf of Beacon or any of the Beacon Subsidiaries that are in the possession of
\nany of them with respect to the environmental condition of the Beacon
\nProperties.<\/p>\n
2.11 Related Party Transactions. Set forth in Schedule 2.11 to
\nthe Beacon Disclosure Letter is a list of all material arrangements, agreements
\nand contracts entered into by Beacon or any of the Beacon Subsidiaries with (a)
\nany investment banker or financial advisor, (b) any person who is an officer,
\ndirector or Affiliate (as defined below) of Beacon or any of its Subsidiaries,
\nany relative of any of the foregoing or any entity of which any of the foregoing
\nis an Affiliate or (c) any person who acquired Beacon Common Shares or Beacon OP
\nUnits in a private placement. Such documents, copies of all of which have
\npreviously been delivered<\/p>\n
-20-<\/p>\n
29
\nor made available to EOP, are listed in Schedule 2.11 to the Beacon Disclosure
\nLetter. As used in this Agreement, the term “Affiliate” shall have the same
\nmeaning as such term is defined in Rule 405 promulgated under the Securities
\nAct.<\/p>\n
2.12 Employee Benefits. As used herein, the term “Employee Plan”
\nincludes any pension, retirement, savings, disability, medical, dental, health,
\nlife, death benefit, group insurance, profit sharing, deferred compensation,
\nstock option, bonus, incentive, vacation pay, tuition reimbursement, severance
\npay, or other employee benefit plan, trust, agreement, contract, agreement,
\npolicy or commitment (including, without limitation, any pension plan, as
\ndefined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
\nas amended, and the rules and regulations promulgated thereunder (“ERISA”)
\n(“Pension Plan”), and any welfare plan as defined in Section 3(1) of ERISA
\n(“Welfare Plan”)), whether any of the foregoing is funded, insured or
\nself-funded, written or oral, (i) sponsored or maintained by Beacon or its
\nSubsidiaries (each a “Controlled Group Member”) and covering any Controlled
\nGroup Member’s active or former employees (or their beneficiaries), (ii) to
\nwhich any Controlled Group Member is a party or by which any Controlled Group
\nMember (or any of the rights, properties or assets thereof) is bound or (iii)
\nwith respect to which any current Controlled Group Member may otherwise have any
\nmaterial liability (whether or not such Controlled Group Member still maintains
\nsuch Employee Plan). Each Employee Plan is listed on Schedule 2.12 to the Beacon
\nDisclosure Letter. With respect to the Employee Plans:<\/p>\n
(a) Except as proposed in Schedule 2.12(a) to the Beacon
\nDisclosure Letter, no Controlled Group Member has any continuing liability
\nunder any Welfare Plan which provides for continuing benefits or coverage for
\nany participant or any beneficiary of a participant after such participant’s
\ntermination of employment, except as may be required by Section 4980B of the
\nCode or Section 601 (et seq.) of ERISA, or under any applicable state law, and
\nat the expense of the participant or the beneficiary of the participant.<\/p>\n
(b) Each Employee Plan complies in all material respects with
\nthe applicable requirements of ERISA and any other applicable law governing such
\nEmployee Plan, and, to the best Knowledge of Beacon, each Employee Plan has at
\nall times been properly administered in all material respects in accordance with
\nall such requirements of law, and in accordance with its terms and the terms of
\nany applicable collective bargaining agreement to the extent consistent with all
\nsuch requirements of law. Each Pension Plan which is intended to be qualified is
\nqualified under Section 401(a) of the Code, has received a favorable
\ndetermination letter from the IRS stating that such Plan meets the requirements
\nof Section 401(a) of the Code and that the trust associated with such Plan is
\ntax-exempt under Section 501(a) of the Code and, to the best Knowledge of
\nBeacon, no event has occurred which would jeopardize the qualified status of any
\nsuch plan or the tax exempt status of any such trust under Sections 401(a) and
\nSection 501(a) of the<\/p>\n
-21-<\/p>\n
30<\/p>\n
Code, respectively. No lawsuits, claims (other than routine claims for
\nbenefits) or complaints to, or by, any person or governmental entity have been
\nfiled, are pending, to the best Knowledge of Beacon, threatened with respect to
\nany Employee Plan and, to the best Knowledge of Beacon, there is no fact or
\ncontemplated event which would be expected to give rise to any such lawsuit,
\nclaim (other than routine claims for benefits) or complaint with respect to any
\nPension Plan. Without limiting the foregoing, the following are true with
\nrespect to each Employee Plan:<\/p>\n
(i) all Controlled Group Members have complied in all
\n material respects with the reporting and disclosure requirements of
\n ERISA, the Code, or both, with respect to each Employee Plan and no
\n Controlled Group Member has incurred any material liability in
\n connection with such reporting or disclosure;<\/p>\n
(ii) all contributions and payments with respect to Employee
\n Plans that are required to be made by a Controlled Group Member with
\n respect to periods ending on or before the Closing Date (including
\n periods from the first day of the current plan or policy year to the
\n Closing Date) have been, or will be, made or accrued before the
\n Closing Date in accordance with the appropriate plan document,
\n actuarial report, collective bargaining agreements or insurance
\n contracts or arrangements or as otherwise required by ERISA or the
\n Code; and<\/p>\n
(iii) with respect to each such Employee Plan, to the extent
\n applicable, Beacon has delivered to or has made available to EOP true
\n and complete copies of (A) plan documents, or any and all other
\n documents that establish the existence of the plan, trust,
\n arrangement, contract, policy or commitment and all amendments
\n thereto, (B) the most recent determination letter, if any, received
\n from the IRS, (C) the three most recent Form 5500 Annual Reports (and
\n all schedules and reports relating thereto) and actuarial reports and
\n (D) all related trust agreements, insurance contract or other funding
\n agreements that implement each such Employee Plan.<\/p>\n
(c) With respect to each Employee Plan, to the best Knowledge
\nof Beacon, there has not occurred, and no person or entity is contractually
\nbound to enter into, any “prohibited transaction” within the meaning of Section
\n4975(c) of the Code or Section 406 of ERISA, which transaction is not exempt
\nunder Section 4975(d) of the Code or Section 408 of ERISA and which could
\nsubject Beacon or any Controlled Group Member to material liability.<\/p>\n
(d) Except as disclosed in Schedule 2.12(d) to the Beacon
\nDisclosure Letter, no Controlled Group Member has maintained or been obligated
\nto contribute to any Employee Plan subject to Code Section 412 or Title IV of<\/p>\n
-22-
\n 31
\nERISA. No Employee Plan subject to Code Section 412 or Title IV of ERISA has
\nbeen terminated.<\/p>\n
(e) With respect to each pension plan maintained by any
\nControlled Group Member, such Plans provide the Plan Sponsor the authority to
\namend or terminate the Plan at any time, subject to applicable requirements of
\nERISA and the Code.<\/p>\n
2.13 Employee Policies. No employee handbook of Beacon or any of the
\nBeacon Subsidiaries is currently in effect. Schedule 2.13 to the Beacon
\nDisclosure Letter fairly and accurately summarizes all material employee
\npolicies, vacation policies and payroll policies.<\/p>\n
2.14 Taxes.<\/p>\n
(a) Each of Beacon and the Beacon Subsidiaries (A) has filed all
\nTax returns and reports required to be filed by it (after giving effect to any
\nfiling extension properly granted by a Governmental Entity having authority to
\ndo so) and all such returns and reports are accurate and complete in all
\nmaterial respects, and (B) has paid (or Beacon has paid on its behalf) all Taxes
\n(as defined below) shown on such returns and reports as required to be paid by
\nit, except those where the failure to file such tax returns and reports or pay
\nsuch Taxes would not have a Beacon Material Adverse Effect. The most recent
\naudited financial statements contained in the Beacon SEC Documents reflect an
\nadequate reserve for all material Taxes payable by Beacon and the Beacon
\nSubsidiaries for all taxable periods and portions thereof through the date of
\nsuch financial statements. Since the Beacon Financial Statement Date, Beacon has
\nincurred no liability for taxes under Sections 857(b), 860(c) or 4981 of the
\nCode, including without limitation any tax arising from a prohibited transaction
\ndescribed in Section 857(b)(6) of the Code, and neither Beacon nor any Beacon
\nSubsidiary has incurred any material liability for taxes other than in the
\nordinary course of business. No event has occurred, and no condition or
\ncircumstance exists, which presents a material risk that any material Tax
\ndescribed in the preceding sentence will be imposed upon Beacon. To the
\nKnowledge of Beacon, no deficiencies for any Taxes have been proposed, asserted
\nor assessed against Beacon or any of the Beacon Subsidiaries, and no requests
\nfor waivers of the time to assess any such Taxes are pending. As used in this
\nAgreement, “Taxes” shall include all federal, state, local and foreign income,
\nproperty, sales, franchise, employment, excise and other taxes, tariffs or
\ngovernmental charges of any nature whatsoever, together with penalties, interest
\nor additions to Tax with respect thereto.<\/p>\n
(b) Beacon and BeaMetFed, Inc. (“BeaMet”) (i) for all taxable
\nyears commencing with 1994 (or, in the case of BeaMet, 1995) through December
\n31, 1996 has been subject to taxation as a real estate investment trust (a
\n“REIT”) within the meaning of Section 856 of the Code and has satisfied all
\nrequirements to<\/p>\n
-23-<\/p>\n
32<\/p>\n
qualify as a REIT for such years, (ii) has operated since December 31, 1996 to
\nthe date of this representation, and intends to continue to operate, in such a
\nmanner as to qualify as a REIT for the taxable year ending December 31, 1997 and
\nfor the taxable year of Beacon ending on the Closing Date (or, in the case of
\nBeaMet, on December 31, 1998), and (iii) has not taken or omitted to take any
\naction which would reasonably be expected to result in a challenge to its status
\nas a REIT and, to Beacon’s Knowledge, no such challenge is pending or
\nthreatened. Each Beacon Subsidiary which is a partnership, joint venture or
\nlimited liability company (i) has been since its formation and continues to be
\ntreated for federal income tax purposes as a partnership and not as a
\ncorporation or an association taxable as a corporation and (ii) has not since
\nthe later of its formation or the acquisition by Beacon of a direct or indirect
\ninterest therein, owned any assets (including, without limitation, securities)
\nthat would cause Beacon to violate Section 856(c)(5) of the Code. No Beacon
\nSubsidiary (other than BeaMet, the Management Company, the Design Company and
\nthe Construction Company) is a corporation (or an entity that would, under
\napplicable federal income tax principles, be classified as an association
\ntaxable as a corporation). Beacon Partnership is not a publicly traded
\npartnership within the meaning of Section 7704 of the Code. Neither Beacon nor
\nany Beacon Subsidiary holds any asset (x) the disposition of which would be
\nsubject to rules similar to Section 1374 of the Code as a result of a notice
\nunder IRS Notice 88-19 or (y) which is subject to a consent filed pursuant to
\nSection 341(f) of the Code and the regulations thereunder.<\/p>\n
2.15 No Payments to Employees, Officers or Directors. Schedule 2.15
\nto the Beacon Disclosure Letter contains a true and complete list of all
\narrangements, agreements or plans pursuant to which cash and non-cash payments
\nwhich will become payable (and the maximum aggregate amount which may be payable
\nthereunder) to each employee, officer or director of Beacon or any Beacon
\nSubsidiary as a result of the Merger or a termination of service subsequent to
\nthe consummation of the Merger. Except as described in Schedule 2.15 to the
\nBeacon Disclosure Letter, or as otherwise provided for in this Agreement, there
\nis no employment or severance contract, or other agreement requiring payments,
\ncancellation of indebtedness or other obligation to be made on a change of
\ncontrol or otherwise as a result of the consummation of any of the transactions
\ncontemplated by this Agreement or as a result of a termination of service
\nsubsequent to the consummation of any of the transactions contemplated by this
\nAgreement, with respect to any employee, officer or director of Beacon or any
\nBeacon Subsidiary.<\/p>\n
2.16 Broker; Schedule of Fees and Expenses. No broker, investment
\nbanker, financial advisor or other person, other than Morgan Stanley & Co.,
\nIncorporated, the fees and expenses of which are described in the engagement
\nletter dated September 12, 1997, between Morgan Stanley & Co., Incorporated and
\nBeacon, a true, correct and complete copy of which has previously been given to
\nEOP, is entitled to any broker’s, finder’s, financial advisor’s or other similar
\nfee or <\/p>\n
-24-
\n 33<\/p>\n
commission in connection with the transactions contemplated hereby based
\nupon arrangements made by or on behalf of Beacon or any Beacon Subsidiary.<\/p>\n
2.17 Compliance with Laws. Neither Beacon nor any of the Beacon
\nSubsidiaries has violated or failed to comply with any statute, law, ordinance,
\nregulation, rule, judgment, decree or order of any Governmental Entity
\napplicable to its business, properties or operations, except to the extent that
\nsuch violation or failure would not have a Beacon Material Adverse Effect.<\/p>\n
2.18 Contracts; Debt Instruments.<\/p>\n
(a) Neither Beacon nor any Beacon Subsidiary has received a
\nwritten notice that Beacon or any Beacon Subsidiary is in violation of or in
\ndefault under (nor to the Knowledge of Beacon does there exist any condition
\nwhich upon the passage of time or the giving of notice or both would cause such
\na violation of or default under) any material loan or credit agreement, note,
\nbond, mortgage, indenture, lease, permit, concession, franchise, license or any
\nother material contract, agreement, arrangement or understanding, to which it is
\na party or by which it or any of its properties or assets is bound, nor to the
\nKnowledge of Beacon does such a violation or default exist, except to the extent
\nthat such violation or default, individually or in the aggregate, would not have
\na Beacon Material Adverse Effect.<\/p>\n
(b) Except for any of the following expressly identified in
\nBeacon SEC Documents, Schedule 2.18(b) to the Beacon Disclosure Letter sets
\nforth a list of each material loan or credit agreement, note, bond, mortgage,
\nindenture and any other agreement or instrument pursuant to which any
\nIndebtedness (as defined below) of Beacon or any of the Beacon Subsidiaries,
\nother than Indebtedness payable to Beacon or a Beacon Subsidiary is outstanding
\nor may be incurred. For purposes of this Section 2.18, “Indebtedness” shall mean
\n(i) indebtedness for borrowed money, whether secured or unsecured, (ii)
\nobligations under conditional sale or other title retention agreements relating
\nto property purchased by such person, (iii) capitalized lease obligations, (iv)
\nobligations under interest rate cap, swap, collar or similar transaction or
\ncurrency hedging transactions (valued at the termination value thereof) and (v)
\nguarantees of any such indebtedness of any other person.<\/p>\n
(c) To the extent not set forth in response to the requirements
\nof Section 2.18(b), Schedule 2.18(c) to the Beacon Disclosure Letter sets forth
\neach interest rate cap, interest rate collar, interest rate swap, currency
\nhedging transaction, and any other agreement relating to a similar transaction
\nto which Beacon or any Beacon Subsidiary is a party or an obligor with respect
\nthereto.<\/p>\n
-25-
\n 34<\/p>\n
(d) Except as set forth in Schedule 2.18(d) of the Beacon
\nDisclosure Letter, neither Beacon nor any of the Beacon Subsidiaries is a party
\nto any agreement which would restrict any of them from prepaying any of their
\nIndebtedness without penalty or premium at any time or which requires any of
\nthem to maintain any amount of Indebtedness with respect to any of the Beacon
\nProperties.<\/p>\n
(e) Neither Beacon nor any Beacon Subsidiary is a party to any
\nagreement relating to the management of any Beacon Property by any Person other
\nthan the Management Company, Beacon Management L.P. and Beacon Properties South
\nStation Management Company, L.P.<\/p>\n
(f) Neither Beacon nor any of the Beacon Subsidiaries is a party
\nto any agreement pursuant to which Beacon or any Beacon Subsidiary manages or
\nprovides services with respect to any real properties other than Beacon
\nProperties, except for the agreements described in Schedule 2.18(f) to the
\nBeacon Disclosure Letter (the “Outside Property Management Agreements”).<\/p>\n
(g) Beacon has delivered to EOP prior to the date of this
\nAgreement a true and complete capital budget relating to budgeted construction.
\nSchedule 2.18(g) to the Beacon Disclosure Letter lists all material agreements
\nentered into by Beacon or any of the Beacon Subsidiaries relating to the
\ndevelopment or construction of, or additions or expansions to, any Beacon Real
\nProperties (or any properties with respect to which Beacon has executed as of
\nthe date of this Agreement a purchase agreement or other similar agreement)
\nwhich are currently in effect and under which Beacon or any of the Beacon
\nSubsidiaries currently has, or expects to incur, an obligation in excess of
\n$250,000. True, correct and complete copies of such agreements have previously
\nbeen delivered or made available to EOP.<\/p>\n
(h) Schedule 2.18(h) to the Beacon Disclosure Letter lists all
\nagreements entered into by Beacon or any Beacon Subsidiary providing for the
\nsale of, or option to sell, any Beacon Properties or the purchase of, or option
\nto purchase, by Beacon or any Beacon Subsidiary, on the one hand, or the other
\nparty thereto, on the other hand, any real estate which are currently in effect.<\/p>\n
(i) Except as set forth in Schedule 2.18(i) to the Beacon
\nDisclosure Letter, neither Beacon nor any Beacon Subsidiary has any material
\ncontinuing contractual liability (A) for indemnification or otherwise under any
\nagreement relating to the sale of real estate previously owned, whether directly
\nor indirectly, by Beacon or any Beacon Subsidiary or (B) to pay any additional
\npurchase price for any of the Beacon Properties.<\/p>\n
(j) Except as set forth in Schedule 2.18(j) to the Beacon
\nDisclosure Letter, neither Beacon nor any Beacon Subsidiary has entered into or
\nis<\/p>\n
-26-<\/p>\n
35<\/p>\n
subject, directly or indirectly, to any “Tax Protection Agreements.” As used
\nherein, a Tax Protection Agreement is an agreement, oral or written, (A) that
\nhas as one of its purposes to permit a person or entity to take the position
\nthat such person or entity could defer federal taxable income that otherwise
\nmight have been recognized upon a transfer of property to the Beacon Partnership
\nor any other Beacon Subsidiary that is treated as a partnership for federal
\nincome tax purposes, and (B) that (i) prohibits or restricts in any manner the
\ndisposition of any assets of Beacon or any Beacon Subsidiary, (ii) requires that
\nBeacon or any Beacon Subsidiary maintain, or put in place, or replace,
\nindebtedness, whether or not secured by one or more of the Beacon Properties, or
\n(iii) requires that Beacon or any Beacon Subsidiary offer to any person or
\nentity at any time the opportunity to guarantee or otherwise assume, directly or
\nindirectly, the risk of loss for federal income tax purposes for indebtedness or
\nother liabilities of Beacon or any Beacon Subsidiary.<\/p>\n
2.19 Opinion of Financial Advisor. Beacon has received the oral
\nopinion of Morgan Stanley & Co., Incorporated or an affiliate thereof,
\nsatisfactory to Beacon, to the effect that the proposed consideration to be
\nreceived by the holders of Beacon Common Shares pursuant to the Merger is fair
\nto such holders from a financial point of view.<\/p>\n
2.20 State Takeover Statutes. Beacon has taken all action necessary
\nto exempt the transactions contemplated by this Agreement between EOP and Beacon
\nand its Affiliates from the operation of any “fair price,” “moratorium,”
\n“control share acquisition” or any other anti-takeover statute or similar
\nstatute enacted under the state or federal laws of the United States or similar
\nstatute or regulation (a “Takeover Statute”).<\/p>\n
2.21 Investment Company Act of 1940. Neither Beacon nor any of the
\nBeacon Subsidiaries is, or at the Effective Time will be, required to be
\nregistered under the Investment Company Act of 1940, as amended (the “1940
\nAct”).<\/p>\n
2.22 Definition of Knowledge of Beacon. As used in this Agreement,
\nthe phrase “Knowledge of Beacon” (or words of similar import) means the
\nknowledge of those individuals identified in Schedule 2.22 to the Beacon
\nDisclosure Letter.<\/p>\n
ARTICLE 3<\/p>\n
REPRESENTATIONS AND WARRANTIES OF EOP<\/p>\n
Except as set forth in the letter of even date herewith signed by the
\nPresident or an Executive Vice President of EOP and delivered to Beacon prior to<\/p>\n
-27-
\n 36<\/p>\n
the execution hereof (the “EOP Disclosure Letter”), EOP and EOP Partnership
\nrepresent and warrant to Beacon and Beacon Partnership as follows:<\/p>\n
3.1 Organization, Standing and Power of EOP. EOP is a real estate
\ninvestment trust duly organized, validly existing and in good standing under the
\nlaws of Maryland and has all requisite power and authority to own, operate,
\nlease and encumber its properties and carry on its business as now being
\nconducted. EOP is duly qualified or licensed to do business as a foreign trust
\nand is in good standing in each jurisdiction in which the nature of its business
\nor the ownership or leasing of its properties makes such qualification or
\nlicensing necessary, other than in such jurisdictions where the failure to be so
\nqualified or licensed, individually or in the aggregate, would not have a
\nmaterial adverse effect on the business, properties, assets, financial condition
\nor results of operations of EOP and the Subsidiaries of EOP (collectively, “EOP
\nSubsidiaries”), taken as a whole (an “EOP Material Adverse Effect”). EOP has
\ndelivered to Beacon complete and correct copies of the EOP Declaration of Trust
\nand the EOP Bylaws, as amended or supplemented to the date of this Agreement.<\/p>\n
3.2 EOP Subsidiaries.<\/p>\n
(a) Schedule 3.2(a) to the EOP Disclosure Letter sets forth (i)
\neach EOP Subsidiary, (ii) the ownership interest therein of EOP, (iii) if not
\nwholly owned by EOP, the identity and ownership interest of each of the other
\nowners of such EOP Subsidiary, (iv) each office property and other commercial
\nproperty owned by such Subsidiary, and (v) if not wholly owned by such
\nSubsidiary, the identity and ownership interest of each of the other owners of
\nsuch property.<\/p>\n
(b) Except as set forth in Schedule 3.2(b) to the EOP Disclosure
\nLetter, (i) all the outstanding shares of capital stock of each EOP Subsidiary
\nthat is a corporation have been duly authorized, validly issued and are (A)
\nfully paid and nonassessable and not subject to preemptive rights, (B) owned by
\nEOP or by another EOP Subsidiary and (C) owned free and clear of all Liens and
\n(ii) all equity interests in each EOP Subsidiary that is a partnership, joint
\nventure, limited liability company or trust which are owned by EOP, by another
\nEOP Subsidiary or by EOP and another EOP Subsidiary are owned free and clear of
\nall Liens. Each EOP Subsidiary that is a corporation is duly incorporated,
\nvalidly existing and in good standing under the laws of its jurisdiction of
\nincorporation and has the requisite corporate power and authority to own,
\noperate, lease and encumber its properties and carry on its business as now
\nbeing conducted, and each EOP Subsidiary that is a partnership, limited
\nliability company or trust is duly organized, validly existing and in good
\nstanding under the laws of its jurisdiction of organization and has the
\nrequisite power and authority to own, operate, lease and encumber its properties
\nand carry on its business as now being conducted. Each EOP Subsidiary is duly
\nqualified or licensed to do business and is in good standing in each
\njurisdiction in which the nature of its business or the ownership or leasing <\/p>\n
-28-
\n 37<\/p>\n
of its properties makes such qualification or licensing necessary, other than in
\nsuch jurisdictions where the failure to be so qualified or licensed,
\nindividually or in the aggregate, would not have an EOP Material Adverse Effect.
\nComplete and correct copies of the Articles of Incorporation, Bylaws,
\norganization documents and partnership, joint venture and operating agreements
\nof each EOP Subsidiary, as amended to the date of this Agreement, have been
\npreviously delivered or made available to Beacon. No effective amendment has
\nbeen made to the EOP Partnership Agreement since September 3, 1997.<\/p>\n
3.3 Capital Structure.<\/p>\n
(a) The authorized shares of beneficial interest of EOP consist
\nof 750,000,000 EOP Common Shares, 152,180,770 of which are issued and
\noutstanding as of September 15, 1997 (including 502,740 EOP Common Shares owned
\nby EOP Partnership), and 100,000,000 preferred shares of beneficial interest,
\nnone of which are issued or outstanding as of the date of this agreement.<\/p>\n
(b) Set forth in Schedule 3.3(b) to the EOP Disclosure Letter is
\na true and complete list of the following: (i) each qualified or nonqualified
\noption to purchase EOP’s shares of beneficial interest granted under the
\nEmployee Share Option and Restricted Share Plan or any other formal or informal
\narrangement (collectively, the “EOP Options”); and (ii) all other warrants or
\nother rights to acquire EOP’s shares of beneficial interest, all limited share
\nappreciation rights, phantom shares, dividend equivalents, performance units and
\nperformance shares which are outstanding on the date of this Agreement. Schedule
\n3.3(b) to the EOP Disclosure Letter sets forth the EOP Options granted to EOP’s
\nChief Executive Officer and four other most highly compensated officers, the
\ndate of each grant, the status of each EOP Option as qualified or nonqualified
\nunder Section 422 of the Code, the number of EOP Common Shares subject to each
\nEOP Option, the number and type of EOP’s shares of beneficial interest subject
\nto EOP Options that are currently exercisable, the exercise price per share, and
\nthe number and type of such shares subject to share appreciation rights. On the
\ndate of this Agreement, except as set forth in this Section 3.3 or in Schedule
\n3.3(b) to the EOP Disclosure Letter, no shares of beneficial interest of EOP
\nwere outstanding or reserved for issuance (except for EOP Common Shares reserved
\nfor issuance upon redemption of EOP OP Units).<\/p>\n
(c) All outstanding shares of beneficial interest of EOP are
\nduly authorized, validly issued, fully paid and nonassessable and not subject to
\npreemptive rights. There are no bonds, debentures, notes or other indebtedness
\nof EOP having the right to vote (or convertible into, or exchangeable for,
\nsecurities having the right to vote) on any matters on which shareholders of EOP
\nmay vote.<\/p>\n
(d) Except (i) as set forth in this Section 3.3 or in Schedule
\n3.3(d) to the EOP Disclosure Letter and (ii) EOP OP Units, which may be <\/p>\n
-29-
\n 38<\/p>\n
redeemed for EOP Common Shares, as of the date of this Agreement, there are no
\noutstanding securities, options, warrants, calls, rights, commitments,
\nagreements, arrangements or undertakings of any kind to which EOP or any EOP
\nSubsidiary is a party or by which such entity is bound, obligating EOP or any
\nEOP Subsidiary to issue, deliver or sell, or cause to be issued, delivered or
\nsold, additional shares of beneficial interest, voting securities or other
\nownership interests of EOP or any EOP Subsidiary or obligating EOP or any EOP
\nSubsidiary to issue, grant, extend or enter into any such security, option,
\nwarrant, call, right, commitment, agreement, arrangement or undertaking (other
\nthan to EOP or an EOP Subsidiary).<\/p>\n
(e) As of the date hereof, 165,248,223 EOP OP Units are validly
\nissued and outstanding, fully paid and nonassessable and not subject to
\npreemptive rights, of which 155,196,855 are owned by EOP and EOP Subsidiaries.
\nSchedule 3.3(e) to the EOP Disclosure Schedule sets forth the name of each
\nholder of EOP OP Units and the number of EOP OP Units owned by each such holder
\nas of the date of this Agreement. The EOP OP Units are subject to no
\nrestrictions except as set forth in the EOP Partnership Agreement. EOP
\nPartnership has not issued or granted and is not a party to any outstanding
\ncommitments of any kind relating to, or any presently effective agreements or
\nunderstandings with respect to, interests in EOP Partnership, whether issued or
\nunissued, or securities convertible or exchangeable into interests in EOP
\nPartnership.<\/p>\n
(f) All dividends on EOP Common Shares and all distributions on
\nEOP OP Units which have been declared prior to the date of this Agreement have
\nbeen paid in full, except that the dividends payable on EOP Common Shares (along
\nwith the corresponding distributions payable on EOP OP Units) which were
\ndeclared on September 11, 1997 and are payable on October 9, 1997 have not yet
\nbeen paid.<\/p>\n
(g) The EOP Common Shares and the EOP Preferred Shares to be
\nissued by EOP, and the EOP OP Units to be issued by the EOP Partnership pursuant
\nto this Agreement have been duly authorized for issuance, and upon issuance will
\nbe duly and validly issued, fully paid and nonassessable.<\/p>\n
3.4 Other Interests. Except for interests in the EOP Subsidiaries
\nand certain other entities as set forth in Schedule 3.4(a) or Schedule 3.5 to
\nthe EOP Disclosure Letter, neither EOP nor any of its Subsidiaries owns directly
\nor indirectly any interest or investment (whether equity or debt) in any
\ncorporation, partnership, joint venture, business, trust or other entity (other
\nthan investments in short-term investment securities). With respect to such
\nother interests, EOP or EOP Partnership is a partner or stockholder in good
\nstanding, and owns such interests free and clear of all Liens. Neither EOP nor
\nany of the EOP Subsidiaries is in breach of any provision of any agreement,
\ndocument or contract governing its rights in or to the interests owned or held
\nby it, all of which agreements, documents and contracts are (a) set forth in
\nSchedule 3.4(b) to the EOP Disclosure Letter (or <\/p>\n
-30-
\n 39<\/p>\n
disclosed in the EOP SEC Documents (as defined below)), (b) unmodified except as
\ndescribed therein and (c) in full force and effect. To the Knowledge of EOP (as
\ndefined in Section 3.19), the other parties to any such agreement, document or
\ncontract which is of a material nature are not in breach of any of their
\nrespective obligations under such agreements, documents or contracts.<\/p>\n
3.5 Authority; Noncontravention; Consents.<\/p>\n
(a) EOP has the requisite power and authority to enter into this
\nAgreement and, subject to the requisite shareholder approval of the Merger (the
\n“EOP Shareholder Approvals” and, together with the Beacon Shareholder Approvals,
\nthe “Shareholder Approvals”), to consummate the transactions contemplated by
\nthis Agreement to which EOP is a party. The execution and delivery of this
\nAgreement by EOP and the consummation by EOP of the transactions contemplated by
\nthis Agreement to which EOP is a party have been duly authorized by all
\nnecessary action on the part of EOP, except for and subject to the EOP
\nShareholder Approvals and the requisite approval, if any is required, of the
\npartners of EOP Partnership. This Agreement has been duly executed and delivered
\nby EOP and constitutes a valid and binding obligation of EOP, enforceable
\nagainst EOP in accordance with and subject to its terms, subject to applicable
\nbankruptcy, insolvency, moratorium or other similar laws relating to creditors’
\nrights and general principles of equity.<\/p>\n
(b) EOP Partnership has the requisite partnership power and,
\nsubject to the requisite partner approval of the Partnership Merger (if any),
\nauthority to enter into this Agreement and to consummate the transactions
\ncontemplated by this Agreement to which EOP Partnership is a party. The
\nexecution and delivery of this Agreement by EOP Partnership and the consummation
\nby EOP Partnership of the transactions contemplated by this Agreement to which
\nEOP Partnership is a party have been duly authorized by all necessary action on
\nthe part of EOP Partnership, except for and subject to the EOP Shareholder
\nApprovals. This Agreement has been duly executed and delivered by EOP
\nPartnership and constitutes a valid and binding obligation of EOP Partnership,
\nenforceable against EOP Partnership in accordance with and subject to its terms,
\nsubject to applicable bankruptcy, insolvency, moratorium or other similar laws
\nrelating to creditors’ rights and general principles of equity.<\/p>\n
(c) Except as set forth in Schedule 3.5(c)(1) to the EOP
\nDisclosure Letter, the execution and delivery of this Agreement by EOP and EOP
\nPartnership do not, and the consummation of the transactions contemplated by
\nthis Agreement to which EOP or EOP Partnership is a party and compliance by EOP
\nor EOP Partnership with the provisions of this Agreement will not, conflict
\nwith, or result in any violation of or default (with or without notice or lapse
\nof time, or both) under, or give rise to a right of termination, cancellation or
\nacceleration of any material obligation or to loss of a material benefit under,
\nor result in the creation of <\/p>\n
-31-
\n 40<\/p>\n
any Lien upon any of the properties or assets of EOP or any EOP Subsidiary
\nunder, (i) the EOP Declaration of Trust or the EOP Bylaws or the comparable
\ncharter or organizational documents or partnership, operating or similar
\nagreement (as the case may be) of any other EOP Subsidiary, each as amended or
\nsupplemented to the date of this Agreement, (ii) any loan or credit agreement,
\nnote, bond, mortgage, indenture, reciprocal easement agreement, lease or other
\nagreement, instrument, permit, concession, franchise or license applicable to
\nEOP or any EOP Subsidiary or their respective properties or assets or (iii)
\nsubject to the governmental filings and other matters referred to in the
\nfollowing sentence, any Laws applicable to EOP or any EOP Subsidiary or their
\nrespective properties or assets, other than, in the case of clause (ii) or
\n(iii), any such conflicts, violations, defaults, rights, loss or Liens that
\nindividually or in the aggregate would not (x) have an EOP Material Adverse
\nEffect or (y) prevent the consummation of the transactions contemplated by this
\nAgreement. No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with, any Governmental Entity is required by or with
\nrespect to EOP or any EOP Subsidiary in connection with the execution and
\ndelivery of this Agreement or the consummation by EOP of any of the transactions
\ncontemplated by this Agreement, except for (i) the filing with the SEC of (x)
\nthe Registration Statement (as defined in Section 5.1) and (y) such reports
\nunder Section 13 (a) of the Exchange Act as may be required in connection with
\nthis Agreement and the transactions contemplated by this Agreement, (ii) the
\nacceptance for record of the Articles of Merger by the Department, (iii) the
\nfiling of the Certificate of Merger with the Secretary, (iv) such filings as may
\nbe required in connection with the payment of any transfer and gains taxes and
\n(v) such other consents, approvals, orders, authorizations, registrations,
\ndeclarations and filings (A) as are set forth in Schedule 3.5(c)(2) to the EOP
\nDisclosure Letter or (B) as may be required under (x) federal, state or local
\nenvironmental laws or (y) the “blue sky” laws of various states, to the extent
\napplicable, or (C) which, if not obtained or made, would not prevent or delay in
\nany material respect the consummation of any of the transactions contemplated by
\nthis Agreement or otherwise prevent EOP from performing its obligations under
\nthis Agreement in any material respect or have, individually or in the
\naggregate, an EOP Material Adverse Effect.<\/p>\n
3.6 SEC Documents; Financial Statements; Undisclosed Liabilities.
\nEOP and EOP Operating Partnership have filed all required reports, schedules,
\nforms, statements and other documents with the SEC since July 8, 1997 through
\nthe date hereof (the “EOP SEC Documents”). Schedule 3.6(a) to the EOP Disclosure
\nLetter contains a complete list of all EOP SEC Documents filed by EOP under the
\nExchange Act since July 8, 1997 and on or prior to the date of this Agreement.
\nAll of the EOP SEC Documents (other than preliminary material), as of their
\nrespective filing dates, complied in all material respects with all applicable
\nrequirements of the Securities Act and the Exchange Act and, in each case, the
\nrules and regulations promulgated thereunder applicable to such EOP SEC
\nDocuments. None of the EOP SEC Documents at the time of filing contained any
\nuntrue statement of <\/p>\n
-32-
\n 41<\/p>\n
a material fact or omitted to state any material fact required to be stated
\ntherein or necessary in order to make the statements therein, in light of the
\ncircumstances under which they were made, not misleading, except to the extent
\nsuch statements have been modified or superseded by later EOP SEC Documents
\nfiled and publicly available prior to the date of this Agreement. The
\nconsolidated financial statements of EOP and the EOP Subsidiaries included in
\nthe EOP SEC Documents complied as to form in all material respects with
\napplicable accounting requirements and the published rules and regulations of
\nthe SEC with respect thereto, have been prepared in accordance with GAAP
\n(except, in the case of unaudited statements, as permitted by the applicable
\nrules and regulations of the SEC) applied on a consistent basis during the
\nperiods involved (except as may be indicated in the notes thereto) and fairly
\npresented, in accordance with the applicable requirements of GAAP and the
\napplicable rules and regulations of the SEC, the consolidated financial position
\nof EOP and the EOP Subsidiaries, taken as a whole, as of the dates thereof and
\nthe consolidated results of operations and cash flows for the periods then ended
\n(subject, in the case of unaudited statements, to normal year-end audit
\nadjustments). Except for liabilities and obligations set forth in the EOP SEC
\nDocuments or in Schedule 3.6(b) to the EOP Disclosure Letter, neither EOP nor
\nany EOP Subsidiary has any liabilities or obligations of any nature (whether
\naccrued, absolute, contingent or otherwise) required by GAAP to be set forth on
\na consolidated balance sheet of EOP or in the notes thereto and which,
\nindividually or in the aggregate, would have an EOP Material Adverse Effect.<\/p>\n
3.7 Absence of Certain Changes or Events. Except as disclosed in the
\nEOP SEC Documents or in Schedule 3.7 to the EOP Disclosure Letter, since the
\ndate of the most recent audited financial statements included in the EOP SEC
\nDocuments (the “EOP Financial Statement Date”), EOP and the EOP Subsidiaries
\nhave conducted their business only in the ordinary course (taking into account
\nprior practices, including the acquisition of properties and issuance of
\nsecurities) and there has not been (a) any material adverse change in the
\nbusiness, financial condition or results of operations of EOP and the EOP
\nSubsidiaries taken as a whole (a “EOP Material Adverse Change”), nor has there
\nbeen any occurrence or circumstance that with the passage of time would
\nreasonably be expected to result in an EOP Material Adverse Change, (b) except
\nfor regular quarterly distributions (in the case of EOP) not in excess of $.30
\nper EOP Common Share, subject to rounding adjustments as necessary and with
\ncustomary record and payment dates, any authorization, declaration, setting
\naside or payment of any dividend or other distribution (whether in cash, stock
\nor property) with respect to any of EOP’s shares of beneficial interest, (c) any
\nsplit, combination or reclassification of any of EOP’s shares of beneficial
\ninterest, (d) any damage, destruction or loss, whether or not covered by
\ninsurance, that has or would have an EOP Material Adverse Effect or (e) any
\nchange made prior to the date of this Agreement in accounting methods,
\nprinciples or practices by EOP or any EOP Subsidiary materially affecting its<\/p>\n
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\n 42<\/p>\n
assets, liabilities or business, except insofar as may have been disclosed in
\nthe EOP SEC Documents or required by a change in GAAP.<\/p>\n
3.8 Litigation. Except as disclosed in the EOP SEC Documents or in
\nSchedule 3.8 to the EOP Disclosure Letter, and other than personal injury and
\nother routine tort litigation arising from the ordinary course of operations of
\nEOP and the EOP Subsidiaries (a) which are covered by adequate insurance or (b)
\nfor which all material costs and liabilities arising therefrom are reimbursable
\npursuant to common area maintenance or similar agreements, there is no suit,
\naction or proceeding pending (in which service of process has been received by
\nan employee of EOP or an EOP Subsidiary) or, to the Knowledge of EOP (as defined
\nin Section 3.19), threatened in writing against or affecting EOP or any EOP
\nSubsidiary that, individually or in the aggregate, could reasonably be expected
\nto (i) have an EOP Material Adverse Effect or (ii) prevent the consummation of
\nany of the transactions contemplated by this Agreement, nor is there any
\njudgment, decree, injunction, rule or order of any Governmental Entity or
\narbitrator outstanding against EOP or any EOP Subsidiary having, or which,
\ninsofar as reasonably can be foreseen, in the future would have, any such
\neffect.<\/p>\n
3.9 Properties.<\/p>\n
(a) Except as set forth in Schedule 3.9(a) to the EOP Disclosure
\nLetter, EOP or one of the EOP Subsidiaries owns fee simple title to each of the
\nreal properties listed in the EOP SEC Filings as owned by it (the “EOP
\nProperties”), except where the failure to own such title would not have an EOP
\nMaterial Adverse Effect.<\/p>\n
(b) The EOP Properties are not subject to any Encumbrances or
\nProperty Restrictions which reasonably could be expected to cause an EOP
\nMaterial Adverse Effect.<\/p>\n
(c) Valid policies of title insurance have been issued insuring
\nEOP’s or the applicable EOP Subsidiary’s fee simple title or leasehold estate,
\nas the case may be, to the EOP Properties in amounts which are, except in the
\ncase of San Felipe Plaza, at least equal to the purchase price thereof paid by
\nEOP or the applicable EOP Subsidiaries therefor, except where the failure to
\nobtain such title insurance would not have an EOP Material Adverse Effect.<\/p>\n
(d) EOP has no Knowledge (i) that it has failed to obtain a
\ncertificate, permit or license from any governmental authority having
\njurisdiction over any of the EOP Properties where such failure would have an EOP
\nMaterial Adverse Effect or of any pending threat of modification or cancellation
\nof any of the same which would have an EOP Material Adverse Effect, (ii) of any
\nwritten notice of any violation of any federal, state or municipal law,
\nordinance, order, rule, regulation or requirement affecting any of the EOP
\nProperties issued by any <\/p>\n
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\n 43<\/p>\n
governmental authorities which would have an EOP Material Adverse Effect or
\n(iii) of any structural defects relating to EOP Properties, EOP Properties whose
\nbuilding systems are not in working order, physical damage to any EOP Property
\nfor which there is no insurance in effect covering the cost of restoration, any
\ncurrent renovation or uninsured restoration, except such structural defects,
\nbuilding systems not in working order, physical damage, renovation and
\nrestoration which, in the aggregate, would not have an EOP Material Adverse
\nEffect.<\/p>\n
(e) Except as set forth in Schedule 3.9(e) to the EOP Disclosure
\nLetter, neither EOP nor any of the EOP Subsidiaries has received any written or
\npublished notice to the effect that (i) any condemnation or rezoning proceedings
\nare pending or threatened with respect to any of the EOP Properties or (ii) any
\nzoning, building or similar law, code, ordinance, order or regulation is or will
\nbe violated by the continued maintenance, operation or use of any buildings or
\nother improvements on any of the EOP Properties or by the continued maintenance,
\noperation or use of the parking areas, other than such notices which, in the
\naggregate, would not have an EOP Material Adverse Effect.<\/p>\n
(f) All work to be performed, payments to be made and actions to
\nbe taken by EOP or the EOP Subsidiaries prior to the date hereof pursuant to any
\nagreement entered into with a governmental body or authority in connection with
\na site approval, zoning reclassification or similar action relating to any EOP
\nProperties (e.g., Local Improvement District, Road Improvement District,
\nEnvironmental Mitigation), has been performed, paid or taken, as the case may
\nbe, except where the failure to do so would, in the aggregate, not have an EOP
\nMaterial Adverse Effect, and EOP has no Knowledge of any planned or proposed
\nwork, payments or actions that may be required after the date hereof pursuant to
\nsuch agreements.<\/p>\n
(g) The rent roll previously provided by EOP to Beacon (the “EOP
\nRent Roll”) lists each EOP Space Lease (as defined below) in effect as of the
\nrespective dates in August 1997 indicated in the EOP Rent Roll. “EOP Space
\nLease” means each lease or other right of occupancy affecting or relating to a
\nproperty in which EOP Partnership (or an entity in which it directly or
\nindirectly has an interest) is the landlord, either pursuant to the terms of
\nthe lease agreement or as successor to any prior landlord, but excluding any
\nground lease. EOP has made available to Beacon true, correct and complete
\ncopies of all EOP Space Leases, including all amendments, modifications,
\nsupplements, renewals, extensions and guarantees related thereto, as of the
\ndate hereof. Except for discrepancies that, either individually or in the
\naggregate, would not reasonably be expected to have an EOP Material Adverse
\nEffect, all information set forth in the EOP Rent Roll is true, correct, and
\ncomplete as of the date thereof. Except as set forth in a delinquency report
\nmade available to EOP, neither EOP nor any EOP Subsidiary, on the one hand,
\nnor, to the Knowledge of EOP or EOP Partnership, any other party, on the other
\nhand, is in monetary<\/p>\n
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\n 44<\/p>\n
default under any EOP Space Lease, except for such defaults that would not
\nreasonably be expected to have a Material Adverse Effect.<\/p>\n
3.10 Environmental Matters. Except as disclosed in the EOP SEC
\nDocuments or on Schedule 3.10 to the EOP Disclosure Letter, (a) none of EOP, any
\nof the EOP Subsidiaries or, to EOP’s Knowledge, any other Person has caused or
\npermitted the unlawful presence of any Hazardous Materials on or under any of
\nthe EOP Properties or (b) any unlawful spills, releases, discharges or disposal
\nof Hazardous Materials to have occurred or be presently occurring on, under or
\nfrom the EOP Properties as a result of any construction on or operation and use
\nof such properties, which presence or occurrence would, individually or in the
\naggregate, have an EOP Material Adverse Effect; and in connection with the
\nconstruction on or operation and use of the EOP Properties, EOP and the EOP
\nSubsidiaries have not failed to comply in any material respect with all
\napplicable local, state and federal environmental laws, regulations, ordinances
\nand administrative and judicial orders relating to the generation, recycling,
\nreuse, sale, storage, handling, transport and disposal of any Hazardous
\nMaterials, except to the extent such failure to comply, individually or in the
\naggregate, would not have an EOP Material Adverse Effect.<\/p>\n
3.11 Taxes.<\/p>\n
(a) Each of EOP and the EOP Subsidiaries (i) has filed all Tax
\nreturns and reports required to be filed by it (after giving effect to any
\nfiling extension properly granted by a Governmental Entity having authority to
\ndo so), and all such returns and reports are accurate and complete in all
\nmaterial respects, and (ii) has paid (or EOP has paid on its behalf) all Taxes
\nshown on such returns and reports as required to be paid by it except where the
\nfailure to file such tax returns or reports and failure to pay such Taxes would
\nnot have an EOP Material Adverse Effect. The most recent audited financial
\nstatements contained in the EOP SEC Documents reflect an adequate reserve for
\nall material Taxes payable by EOP and the EOP Subsidiaries for all taxable
\nperiods and portions thereof through the date of such financial statements.
\nSince the EOP Financial Statement Date, EOP has incurred no liability for taxes
\nunder Sections 857(b), 860(c) or 4981 of the Code, including without limitation
\nany tax arising from a prohibited transaction described in Section 857(b)(6) of
\nthe Code, and neither EOP nor any EOP Subsidiary has incurred any material
\nliability for taxes other than in the ordinary course of business. No event has
\noccurred, and no condition or circumstance exists, which presents a material
\nrisk that any material Tax described in the preceding sentence will be imposed
\nupon EOP. To the Knowledge of EOP, no deficiencies for any Taxes have been
\nproposed, asserted or assessed against EOP or any of the EOP Subsidiaries, and
\nno requests for waivers of the time to assess any such Taxes are pending.<\/p>\n
(b) EOP (i) has operated, and intends to continue to operate,
\nin such a manner as to qualify as a REIT within the meaning of Section 856 of
\nthe <\/p>\n
-36-
\n 45<\/p>\n
Code for the taxable year ending December 31, 1997 and intends to continue
\nto operate in such a manner as to qualify as a REIT for the taxable year that
\nincludes the Closing Date and (ii) has not taken or omitted to take any action
\nwhich would reasonably be expected to result in a challenge to its status as a
\nREIT, and to EOP’s Knowledge, no such challenge is pending or threatened. Each
\nEOP Subsidiary which is a partnership, joint venture or limited liability
\ncompany (i) has been treated since its formation and continues to be treated for
\nfederal income tax purposes as a partnership and not as a corporation or as an
\nassociation taxable as a corporation and (ii) has not since the later of its
\nformation or the acquisition by EOP of a direct or indirect interest therein,
\nowned any assets (including, without limitation, securities) that would cause
\nEOP to violate Section 856(c)(5) of the Code. Each EOP Subsidiary which is a
\ncorporation (other than EOP Management Corp.) has been since its formation a
\nqualified REIT subsidiary under Section 856(i) of the Code. EOP Partnership is
\nnot a publicly traded partnership within the meaning of Section 7704 of the
\nCode. Except as set forth in Schedule 3.11 to the EOP Disclosure Letter neither
\nEOP nor any EOP Subsidiary holds any asset (x) the disposition of which would be
\nsubject to rules similar to Section 1374 of the Code as a result of a notice
\nunder IRS Notice 88-19 or (y) which is subject to a consent filed pursuant to
\nSection 341(f) of the Code and the regulations thereunder.<\/p>\n
3.12 Brokers; Schedule of Fees and Expenses. No broker, investment
\nbanker, financial advisor or other person, other than J.P. Morgan Securities
\nInc. and Merrill Lynch & Co., the fees and expenses of which will be paid by EOP
\nand are described in the respective engagement letters with J.P. Morgan
\nSecurities Inc. and Merrill Lynch & Co., true, correct and complete copies of
\nwhich have previously been given to Beacon, is entitled to any broker’s,
\nfinder’s, financial advisor’s or other similar fee or commission in connection
\nwith the transactions contemplated hereby based upon arrangements made by or on
\nbehalf of EOP or any EOP Subsidiary.<\/p>\n
3.13 Compliance with Laws. Neither EOP nor any of the EOP
\nSubsidiaries has violated or failed to comply with any statute, law, ordinance,
\nregulation, rule, judgment, decree or order of any Governmental Entity
\napplicable to its business, properties or operations, except to the extent that
\nsuch violation or failure would not have an EOP Material Adverse Effect.<\/p>\n
3.14 Contracts; Debt Instruments. Neither EOP nor any EOP Subsidiary
\nhas received a written notice that EOP or any EOP Subsidiary is in violation of
\nor in default under (nor to the Knowledge of EOP does there exist any condition
\nwhich upon the passage of time or the giving of notice or both would cause such
\na violation of or default under) any material loan or credit agreement, note,
\nbond, mortgage, indenture, lease, permit, concession, franchise, license or any
\nother material contract, agreement, arrangement or understanding, to which it is
\na party or by which it or any of its properties or assets is bound, nor to the
\nKnowledge of EOP does such a violation or default exist, except to the extent
\nsuch violation or<\/p>\n
-37-
\n 46<\/p>\n
default, individually or in the aggregate, would not have an EOP Material
\nAdverse Effect, except as set forth in the EOP SEC Documents or in Schedule 3.14
\nto the EOP Disclosure Letter.<\/p>\n
3.15 Opinion of Financial Advisor. EOP has received the oral opinion
\nof J.P. Morgan Securities Inc., satisfactory to EOP, to the effect that the
\nconsideration to be paid by EOP and EOP Partnership in connection with the
\nMergers is fair, from a financial point of view, to EOP and EOP Operating
\nPartnership.<\/p>\n
3.16 State Takeover Statutes. EOP has taken all action necessary to
\nexempt transactions between EOP and Beacon and its Affiliates from the operation
\nof Takeover Statutes.<\/p>\n
3.17 Investment Company Act of 1940. Neither EOP nor any of the EOP
\nSubsidiaries is, or at the Effective Time will be, required to be registered
\nunder the 1940 Act.<\/p>\n
3.18 Definition of Knowledge of EOP. As used in this Agreement, the
\nphrase “Knowledge of EOP” (or words of similar import) means the knowledge of
\nthose individuals identified in Schedule 3.19 to the EOP Disclosure Letter.<\/p>\n
3.19 EOP Not an Interested Stockholder. EOP is not an “interested
\nstockholder” of Beacon or an “affiliate of an interested stockholder” of Beacon
\nwithin the meaning of Section 3-601 of the MGCL.<\/p>\n
ARTICLE 4<\/p>\n
COVENANTS<\/p>\n
4.1 Conduct of Beacon’s and Beacon Partnership’s Business
\nPending Merger. During the period from the date of this Agreement to the
\nEffective Time, except as consented to in writing by EOP or as expressly
\nprovided for in this Agreement (including as contemplated by the Principal
\nTerms of the Tax Protection Agreements set forth as Schedule 5.16 hereto),
\nBeacon and Beacon Partnership shall, and shall cause (or, in the case of Beacon
\nSubsidiaries that Beacon or Beacon Partnership do not control, shall use
\nreasonable best efforts to cause) each of the Beacon Subsidiaries to:<\/p>\n
(a) conduct its business only in the usual, regular and ordinary
\ncourse and in substantially the same manner as heretofore conducted;<\/p>\n
(b) preserve intact its business organizations and goodwill and
\nuse reasonable best efforts to keep available the services of its officers and
\nemployees;<\/p>\n
-38-
\n 47<\/p>\n
(c) confer on a regular basis with one or more representatives
\nof EOP to report operational matters of materiality and, subject to Section 4.3,
\nany proposals to engage in material transactions;<\/p>\n
(d) promptly notify EOP of any material emergency or other
\nmaterial change in the condition (financial or otherwise), business, properties,
\nassets, liabilities or the normal course of its businesses or in the operation
\nof its properties, or of any material governmental complaints, investigations or
\nhearings (or communications indicating that the same may be contemplated);<\/p>\n
(e) promptly deliver to EOP true and correct copies of any
\nreport, statement or schedule filed with the SEC subsequent to the date of this
\nAgreement;<\/p>\n
(f) maintain its books and records in accordance with GAAP
\nconsistently applied and not change in any material manner any of its methods,
\nprinciples or practices of accounting in effect at the Beacon Financial
\nStatement Date, except as may be required by the SEC, applicable law or GAAP;<\/p>\n
(g) duly and timely file all reports, tax returns and other
\ndocuments required to be filed with federal, state, local and other authorities,
\nsubject to extensions permitted by law, provided Beacon notifies EOP that it is
\navailing itself of such extensions and provided such extensions do not adversely
\naffect Beacon’s status as a qualified REIT under the Code;<\/p>\n
(h) not make or rescind any express or deemed election relative
\nto Taxes (unless required by law or necessary to preserve Beacon’s status as a
\nREIT or the status of any Beacon Subsidiary as a partnership for federal income
\ntax purposes, as the case may be);<\/p>\n
(i) make all capital expenditures, and expenditures relating to
\nleasing, in accordance with a budget of Beacon approved by EOP, which approval
\nshall not be unreasonably withheld, and will not (A) acquire, enter into any
\noption to acquire, or exercise an option or other right or election or enter
\ninto any other commitment or contractual obligation (each, a “Commitment”) for
\nthe acquisition of any real property or other transaction (other than
\nCommitments referred to in Schedule 4.1(i) to the Beacon Disclosure Letter)
\ninvolving in excess of $100,000 which is not included in its budget approved by
\nEOP, encumber assets or commence construction of, or enter into any Commitment
\nto develop or construct other real estate projects, except in the ordinary
\ncourse of its office property business or (B) incur or enter into any Commitment
\nto incur additional indebtedness (secured or unsecured) except for working
\ncapital under its revolving line(s) of credit and Commitments for indebtedness
\ndescribed on Schedule 4.1(i) to the Beacon Disclosure Letter;<\/p>\n
-39-
\n 48<\/p>\n
(j) not amend its Articles of Incorporation, as amended, or its
\nAmended and Restated Bylaws, or the articles or certificate of incorporation,
\nbylaws, code of regulations, partnership agreement, operating agreement or joint
\nventure agreement or comparable charter or organization document of any Beacon
\nSubsidiary;<\/p>\n
(k) make no change in the number of shares of capital stock,
\nmembership interests or units of limited partnership interest issued and
\noutstanding, other than pursuant to (i) the exercise of options disclosed in
\nSchedule 2.3 to the Beacon Disclosure Letter or (ii) the redemption of Beacon OP
\nUnits under existing contracts described on Schedule 2.18, or pursuant to the
\nBeacon Partnership Agreement, for cash or, at Beacon’s option, Beacon Common
\nShares;<\/p>\n
(l) grant no options or other right or commitment relating to
\nits shares of capital stock, membership interests or units of limited
\npartnership interest or any security convertible into its shares of capital
\nstock, membership interests or units of limited partnership interest, or any
\nsecurity the value of which is measured by shares of capital stock, or any
\nsecurity subordinated to the claim of its general creditors and not amend or
\nwaive any rights under any of the Beacon Stock Options;<\/p>\n
(m) except as provided in Section 5.10 and in connection with
\nthe use of Beacon Common Shares to pay the exercise price or tax withholding in
\nconnection with equity-based employee benefit plans by the participants therein,
\nnot (i) authorize, declare, set aside or pay any dividend or make any other
\ndistribution or payment with respect to any Beacon Common Shares or Beacon OP
\nUnits or (ii) directly or indirectly redeem, purchase or otherwise acquire any
\nshares of capital stock, membership interests or units of partnership interest
\nor any option, warrant or right to acquire, or security convertible into, shares
\nof capital stock, membership interests, or units of partnership interest of
\nBeacon, except for (A) redemptions of Beacon Common Shares required under
\nSection 9.5 of the Articles of Incorporation of Beacon in order to preserve the
\nstatus of Beacon as a REIT under the Code, and (B) redemptions of Beacon OP
\nUnits, whether or not outstanding on the date of this Agreement, under the
\nBeacon Partnership Agreement in which Beacon Common Shares are utilized;<\/p>\n
(n) not sell, lease, mortgage, subject to Lien or otherwise
\ndispose of any of the Beacon Properties, except in connection with a transaction
\nthat is permitted by Section 4.1(i) or that is made in the ordinary course of
\nbusiness and is the subject of a binding contract in existence on the date of
\nthis Agreement and disclosed in Schedule 2.18 to the Beacon Disclosure Schedule;<\/p>\n
(o) not sell, lease, mortgage, subject to Lien or otherwise
\ndispose of any of its personal property or intangible property, except in
\nconnection<\/p>\n
-40-
\n 49<\/p>\n
with a transaction that is permitted by Section 4.1(n) or that is made in the
\nordinary course of business and is not material, individually or in the
\naggregate;<\/p>\n
(p) not make any loans, advances or capital contributions to, or
\ninvestments in, any other Person, other than loans, advances and capital
\ncontributions to Beacon Subsidiaries in existence on the date hereof;<\/p>\n
(q) not pay, discharge or satisfy any claims, liabilities or
\nobligations (absolute, accrued, asserted or unasserted, contingent or
\notherwise), other than the payment, discharge or satisfaction, in the ordinary
\ncourse of business consistent with past practice or in accordance with their
\nterms, of liabilities reflected or reserved against in, or contemplated by, the
\nmost recent consolidated financial statements (or the notes thereto) furnished
\nto EOP or incurred in the ordinary course of business consistent with past
\npractice;<\/p>\n
(r) not guarantee the indebtedness of another Person, enter into
\nany “keep well” or other agreement to maintain any financial statement condition
\nof another Person or enter into any arrangement having the economic effect of
\nany of the foregoing;<\/p>\n
(s) not enter into any Commitment with any officer, director or
\nAffiliate of Beacon or any of the Beacon Subsidiaries or any material Commitment
\nwith any consultant;<\/p>\n
(t) not increase any compensation or enter into or amend any
\nemployment agreement described in Schedule 2.18 to the Beacon Disclosure Letter
\nwith any of its officers, directors or employees earning more than $50,000 per
\nannum, other than as required by any contract or Plan or in accordance with
\nwaivers by employees of benefits under such agreements;<\/p>\n
(u) not adopt any new employee benefit plan or amend any
\nexisting plans or rights, except for changes to severance benefits to provide
\nthat an employee whose position is transferred to a location outside the
\nstandard metropolitan statistical area in which such employee is currently
\nemployed shall not forfeit severance benefits by reason of failure to accept
\nsuch transfer, changes which are required by law and changes which are not more
\nfavorable to participants than provisions presently in effect;<\/p>\n
(v) not settle any shareholder derivative or class action claims
\narising out of or in connection with any of the transactions contemplated by
\nthis Agreement;<\/p>\n
(w) not change the ownership of any of its Subsidiaries, except
\nchanges which arise as a result of the acquisition of Beacon OP Units in<\/p>\n
-41-
\n 50<\/p>\n
exchange for Beacon Common Shares pursuant to exercise of the Beacon OP Unit
\nredemption right under Section 8.6 of the Beacon Partnership Agreement;<\/p>\n
(x) not accept a promissory note in payment of the exercise
\nprice payable under any option to purchase Beacon Common Shares; and<\/p>\n
(y) not enter into, or modify, amend or breach any Tax
\nProtection Agreement.<\/p>\n
4.2 Conduct of EOP’s and EOP Partnership’s Business Pending Merger.
\nDuring the period from the date of this Agreement to the Effective Time, except
\nas (i) contemplated by this Agreement, or (ii) consented to in writing by
\nBeacon, EOP and EOP Partnership shall, and shall cause (or, in the case of EOP
\nSubsidiaries that EOP or EOP Partnership do not control, use reasonable best
\nefforts to cause) each of the EOP Subsidiaries to:<\/p>\n
(a) preserve intact its business organizations and goodwill and
\nuse reasonable best efforts to keep available the services of its officers and
\nemployees;<\/p>\n
(b) confer on a regular basis with one or more representatives
\nof Beacon to report operational matters of materiality which would have an EOP
\nMaterial Adverse Effect;<\/p>\n
(c) promptly notify Beacon of any material emergency or other
\nmaterial change in the condition (financial or otherwise), business, properties,
\nassets, liabilities, prospects or the normal course of its businesses or in the
\noperation of its properties, or of any material governmental complaints,
\ninvestigations or hearings (or communications indicating that the same may be
\ncontemplated);<\/p>\n
(d) promptly deliver to Beacon true and correct copies of any
\nreport, statement or schedule filed with the SEC subsequent to the date of this
\nAgreement;<\/p>\n
(e) maintain its books and records in accordance with GAAP
\nconsistently applied and not change in any material manner any of its methods,
\nprinciples or practices of accounting in effect at the EOP Financial Statement
\nDate, except as may be required by the SEC, applicable law or GAAP;<\/p>\n
(f) duly and timely file all reports, tax returns and other
\ndocuments required to be filed with federal, state, local and other authorities,
\nsubject to extensions permitted by law, provided such extensions do not
\nadversely affect EOP’s status as a qualified REIT under the Code;<\/p>\n
-42-
\n 51<\/p>\n
(g) not make or rescind any express or deemed election relative
\nto Taxes (unless required by law or necessary to preserve EOP’s status as a REIT
\nor the status of any EOP Subsidiary as a partnership for federal income tax
\npurposes or as a qualified REIT subsidiary under Section 856(i) of the Code, as
\nthe case may be);<\/p>\n
(h) not enter into any Commitment for the acquisition of any
\nreal property (other than all real estate projects described in Schedule 4.2(h)
\nto the EOP Disclosure Letter) if the amount of such Commitment would cause the
\naggregate amount of all such Commitments subsequent to the date hereof to exceed
\n$1,300,000,000 unless such Commitment has been approved by Beacon;<\/p>\n
(i) not amend the EOP Declaration of Trust or the EOP Bylaws, or
\nthe articles or certificate of incorporation, bylaws, code of regulations,
\npartnership agreement, operating agreement or joint venture agreement or
\ncomparable charter or organization document of any EOP Subsidiary, including the
\nEOP Partnership Agreement (except to the extent necessary to reflect the
\nadmission of additional limited partners and other amendments in connection
\ntherewith that can be made by EOP without a vote of limited partners and that
\nwill not, individually or in the aggregate, materially adversely affect the
\nrights or obligations of holders of EOP OP Units);<\/p>\n
(j) except as provided in Section 5.10 hereof and in connection
\nwith the use of EOP Common Shares to pay the exercise price or tax withholding
\nin connection with equity-based employee benefit plans by the participants
\ntherein, not (i) authorize, declare, set aside or pay any dividend or make any
\nother distribution or payment with respect to any EOP Common Shares or EOP OP
\nUnits or (ii) directly or indirectly redeem, purchase or otherwise acquire any
\nshares of capital stock, membership interests or units of partnership interest
\nor any option, warrant or right to acquire, or security convertible into, shares
\nof capital stock, membership interests, or units of partnership interest of EOP,
\nexcept for (A) redemptions of EOP Common Shares required under Section 7.3.6 of
\nthe EOP Declaration of Trust in order to preserve the status of EOP as a REIT
\nunder the Code, and (B) redemptions of EOP OP Units, whether or not outstanding
\non the date of this Agreement, under the EOP Partnership Agreement in which EOP
\nCommon Shares are utilized;<\/p>\n
(k) not sell, lease, mortgage, subject to Lien or otherwise
\ndispose of any of the EOP Properties, except in connection with a transaction
\nthat would not reasonably be expected to have an EOP Material Adverse Effect;<\/p>\n
(l) not sell, lease, mortgage, subject to Lien or otherwise
\ndispose of any of its personal property or intangible property, except in
\nconnection with a transaction that is permitted by Section 4.2(k) or that is not
\nmaterial, individually or in the aggregate;<\/p>\n
-43-
\n 52<\/p>\n
(m) not pay, discharge or satisfy any claims, liabilities or
\nobligations (absolute, accrued, asserted or unasserted, contingent or otherwise)
\nif it would reasonably be expected to have an EOP Material Adverse Effect;<\/p>\n
(n) not directly or indirectly through a subsidiary, merge or
\nconsolidate with, or acquire all or substantially all of the assets of, or the
\nbeneficial ownership of a majority of the outstanding capital stock or other
\nequity interests in any person or entity whose securities are registered under
\nthe Exchange Act unless such transaction has been approved by Beacon; and<\/p>\n
(o) except as contemplated by this Agreement, not issue any EOP
\nor EOP Partnership securities pursuant to a Registration Statement filed with
\nthe SEC relating to the public offering of any EOP or EOP Partnership securities
\nfrom the date hereof until the date of the Proxy Statement (as defined in
\nSection 5.1) unless such issuance has been approved by Beacon.<\/p>\n
4.3 No Solicitation. Prior to the Effective Time, Beacon agrees, for
\nitself and in its capacity as general partner of the Beacon Partnership, that:<\/p>\n
(a) neither it nor any of the Beacon Subsidiaries shall invite,
\ninitiate, solicit or encourage, directly or indirectly, any inquiries,
\nproposals, discussions or negotiations or the making or implementation of any
\nproposal or offer (including, without limitation, any proposal or offer to its
\nshareholders) with respect to a merger, acquisition, tender offer, exchange
\noffer, transaction resulting in the issuance of securities representing 10% or
\nmore of the outstanding equity securities of Beacon, consolidation, share
\nexchange, business combination, sale, lease, exchange, mortgage, pledge,
\ntransfer or other disposition of 10% or more of the assets or equity securities
\n(including, without limitation, partnership interests and units) of Beacon or
\nBeacon Partnership, other than the transactions contemplated by this Agreement
\n(any such proposal or offer being hereinafter referred to as an “Acquisition
\nProposal”) or engage in any discussions or negotiations concerning or provide
\nany confidential or non-public information or data to, or have any discussions
\nwith, any person relating to an Acquisition Proposal, or otherwise facilitate
\nany effort or attempt to make or implement an Acquisition Proposal;<\/p>\n
(b) neither it nor any of the Beacon Subsidiaries will permit
\nany of its officers, directors, employees, affiliates, agents, investment
\nbankers, financial advisors, attorneys, accountants, brokers, finders or other
\nrepresentative retained by Beacon to engage in any of the activities described
\nin Section 4.3(a);<\/p>\n
(c) it and the Beacon Subsidiaries will immediately cease and
\ncause to be terminated any existing activities, discussions or negotiations with
\nany parties conducted heretofore with respect to any of the foregoing and will
\ntake the necessary steps to inform the individuals or entities referred to in
\nSection 4.3(b) of the obligations undertaken in this Section 4.3; and<\/p>\n
-44-
\n 53<\/p>\n
(d) it will notify EOP immediately if Beacon or any of the
\nBeacon Subsidiaries receives any such inquiries or proposals, or any requests
\nfor such information, or if any such negotiations or discussions are sought to
\nbe initiated or continued with it;<\/p>\n
provided, however, that nothing contained in this Section 4.3 shall prohibit the
\nBoard of Directors of Beacon (including with respect to Beacon’s capacity as
\ngeneral partner of Beacon Partnership) from (i) furnishing information to or
\nentering into discussions or negotiations with, any person or entity that makes
\nan unsolicited Acquisition Proposal, if, and only to the extent that (A) a
\nmajority of the Board of Directors of Beacon determines in good faith, based
\nupon the advice of its outside counsel, that such action is required for the
\nBoard of Directors of Beacon to comply with its duties to shareholders imposed
\nby applicable law and (B) prior to furnishing such information to, or entering
\ninto discussions or negotiations with, such person or entity, Beacon provides
\nwritten notice to EOP to the effect that it is furnishing information to, or
\nentering into discussions with, such person or entity; and (ii) making any
\ndisclosure required by applicable law with regard to an Acquisition Proposal.
\nNothing in this Section 4.3 shall (x) permit Beacon to terminate this Agreement
\n(except as specifically provided in Article 7 hereof), (y) permit Beacon to
\nenter into an agreement for an Acquisition Proposal during the term of this
\nAgreement or (z) affect any other obligation of Beacon under this Agreement;
\nprovided, however, that a majority of the Board of Directors of Beacon may
\napprove and recommend a Superior Acquisition Proposal and, in connection
\ntherewith, withdraw or modify its approval or recommendation of this Agreement
\nand the Merger in accordance with Section 5.1(e). Any disclosure that the Board
\nof Directors of Beacon may be compelled to make with respect to the receipt of
\nan Acquisition Proposal in order to comply with its duties to shareholders
\nimposed by applicable law or Rule 14d-9 or 14e-2 of the Exchange Act will not
\nconstitute a violation of this Section 4.3. As used herein, “Superior
\nAcquisition Proposal” means a bona fide Acquisition Proposal made by a third
\nparty which a majority of the members of the Board of Directors of Beacon
\nresolves in good faith to be in the best interests of and more favorable to
\nBeacon’s shareholders than the Merger and which the Board of Directors of Beacon
\ndetermines is reasonably capable of being consummated.<\/p>\n
4.4 Affiliates. Prior to the Effective Time, Beacon shall cause to
\nbe prepared and delivered to EOP a list (reasonably satisfactory to counsel for
\nEOP) identifying all persons who, at the time of the Beacon and EOP Shareholders
\nMeetings, may be deemed to be “affiliates” of Beacon as that term is used in
\nparagraphs (c) and (d) of Rule 145 under the Securities Act (the “Affiliates”).
\nBeacon shall use its reasonable best efforts to cause each person who is
\nidentified as an Affiliate in such list to deliver to EOP on or prior to the
\nEffective Time a written agreement, in the form previously approved by the
\nparties hereto, that such Affiliate will not sell, pledge, transfer or otherwise
\ndispose of any EOP Common <\/p>\n
-45-
\n 54
\nShares issued to such Affiliate pursuant to the Merger, except pursuant to an
\neffective registration statement under the Securities Act or in compliance
\nwith paragraph (d) of Rule 145 or as otherwise permitted by the Securities Act.
\nEOP shall be entitled to place legends as specified in such written agreements
\non the certificates representing any EOP Common Shares to be received pursuant
\nto the terms of this Agreement by such Affiliates who have executed such
\nagreements and to issue appropriate stop transfer instructions to the transfer
\nagent for the EOP Common Shares issued to such Affiliates, consistent with the
\nterms of such agreements. The Surviving Trust shall timely file the reports
\nrequired to be filed by it under the Exchange Act and the rules and regulations
\nadopted by the SEC thereunder, and it will take such further action as any
\nAffiliate of Beacon or EOP may reasonably request, all to the extent required
\nfrom time to time to enable such Affiliate to sell shares of beneficial
\ninterest of the Surviving Trust received by such Affiliate in the Merger
\nwithout registration under the Securities Act pursuant to (i) Rule 145(d)(1)
\nunder the Securities Act, as such rule may be amended from to time, or (ii) any
\nsuccessor rule or regulation hereafter adopted by the SEC.<\/p>\n
4.5 Other Actions. Each of Beacon and Beacon Partnership on the one
\nhand and EOP and EOP Partnership on the other hand shall not, and shall use
\ncommercially reasonable efforts to cause their respective subsidiaries and joint
\nventures not to take, any action that would result in (i) any of the
\nrepresentations and warranties of such party (without giving effect to any
\n“knowledge” qualification) set forth in this Agreement that are qualified as to
\nmateriality becoming untrue, (ii) any of such representations and warranties
\n(without giving effect to any “knowledge” qualification) that are not so
\nqualified becoming untrue in any material respect or (iii) except as
\ncontemplated by Section 4.3, any of the conditions to the Merger set forth in
\nArticle 6 not being satisfied.<\/p>\n
ARTICLE 5<\/p>\n
ADDITIONAL COVENANTS<\/p>\n
5.1 Preparation of the Registration Statement and the Proxy
\nStatement; Beacon Shareholders Meeting, Beacon Unitholders Consent Solicitation
\nand EOP Shareholders Meeting.<\/p>\n
(a) As promptly as practicable after execution of this
\nAgreement, (i) each of Beacon and EOP shall prepare and file with the SEC (with
\nappropriate requests for confidential treatment, unless the parties hereto
\notherwise agree) under the Exchange Act, (x) one or more joint proxy
\nstatements\/prospectuses and forms of proxies (such joint proxy
\nstatement(s)\/prospectus(es) together with any amendments to supplements thereto,
\nthe “Proxy Statement”) relating to the stockholder meetings of each of Beacon
\nand EOP, the vote of the stockholders of Beacon and EOP with respect to the
\nMerger, and the consent, if any, of partners of Beacon Partnership and EOP
\nPartnership in connection with any required Partner <\/p>\n
-46-
\n 55<\/p>\n
Approvals and (y) an information statement\/prospectus relating to the
\nissuance of EOP Preferred Shares pursuant to the Merger and (ii) following
\nclearance by the SEC of the Proxy Statement, EOP shall within two business days
\nprepare and file with the SEC under the Securities Act a registration statement
\non Form S-4 (such registration statement, together with any amendments or
\nsupplements thereto, the “Form S-4”), in which the Proxy Statement and any
\ninformation statement\/prospectus described in clause (y) above will be
\nincluded, as one or more prospectuses in connection with the registration under
\nthe Securities Act of the EOP Common Shares, EOP Preferred Shares and EOP OP
\nUnits to be distributed to the holders of Beacon Common Shares, Beacon
\nPreferred Stock and Beacon OP Units in the Merger. The respective parties will
\ncause the Proxy Statement and the Form S-4 to comply as to form in all material
\nrespects with the applicable provisions of the Securities Act, the Exchange Act
\nand the rules and regulations thereunder. Each of Beacon, Beacon Partnership,
\nEOP and EOP Partnership shall furnish all information about itself and its
\nbusiness and operations and all necessary financial information to the other as
\nthe other may reasonably request in connection with the preparation of the
\nProxy Statement and the Form S-4. EOP shall use its reasonable best efforts,
\nand Beacon will cooperate with it, to have the Form S-4 declared effective by
\nthe SEC as promptly as practicable (including clearing the Proxy Statement with
\nthe SEC), taking into account EOP’s permitted activities hereunder and
\napplicable legal requirements. Each of Beacon and Beacon Partnership, on the
\none hand, and EOP and EOP Partnership, on the other hand, agree promptly to
\ncorrect any information provided by it for use in the Proxy Statement and the
\nForm S-4 if and to the extent that such information shall have become false or
\nmisleading in any material respect, and each of the parties hereto further
\nagrees to take all steps necessary to amend or supplement the Proxy Statement
\nand the Form S-4 and to cause the Proxy Statement and the Form S-4 as so
\namended or supplemented to be filed with the SEC and to be disseminated to
\ntheir respective stockholders and partners, in each case as and to the extent
\nrequired by applicable federal and state securities laws. Each of Beacon,
\nBeacon Partnership, EOP and EOP Partnership agrees that the information
\nprovided by it for inclusion in the Proxy Statement or the Form S-4 and each
\namendment or supplement thereto, at the time of mailing thereof and at the time
\nof the respective meetings of stockholders of Beacon and EOP and at the time of
\nthe respective taking of consents, if any, of partners of Beacon Partnership
\nand EOP Partnership, will not include an untrue statement of a material fact or
\nomit to state a material fact required to be stated therein or necessary to
\nmake the statements therein, in light of the circumstances under which they
\nwere made, not misleading. EOP will advise and deliver copies (if any) to
\nBeacon, promptly after it receives notice thereof, of any request by the SEC
\nfor amendment of the Proxy Statement or the Form S-4 or comments thereon and
\nresponses thereto or requests by the SEC for additional information (regardless
\nwhether such requests relate to EOP or EOP Partnership, on the one hand, and
\nBeacon or Beacon Partnership, on the other hand), and EOP shall promptly notify
\nBeacon of (i) the time when the Form S-4 has become<\/p>\n
-47-
\n 56<\/p>\n
effective, (ii) or any supplement or amendment thereto has been filed, (iii) the
\nissuance of any stop order, and (iv) the suspension of the qualification and
\nregistration of the EOP Common Shares, EOP Preferred Shares and EOP OP Units
\nissuable in connection with the Mergers.<\/p>\n
(b) Each of Beacon, Beacon Partnership, EOP and EOP Partnership
\nshall use its reasonable best efforts to timely mail the joint proxy
\nstatement\/prospectus contained in the Form S-4 to its stockholders. It shall be
\na condition to the mailing of the joint proxy statement\/prospectus that (i) EOP
\nand EOP Partnership shall have received a “comfort” letter from Coopers & Lybrand, LLP, independent public accountants for Beacon and Beacon Partnership,
\nof the kind contemplated by the Statement of Auditing Standards with respect to
\nLetters to Underwriters promulgated by the American Institute of Certified
\nPublic Accountants (the “AICPA Statement”), dated as of the date on which the
\nForm S-4 shall become effective and as of the Effective Time, addressed to EOP
\nand EOP Partnership, in form and substance reasonably satisfactory to EOP and
\nEOP Partnership, concerning the procedures undertaken by Coopers & Lybrand, LLP
\nwith respect to the financial statements and information of Beacon, Beacon
\nPartnership and their subsidiaries contained in the Form S-4 and the other
\nmatters contemplated by the AICPA Statement and otherwise customary in scope and
\nsubstance or letters delivered by independent public accountants in connection
\nwith transactions such as those contemplated by this Agreement and (ii) Beacon
\nshall have received a “comfort” letter from Ernst & Young LLP, independent
\npublic accountants for EOP and EOP Partnership, of the kind contemplated by the
\nAICPA Statement, dated as of the date on which the Form S-4 shall become
\neffective and as of the Effective Time, addressed to Beacon and Beacon
\nPartnership, in form and substance reasonably satisfactory to Beacon, concerning
\nthe procedures undertaken by Ernst & Young, LLP with respect to the financial
\nstatements and information of EOP, EOP Partnership and their subsidiaries
\ncontained in the Form S-4 and the other matters contemplated by the AICPA
\nStatement and otherwise customary in scope and substance for letters delivered
\nby independent public accountants in connection with transactions such as those
\ncontemplated by this Agreement.<\/p>\n
(c) EOP will duly call and as soon as practicable following the
\ndate of this Agreement (but in no event sooner than 20 business days following
\nthe date the Proxy Statement is mailed to the shareholders of EOP), give notice
\nof, convene and hold a meeting of its shareholders (the “EOP Shareholders
\nMeeting”) for the purpose of obtaining the EOP Shareholder Approvals. EOP will,
\nthrough its Board of Trustees, recommend to its shareholders approval of this
\nAgreement, the Merger, and the transactions contemplated by this Agreement.<\/p>\n
(d) On or before September 22, 1997, EOP and EOP Partnership
\nshall deliver to Beacon and Beacon Partnership (i) a list of all information to
\nbe provided by Beacon or Beacon Partnership that is required to be<\/p>\n
-48-
\n 57<\/p>\n
included in the Proxy Statement in accordance with the applicable provisions of
\nthe Securities Act, the Exchange Act and the rules and regulations thereunder
\nand (ii) an irrevocable letter of credit in the face amount of $10,000,000
\nissued by a bank reasonably acceptable to the parties, naming Beacon Partnership
\nas beneficiary, expiring no sooner than June 1, 1998 and payable at site upon
\npresentation of a sight draft and an affidavit of Beacon Partnership stating
\nthat all conditions to a draw under the letter of credit pursuant to this
\nSection 5.1(d) have been met and the beneficiaries are entitled to draw the full
\namount thereunder. In addition, in the event that EOP and EOP Partnership shall
\nfail to file the Proxy Statement with the SEC within fifteen (15) days after EOP
\nand EOP Partnership have received all information requested pursuant to clause
\n(i) above substantially in final form, EOP and EOP Partnership shall deliver to
\nBeacon and Beacon Partnership another irrevocable letter of credit in the face
\namount of $5,000,000 and otherwise satisfying the requirements of clause (ii)
\nabove. In the event Beacon shall terminate this Agreement pursuant to Section
\n7.1(e), and provided that Beacon shall not have breached in any material respect
\nits obligations under this Agreement in any manner that shall have caused the
\noccurrence of either of the events referred to in clauses (x) and (y) to this
\nSection 5.1(d), then at any time following the expiration of three (3) business
\ndays after EOP’s receipt of written notice of such termination, Beacon shall be
\nentitled to draw on the letter(s) of credit posted pursuant to this Section
\n5.1(c) if either of the following events has occurred: (x) EOP and EOP
\nPartnership shall have failed to file the Proxy Statement with the SEC within
\nfifteen (15) days after EOP and EOP Partnership have received all information
\nrequested pursuant to clause (i) above substantially in final form or (y) the
\nForm S-4 shall not have been declared effective by the SEC on or before February
\n27, 1998. The receipt of Beacon and Beacon Partnership of any amounts pursuant
\nto this Section 5.1(d) shall not affect the other remedies, if any, available to
\nsuch parties.<\/p>\n
(e) Beacon will duly call and give notice of and, as soon as
\npracticable following the date of this Agreement (but in no event sooner than 20
\nbusiness days following the date the Proxy Statement is mailed to the
\nshareholders of Beacon), convene and hold a meeting of its shareholders (the
\n“Beacon Shareholders Meeting”) for the purpose of obtaining Beacon Shareholder
\nApprovals. Beacon will, through its Board of Directors, recommend to its
\nshareholders approval of this Agreement, the Merger and the transactions
\ncontemplated by this Agreement and include such recommendation in the Proxy
\nStatement; provided, however, that prior to the Beacon Shareholders Meeting,
\nsuch recommendation may be withdrawn, modified or amended if a majority of the
\nBoard of Directors of Beacon determines in good faith, based upon the advice of
\nits outside counsel, that such action is required for the Board of Directors of
\nBeacon to comply with its duties to its shareholders imposed by applicable law.<\/p>\n
(f) EOP and Beacon shall use their best efforts to convene their
\nrespective shareholder meetings on the same day, which day, subject to the<\/p>\n
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\n 58<\/p>\n
provisions of Sections 5.1(c), 5.1(d) and 5.3, shall be a day not later than 45
\ndays after the date the Proxy Statement is mailed.<\/p>\n
(g) If on the date for the EOP Shareholders Meeting and Beacon
\nShareholders Meeting established pursuant to Section 5.1(f) of this Agreement,
\neither EOP or Beacon has not received duly executed proxies for a sufficient
\nnumber of votes to approve the Merger (but less than a majority of the
\noutstanding Beacon Common Shares or EOP Common Shares, as the case may be, have
\nvoted against the Merger), then both parties shall recommend the adjournment of
\ntheir respective shareholders meetings until one or more dates not later than
\nthe date ten (10) days after the originally scheduled date of the shareholders
\nmeetings.<\/p>\n
(h) Beacon will request written consents for approval by the
\nlimited partners of Beacon Partnership of each of the matters described in the
\ndefinition of Beacon Partner Approvals. Beacon hereby agrees to vote in favor of
\nsuch matters and to recommend to the limited partners of Beacon Partnership that
\nthey approve such matters. EOP will request written consents, if any is
\nrequired, by the limited partners, of EOP Partnership of each of the matters
\ndescribed in the definition of EOP Partner Approvals. EOP hereby agrees to vote,
\nif any is required, in favor of such matters and to recommend to the limited
\npartners of EOP Partnership that they approve such matters.<\/p>\n
5.2 Access to Information; Confidentiality. Subject to the
\nrequirements of confidentiality agreements with third parties, each of the
\nparties shall, and shall cause each of its Subsidiaries to, afford to the other
\nparties and to the officers, employees, accountants, counsel, financial advisors
\nand other representatives of such other parties, reasonable access during normal
\nbusiness hours prior to the Effective Time to all their respective properties,
\nbooks, contracts, commitments, personnel and records and, during such period,
\neach of the parties shall, and shall cause each of its Subsidiaries to, furnish
\npromptly to the other parties (a) a copy of each report, schedule, registration
\nstatement and other document filed by it during such period pursuant to the
\nrequirements of federal or state securities laws and (b) all other information
\nconcerning its business, properties and personnel as such other party may
\nreasonably request. Each of the parties shall, and shall cause its Subsidiaries
\nto, use commercially reasonable efforts to cause its officers, employees,
\naccountants, counsel, financial advisors and other representatives and
\naffiliates to, hold any nonpublic information in confidence.<\/p>\n
5.3 Reasonable Best Efforts; Notification.<\/p>\n
(a) Subject to the terms and conditions herein provided, each of
\nthe parties shall: (i) use all reasonable best efforts to cooperate with one
\nanother in (A) determining which filings are required to be made prior to the
\nEffective Time <\/p>\n
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\n 59<\/p>\n
with, and which consents, approvals, permits or authorizations are required to
\nbe obtained prior to the Effective Time from, governmental or regulatory
\nauthorities of the United States, the several states and foreign jurisdictions
\nand any third parties in connection with the execution and delivery of this
\nAgreement, and the consummation of the transactions contemplated hereby and (B)
\ntimely making all such filings and timely seeking all such consents, approvals,
\npermits and authorizations; (ii) use all reasonable best efforts (other than the
\npayment of money) to obtain in writing any consents required from third parties
\nto effectuate the Merger, such consents to be in form reasonably satisfactory to
\neach of the parties; and (iii) use all reasonable best efforts to take, or cause
\nto be taken, all other action and do, or cause to be done, all other things
\nnecessary, proper or appropriate to consummate and make effective the
\ntransactions contemplated by this Agreement. If at any time after the Effective
\nTime any further action is necessary or desirable to carry out the purpose of
\nthis Agreement, each party shall take all such necessary action.<\/p>\n
(b) Beacon and Beacon Partnership shall use all reasonable best
\nefforts to obtain from Coopers & Lybrand, LLP, access to all work papers
\nrelating to audits of Beacon and Beacon Partnership performed by Coopers & Lybrand, LLP, and the continued cooperation of Coopers & Lybrand, LLP, with
\nregard to the preparation of consolidated financial statements for the Surviving
\nTrust.<\/p>\n
(c) Beacon and Beacon Partnership shall give prompt notice to
\nEOP and EOP Partnership, and EOP and EOP Partnership shall give prompt notice to
\nBeacon and Beacon Partnership, (i) if any representation or warranty made by it
\ncontained in this Agreement that is qualified as to materiality becomes untrue
\nor inaccurate in any respect or any such representation or warranty that is not
\nso qualified becomes untrue or inaccurate in any material respect or (ii) of the
\nfailure by it to comply with or satisfy in any material respect any covenant,
\ncondition or agreement to be complied with or satisfied by it under this
\nAgreement; provided, however, that no such notification shall affect the
\nrepresentations, warranties, covenants or agreements of the parties or the
\nconditions to the obligations of the parties under this Agreement.<\/p>\n
5.4 Tax Treatment. Each of EOP and Beacon shall use its reasonable
\nbest efforts before and after the Effective Time to cause the Merger to qualify
\nas a reorganization under the provisions of Sections 368(a) of the Code and to
\nobtain the opinions of counsel referred to in Sections 6.2(e) and 6.3(e). If,
\nbased upon the advice of counsel, EOP and Beacon determine that the Partnership
\nMerger could reasonably be expected to create a risk that the Merger would not
\nqualify as a reorganization under the provisions of Section 368(a) of the Code,
\nEOP and Beacon undertake to use reasonable best efforts to negotiate and
\nstructure an alternative means to effect the Merger, for EOP to acquire the
\ninterest in Beacon Partnership <\/p>\n
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\n 60<\/p>\n
owned by Beacon, and for the holders of Beacon OP Units to receive EOP OP Units
\n(or the economic and tax equivalent thereof) in exchange for their Beacon OP
\nUnits. EOP Partnership will use the “traditional method” under Treasury
\nRegulations Section 1.704-3(b) for purposes of making allocations under Section
\n704(c) of the Code with respect to the properties of or interests in the Beacon
\nPartnership as of the Effective Time (with no curative allocations of gross
\nincome with respect to depreciation to offset the effects of the “ceiling rule”
\nbut with a curative allocation of gain upon disposition of such properties to
\noffset the effect of the “ceiling rule”). EOP Partnership and Beacon Partnership
\nshall negotiate in good faith to agree upon the “Section 704(c) values” of the
\nproperties of Beacon Partnership, effective as of the Closing Date. For purposes
\nof allocating “excess nonrecourse liabilities” of the EOP Partnership pursuant
\nto Treasury Regulations Section 1.752-3(a)(3) following the Closing Date, EOP
\nPartnership shall use a methodology to be agreed upon between EOP Partnership
\nand Beacon Partnership.<\/p>\n
5.5 Public Announcements. Each party will consult with each
\nother party before issuing, and provide each other the opportunity to review and
\ncomment upon, any press release or other written public statements which address
\nin any manner the transactions contemplated by this Agreement, and shall not
\nissue any such press release or make any such written public statement prior to
\nsuch consultation, except as may be required by applicable law, court process or
\nby obligations pursuant to any listing agreement with any national securities
\nexchange. The parties agree that the initial press release to be issued with
\nrespect to the transactions contemplated by this Agreement will be in the form
\nagreed to by the parties prior to the execution of this Agreement.<\/p>\n
5.6 Listing. EOP shall use all reasonable best efforts to cause
\nthe EOP Common Shares and the EOP Preferred Shares to be issued in the Merger
\nand the EOP Common Shares reserved for issuance upon redemption of EOP OP Units
\nissued in the Partnership Merger, to be approved for listing on the NYSE,
\nsubject to official notice of issuance, prior to the Effective Time.<\/p>\n
5.7 Transfer and Gains Taxes. Each party shall cooperate in the
\npreparation, execution and filing of all returns, questionnaires, applications
\nor other documents regarding any real property transfer or gains, sales, use,
\ntransfer, value added stock transfer and stamp taxes, any transfer, recording,
\nregistration and other fees and any similar taxes which become payable in
\nconnection with the transactions contemplated by this Agreement (together with
\nany related interests, penalties or additions to tax, “Transfer and Gains
\nTaxes”). From and after the Effective Time, EOP shall pay or cause EOP Operating
\nPartnership, as appropriate, to pay or cause to be paid, without deduction or
\nwithholding from any amounts payable to the holders of EOP Common Shares and EOP
\nPreferred Shares, or EOP OP Units, as applicable, all Transfer and Gains Taxes
\n(which term shall not in any event be construed to include for these purposes
\nany tax imposed under the Code).<\/p>\n
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\n 61<\/p>\n
5.8 Benefit Plans and Other Employee Arrangements.<\/p>\n
(a) Benefit Plans. After the Effective Time, all employees of
\nBeacon who are employed by the Surviving Trust shall, at the option of the
\nSurviving Trust, either continue to be eligible to participate in an “employee
\nbenefit plan”, as defined in Section 3(3) of ERISA, of Beacon which is, at the
\noption of the Surviving Trust, continued by the Surviving Trust, or
\nalternatively shall be eligible to participate in the same manner as other
\nsimilarly situated employees of the Surviving Trust who were formerly employees
\nof EOP in any “employee benefit plan,” as defined in Section 3(3) of ERISA,
\nsponsored or maintained by the Surviving Trust after the Effective Time. With
\nrespect to each such employee benefit plan, service with Beacon or any Beacon
\nSubsidiary (as applicable) and the predecessor of any of them shall be included
\nfor purposes of determining eligibility to participate, vesting (if applicable)
\nand entitlement to benefits.<\/p>\n
(b) Stock Option Plan. The stock option plan of Beacon shall be
\ndiscontinued.<\/p>\n
(c) Beacon Stock Options. As of the Effective Time, each
\noutstanding Beacon Stock Option shall vest and be immediately exercisable, be
\nassumed by EOP, and be deemed to constitute an option to acquire the same
\nnumber of EOP Common Shares as the holder of such Beacon Stock Option would
\nhave been entitled to receive pursuant to the Merger had such holder exercised
\nsuch Beacon Stock Option in full immediately prior to the Effective Time at a
\nprice per share equal to the aggregate exercise price for the Beacon Common
\nShares subject to such Beacon Stock Option divided by the number of full EOP
\nCommon Shares deemed to be purchasable pursuant to such Beacon Stock Option;
\nprovided, however, that the number of EOP Common Shares that may be purchased
\nupon exercise of such Beacon Stock Option shall not include any fractional
\nshare and, upon the first such exercise of such Beacon Stock Option, a cash
\npayment shall be made for any fractional share calculated in accordance with
\nand in the manner provided for calculations as to be paid in lieu of fractional
\nshares as part of the Merger Consideration under Section 1.10. All such Beacon
\nStock Options held by directors and officers of Beacon above the office of Vice
\nPresident shall remain exercisable for one day after the Closing Date and shall
\nexpire at 11:59 p.m., New York time, on the day next business day following
\nthe Closing Date and all such Beacon Stock Options held by persons other than
\ndirectors and officers of Beacon above the office of Vice President shall
\nexpire on the six month anniversary of the Closing Date if such person’s
\nemployment does not terminate prior to or during such six-month period;
\nprovided, however, that EOP shall use its reasonable best efforts to enable
\neach person who holds Beacon Stock Options as of the Effective Time and who
\nexercises (with no requirement to deliver funds or withholding amounts until
\nsettlement) such Beacon Stock Options subsequent to the Effective Time but
\nprior to 11:59 p.m., New York time, on the next business day following the
\nClosing Date to receive (other than from EOP or any EOP Subsidiary), within
\nfour (4) business days after the Effective Time, an amount per Beacon Stock
\nOption equal to the excess, if any, of (A) the closing price of one EOP Common
\nShare on the New York Stock Exchange (the “NYSE”) on the next business day
\nfollowing the Closing Date, over (B) the sum of (i) the exercise price of such
\nBeacon Stock Option divided by the Exchange Ratio plus (ii) with respect to
\ndirectors and officers of Beacon above the office of Vice President, an amount
\nequal to any reasonable and customary brokerage commissions payable with
\nrespect to the sale of EOP Common Shares in connection with such option
\nexercise; and, if EOP is unsuccessful in enabling each <\/p>\n
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\n 62<\/p>\n
such person to receive such amount, then such Beacon Stock Option shall not
\nexpire prior to its stated expiration date and EOP shall use its reasonable
\nbest efforts to make other arrangements to enable each such person to receive
\nthe full economic benefit of such amount (provided that neither EOP nor any EOP
\nSubsidiary shall have any obligation to pay to any such person any amount of
\ncash or cash equivalents with respect to his or her Beacon Stock Options). <\/p>\n
(d) Withholding. To the extent required by applicable law,
\nBeacon shall require each employee who exercises a Beacon Stock Option or who
\nreceives Beacon Common Shares pursuant to any existing commitment to pay to
\nBeacon in cash or Beacon Common Shares an amount sufficient to satisfy in full
\nBeacon’s obligation to withhold Taxes incurred by reason of such exercise or
\nissuance.<\/p>\n
5.9 Indemnification.<\/p>\n
(a) From and after the Effective Time, EOP and EOP Partnership
\n(collectively, the “Indemnifying Parties”) shall provide exculpation and
\nindemnification for each person who is now or has been at any time prior to the
\ndate hereof or who becomes prior to the Effective Time, an officer or director
\nof Beacon or any Beacon Subsidiary (the “Indemnified Parties”) which is the same
\nas the exculpation and indemnification provided to the Indemnified Parties by
\nBeacon and the Beacon Subsidiaries immediately prior to the Effective Time in
\nits charter, Bylaws or in its partnership, operating or similar agreement, as in
\neffect on the date hereof; provided, however, that such exculpation and
\nindemnification covers actions on or prior to the Effective Time, including,
\nwithout limitation, all transactions contemplated by this Agreement.<\/p>\n
(b) In addition to the rights provided in Section 5.9(a) above,
\nin the event of any threatened or actual claim, action, suit, proceeding or
\ninvestigation, whether civil, criminal or administrative, including without
\nlimitation, any action by or on behalf of any or all security holders of Beacon
\nor EOP, or any Beacon Subsidiary or EOP Subsidiary, or by or in the right of
\nBeacon or EOP, or any Beacon Subsidiary or EOP Subsidiary, or any claim, action,
\nsuit, proceeding or investigation in which any person who is now, or has been,
\nat any time prior to the date hereof, or who becomes prior to the Effective
\nTime, an officer, employee or director of Beacon or any Beacon Subsidiary (the
\n“Indemnification Parties”) is, or is threatened to be, made a party based in
\nwhole or in part on, or arising in whole or in part out of, or pertaining to (i)
\nthe fact that he is or was an<\/p>\n
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63<\/p>\n
officer, employee or director of Beacon or any of the Beacon Subsidiaries or any
\naction or omission by such person in his capacity as a director, or (ii) this
\nAgreement or the transactions contemplated by this Agreement, whether in any
\ncase asserted or arising before or after the Effective Time, EOP, Beacon and the
\nIndemnified Parties, hereby agree to use their reasonable best efforts to
\ncooperate in the defense of such claim, action, suit, proceeding or
\ninvestigation. The Indemnified Parties shall have the right to select counsel,
\nsubject to the consent of the Indemnifying Parties (which consent shall
\nnot be unreasonably withheld or delayed). It is understood and agreed that,
\nafter the Effective Time, the Indemnifying Parties shall indemnify and hold
\nharmless, as and to the full extent permitted by applicable law, each
\nIndemnified Party against any losses, claims, liabilities, expenses (including
\nreasonable attorneys’ fees and expenses), judgments, fines and amounts paid in
\nsettlement in accordance herewith in connection with any such threatened or
\nactual claim, action, suit, proceeding or investigation. In addition, after the
\nEffective Time, in the event of any such threatened or actual claim, action,
\nsuit, proceeding or investigation, the Indemnifying Parties shall promptly pay
\nand advance reasonable expenses and costs incurred by each Indemnified Person as
\nthey become due and payable in advance of the final disposition of the claim,
\naction, suit, proceeding or investigation to the fullest extent and in the
\nmanner permitted by law. Notwithstanding the foregoing, the Indemnifying Parties
\nshall not be obligated to advance any expenses or costs prior to receipt of an
\nundertaking by or on behalf of the Indemnified Party to repay any expenses
\nadvanced if it shall ultimately be determined that the Indemnified Party is not
\nentitled to be indemnified against such expense. Notwithstanding anything to the
\ncontrary set forth in this Agreement, the Indemnifying Parties (i) shall not be
\nliable for any settlement affected without their prior written consent, and (ii)
\nshall not have any obligation hereunder to any Indemnified Party to the extent
\nthat a court of competent jurisdiction shall determine in a final and
\nnon-appealable order that such indemnification is prohibited by applicable law.
\nIn the event of a final and non-appealable determination by a court that any
\npayment of expenses is prohibited by applicable law, the Indemnified Person
\nshall promptly refund to the Indemnifying Parties the amount of all such
\nexpenses theretofore advanced pursuant hereto. Any Indemnified Party wishing to
\nclaim indemnification under this Section 5.9, upon learning of any such claim,
\naction, suit, proceeding or investigation, shall promptly notify the
\nIndemnifying Parties of such claim and the relevant facts and circumstances with
\nrespect thereto; provided, however, that the failure to provide such notice
\nshall not affect the obligations of EOP except to the extent such failure to
\nnotify materially prejudices the Indemnifying Parties ability to defend such
\nclaim, action, suit, proceeding or investigation; and provided, further,
\nhowever, that no Indemnified Party shall be obligated to provide any
\nnotification pursuant to this Section 5.9(b) prior to the Effective Time.<\/p>\n
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\n 64<\/p>\n
(c) At or prior to the Effective Time, EOP shall purchase
\ndirectors’ liability insurance policy coverage for Beacon’s executive officers
\nfor a period of six years which will provide the directors and officers with
\ncoverage on substantially similar terms as currently provided by Beacon to such
\ndirectors and officers. Beacon shall have the right to reasonably review and
\napprove any such policy, which approval shall not be unreasonably withheld.<\/p>\n
(d) This Section 5.9 is intended for the irrevocable benefit of,
\nand to grant third party rights to, the Indemnified Parties and their
\nsuccessors, assigns and heirs and shall be binding on all successors and assigns
\nof EOP. Each of the Indemnified Parties shall be entitled to enforce the
\ncovenants contained in this Section 5.9 and EOP acknowledges and agrees that
\neach Indemnified Party would suffer irreparable harm and that no adequate remedy
\nat law exists for a breach of such covenants and such Indemnified Party shall be
\nentitled to injunctive relief and specific performance in the event of any
\nbreach of any provision in this Section.<\/p>\n
(e) In the event that the Surviving Trust or any of its
\nrespective successors or assigns (i) consolidates with or merges into any other
\nperson and shall not be the continuing or surviving corporation or entity of
\nsuch consolidation or merger or (ii) transfers all or substantially all of its
\nproperties and assets to any person, then, and in each such case the successors
\nand assigns of such entity shall assume the obligations set forth in this
\nSection 5.9, which obligations are expressly intended to be for the irrevocable
\nbenefit of, and shall be enforceable by, each director and officer covered
\nhereby.<\/p>\n
5.10 Declaration of Dividends and Distributions. From and after the
\ndate of this Agreement, neither Beacon nor EOP shall make any dividend or
\ndistribution to its shareholders without the prior written consent of the other
\nparty; provided, however, the written consent of the other party shall not be
\nrequired for the authorization and payment of quarterly distributions with
\nrespect to the Beacon Common Shares or EOP Common Shares for the dividend for
\nthe third quarter of 1997 and for each quarterly dividend thereafter in an
\namount up to the dividend per share paid by it for the second quarter of 1997
\n(provided that, for purposes of this Section 5.10 only, EOP’s dividend per share
\npaid by it for the second quarter of 1997 shall be deemed to be $.30); provided,
\nhowever, the record date for each distribution with respect to the Beacon Common
\nShares shall be the same date as the record date for the quarterly distribution
\nfor the EOP Common Shares as provided to Beacon by notice not less than twenty
\n(20) business days prior to the record date for any quarterly EOP distribution.
\nFrom and after the date of this Agreement, Beacon Partnership shall not make any
\ndistribution to the holders of Beacon OP Units except a distribution per Beacon
\nOP Unit in the same amount as a dividend per Beacon Common Share permitted
\npursuant to this Section, with the same record and payment dates as such
\ndividend on the Beacon Common Shares. <\/p>\n
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\n 65<\/p>\n
The foregoing restrictions shall not apply, however, to the extent a
\ndistribution by Beacon or EOP is necessary for Beacon or EOP, as applicable, to
\nmaintain REIT status.<\/p>\n
5.11 Transfer of Management Company Shares. At the Closing and
\npursuant to the Stock Purchase Agreements, each of the holders of voting capital
\nstock of the Management Company, Design Company and Construction Company (other
\nthan Beacon Partnership, to the extent it owns any such voting capital stock)
\nshall transfer to EOP Management Corp. or such person or persons as EOP
\nManagement Corp. shall designate by written notice delivered to them prior to
\nthe Closing, all of the shares of each such Company owned by them, constituting
\nall the outstanding shares of such companies which are not owned by Beacon
\nPartnership, for an aggregate consideration in an amount equal to the fair
\nmarket value of such shares, as determined in accordance with the provisions of
\nthe Stock Purchase Agreements.<\/p>\n
5.12 Notices. EOP shall provide such notice to its preferred
\nshareholders of the Merger as is required under Maryland law.<\/p>\n
5.13 Resignations. On the Closing Date, Beacon shall cause the
\ndirectors and officers of each of the Beacon Subsidiaries to submit their
\nresignations from such positions, effective as of the Effective Time.<\/p>\n
5.14 Third Party Management Agreements. Beacon will not, and will
\nnot permit any of its Subsidiaries to, amend the management agreements pursuant
\nto which Beacon, directly or indirectly, manages buildings in which Beacon does
\nnot own a 100% interest. Beacon will not, and will not permit any Beacon
\nSubsidiary to, renew such management agreements except on terms which permit its
\ncancellation by Beacon or the applicable Beacon Subsidiary on thirty days’
\nnotice or less without any charge, penalty or other cost for such cancellation.<\/p>\n
5.15 Existing Restrictions on Resale of Certain Beacon Properties.
\nEOP and EOP Partnership shall assume the obligations of Beacon, Beacon
\nPartnership or the applicable Beacon Subsidiary, as the case may be, under the
\nTax Protection Agreements described in Schedule 2.18(j) to the Beacon Disclosure
\nLetter.<\/p>\n
5.16 Agreement to Hold Certain Properties and Maintain Certain
\nIndebtedness. EOP and EOP Partnership will enter into agreements with Beacon and
\nBeacon Partnership, for the benefit of and enforceable by the individuals and
\nentities set forth in Schedule 5.16 hereto, implementing the principal terms set
\nforth in Schedule 5.16 hereto, the purpose of which is to permit the individuals
\nand entities set forth in Schedule 5.16 hereto to defer the recognition of gain
\nfor federal income tax purposes that otherwise would be recognized if certain
\nproperties were to be sold and\/or certain outstanding loans were to be repaid.
\nEOP, EOP Partnership, Beacon and Beacon Partnership agree to negotiate in good
\nfaith the <\/p>\n
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\n 66<\/p>\n
specific provisions of such agreements consistent with the principal terms set
\nforth in Schedule 5.16 hereto and enter into such agreements prior to the
\nClosing Date.<\/p>\n
5.17 RWLP Corp. If requested by EOP Management Corp., Beacon and
\nBeacon Partnership shall use their reasonable best efforts to (a) cause RWLP
\nCorp. to sell its interest in Rowes Wharf Limited Partnership to Design Corp.,
\nConstruction Corp. or such other person as may be designated by EOP Management
\nCorp. for the fair market value thereof at or within two (2) years after the
\nEffective Time; (b) cause the stockholders of RWLP Corp. to sell all of their
\nstock of RWLP Corp. to Design Corp., Construction Corp. or such other person as
\nmay be designated by EOP Management Corp. for the fair market value thereof at
\nor within two (2) years after the Effective Time; and (c) take such other
\nactions in connection with RWLP Corp. as EOP Management Corp. reasonably may
\nrequest, including, without limitation, converting the general partner interest
\nof RWLP Corp. in Rowes Wharf Limited Partnership into a limited partnership
\ninterest and consenting to the substitution of Design Corp., Construction Corp.,
\nor such other person as may be designated by EOP Management Corp., as a general
\npartner of Rowes Wharf Limited Partnership.<\/p>\n
ARTICLE 6<\/p>\n
CONDITIONS<\/p>\n
6.1 Conditions to Each Party’s Obligation to Effect the Merger. The
\nobligations of each party to effect the Mergers and to consummate the other
\ntransactions contemplated by this Agreement to occur on the Closing Date shall
\nbe subject to the fulfillment at or prior to the Closing Date of the following
\nconditions:<\/p>\n
(a) Shareholder and Partner Approvals. This Agreement, the
\nMergers and all other matters necessary to consummate the other transactions
\ncontemplated to occur on the Closing Date and the transactions contemplated by
\nthis Agreement shall have been approved and adopted by the Shareholder Approvals
\nand all required Partner Approvals shall have been obtained.<\/p>\n
(b) HSR Act. The waiting period (and any extension thereof)
\napplicable to the Partnership Merger, the Merger and the transactions
\ncontemplated by the Stock Purchase Agreements under the HSR Act, if applicable
\nto the Partnership Merger, the Merger and the transactions contemplated by the
\nStock Purchase Agreements, shall have expired or been terminated.<\/p>\n
(c) Listing of Shares. The NYSE shall have approved for listing
\nthe EOP Common Shares and the EOP Preferred Shares to be issued in the Merger
\nand the EOP Common Shares reserved for issuance upon redemption of EOP OP Units
\nissued in the Partnership Merger, subject to official notice of issuance.<\/p>\n
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\n 67<\/p>\n
(d) Registration Statement. The Registration Statement shall
\nhave become effective under the Securities Act and shall not be the subject of
\nany stop order or proceedings by the SEC seeking a stop order.<\/p>\n
(e) No Injunctions or Restraints. No temporary restraining
\norder, preliminary or permanent injunction or other order issued by any court of
\ncompetent jurisdiction or other legal restraint or prohibition preventing the
\nconsummation of the Mergers or any of the other transactions contemplated hereby
\nshall be in effect.<\/p>\n
(f) Blue Sky Laws. EOP shall have received all state securities
\nor “blue sky” permits and other authorizations necessary to issue the EOP Common
\nShares, EOP Preferred Shares and EOP OP Units issuable in the Mergers.<\/p>\n
6.2 Conditions to Obligations of EOP and EOP Partnership. The
\nobligations of EOP and EOP Partnership to effect the Mergers and to consummate
\nthe other transactions contemplated to occur on the Closing Date are further
\nsubject to the following conditions, any one or more of which may be waived by
\nEOP:<\/p>\n
(a) Representations and Warranties. The representations and
\nwarranties of Beacon and Beacon Partnership set forth in this Agreement shall be
\ntrue and correct in all material respects as of the date of this Agreement and
\nas of the Closing Date, as though made on and as of the Closing Date, except to
\nthe extent such representation or warranty is expressly limited by its terms to
\nanother date, and EOP shall have received a certificate (which certificate may
\nbe qualified by Knowledge to the same extent as the representations and
\nwarranties of Beacon and Beacon Partnership contained herein are so qualified)
\nsigned on behalf of Beacon by the chief executive officer or the chief financial
\nofficer of Beacon, in such capacity, to such effect.<\/p>\n
(b) Performance of Obligations of Beacon and Beacon Partnership.
\nBeacon and Beacon Partnership shall have performed in all material respects all
\nobligations required to be performed by them under this Agreement at or prior to
\nthe Effective Time, and EOP shall have received a certificate signed on behalf
\nof Beacon by the chief executive officer or the chief operating officer of
\nBeacon, in such capacity, to such effect.<\/p>\n
(c) Material Adverse Change. Since the date of this Agreement,
\nthere shall have been no Beacon Material Adverse Change and EOP shall have
\nreceived a certificate of the chief executive officer or chief operating officer
\nof Beacon, in such capacity, certifying to such effect.<\/p>\n
(d) Tax Opinions Relating to REIT Status and Partnership Status.
\nEOP shall have received (i) an opinion of Goodwin, Procter & Hoar LLP or <\/p>\n
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\n 68<\/p>\n
other counsel to Beacon reasonably satisfactory to EOP, dated as of the Closing
\nDate, to the effect that, commencing with its taxable year ended December 31,
\n1994, (x) Beacon was organized and has operated in conformity with the
\nrequirements for qualification as a REIT under the Code, and (y) Beacon
\nPartnership has been during and since 1994, and continues to be, treated for
\nfederal income tax purposes as a partnership and not as a corporation or
\nassociation taxable as a corporation (with customary exceptions, assumptions and
\nqualifications and based upon customary representations) and (ii) an opinion of
\nHogan & Hartson L.L.P. or other counsel to EOP reasonably satisfactory to
\nBeacon, dated as of the Closing Date, to the effect that, commencing with its
\ntaxable year ending December 31, 1997, EOP was organized and has operated in
\nconformity with the requirements for qualification as a REIT under the Code and
\nthat, after giving effect to the Merger, EOP’s proposed method of operation will
\nenable it to continue to meet the requirements for qualification and taxation as
\na REIT under the Code (with customary exceptions, assumptions and qualifications
\nand based upon customary representations and based upon and subject to the
\nopinion of counsel to Beacon described in clause (i) above).<\/p>\n
(e) Tax Opinion Relating to Merger. EOP shall have received an
\nopinion dated the Closing Date from Hogan & Hartson L.L.P., Sullivan & Cromwell
\nor other counsel reasonably satisfactory to EOP, based upon customary
\ncertificates and letters, which letters and certificates are to be in a form to
\nbe agreed upon by the parties and dated the Closing Date, to the effect that the
\nMerger will qualify as a reorganization under the provisions of Section 368(a)
\nof the Code.<\/p>\n
(f) Consents. All consents and waivers (including, without
\nlimitation, waivers of rights of first refusal) from third parties necessary in
\nconnection with the consummation of the transactions contemplated by this
\nAgreement shall have been obtained, other than such consents and waivers from
\nthird parties, which, if not obtained, would not result, individually or in the
\naggregate, in an EOP Material Adverse Effect or a Beacon Material Adverse
\nEffect.<\/p>\n
(g) “Comfort” Letter. EOP and EOP Partnership shall have
\nreceived a “comfort” letter from Coopers & Lybrand, LLP, as described in Section
\n5.1(b).<\/p>\n
(h) Shares of the Management, Design and Construction Companies.
\nAll of the voting shares of the Management Company, the Design Company and the
\nConstruction Company (other than any such shares owned by Beacon Partnership)
\nshall have been transferred to EOP Management Corp., or its designees or
\nassigns, in accordance with the Stock Purchase Agreements.<\/p>\n
6.3 Conditions to Obligations of Beacon and Beacon Partnership. The
\nobligations of Beacon and Beacon Partnership to effect the Mergers and to
\nconsummate the other transactions contemplated to occur on the Closing Date is<\/p>\n
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\n 69<\/p>\n
further subject to the following conditions, any one or more of which may be
\nwaived by Beacon:<\/p>\n
(a) Representations and Warranties. The representations and
\nwarranties of EOP and EOP Partnership set forth in this Agreement shall be true
\nand correct in all material respects as of the date of this Agreement and as of
\nthe Closing Date, as though made on and as of the Closing Date, except to the
\nextent the representation or warranty is expressly limited by its terms to
\nanother date, and Beacon shall have received a certificate (which certificate
\nmay be qualified by Knowledge to the same extent as such representations and
\nwarranties of EOP and EOP Partnership contained herein are so qualified) signed
\non behalf of EOP by the chief executive officer or the chief financial officer
\nof such party, in such capacity, to such effect.<\/p>\n
(b) Performance of Obligations of EOP and EOP Partnership. EOP
\nand EOP Partnership shall have performed in all material respects all
\nobligations required to be performed by it under this Agreement at or prior to
\nthe Effective Time, and Beacon shall have received a certificate of EOP signed
\non behalf of EOP by the chief executive officer or the chief financial officer
\nof EOP, in such capacity, to such effect.<\/p>\n
(c) Material Adverse Change. Since the date of this Agreement,
\nthere shall have been no EOP Material Adverse Change and Beacon shall have
\nreceived a certificate of the chief executive officer or chief financial officer
\nof EOP, in such capacity, certifying to such effect.<\/p>\n
(d) Tax Opinions Relating to REIT Status and Partnership Status.
\nBeacon shall have received an opinion of Hogan & Hartson L.L.P. or other counsel
\nto EOP, reasonably satisfactory to Beacon, dated as of the Closing Date, that,
\ncommencing with its taxable year ended December 31, 1997, (i) EOP was organized
\nand has operated in conformity with the requirements for qualification as a REIT
\nunder the Code and (ii) EOP Operating Partnership has been during and since
\n1997, and continues to be, treated for federal income tax purposes as a
\npartnership and not as a corporation or association taxable as a corporation
\n(with customary exceptions, assumptions and qualifications and based upon
\ncustomary representations).<\/p>\n
(e) Tax Opinion Relating to Merger. Beacon shall have received
\nan opinion dated the Closing Date from Goodwin, Procter & Hoar LLP, Sullivan & Cromwell or other counsel reasonably satisfactory to Beacon, based upon
\ncustomary certificates and letters, which letters and certificates are to be in
\na form to be agreed upon by the parties and dated the Closing Date, to the
\neffect that the Merger will qualify as a reorganization under the provisions of
\nSection 368(a) of the Code.<\/p>\n
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\n 70<\/p>\n
(f) Consents. All consents and waivers (including, without
\nlimitation, waivers or rights of first refusal) from third parties necessary in
\nconnection with the consummation of the transactions contemplated hereby shall
\nhave been obtained, other than such consents and waivers from third parties,
\nwhich, if not obtained, would not result, individually or in the aggregate, in
\nan EOP Material Adverse Effect or a Beacon Material Adverse Effect.<\/p>\n
(g) “Comfort” Letter. Beacon and Beacon Partnership shall have
\nreceived a “comfort” letter from Ernst & Young LLP, as described in Section
\n5.1(b).<\/p>\n
ARTICLE 7<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
7.1 Termination. This Agreement may be terminated at any time prior
\nto the filing of the Articles of Merger with the Department, whether before or
\nafter either of the Shareholder Approvals or the Beacon Unitholder Approvals are
\nobtained:<\/p>\n
(a) by mutual written consent duly authorized by the Board of
\nTrustees of EOP and the Board of Directors of Beacon;<\/p>\n
(b) by EOP, upon a breach of any representation, warranty,
\ncovenant, obligation or agreement on the part of Beacon or Beacon Partnership
\nset forth in this Agreement, or if any representation or warranty of Beacon or
\nBeacon Partnership shall become untrue, in either case such that the conditions
\nset forth in Section 6.2(a) or Section 6.2(b), as the case may be, would be
\nincapable of being satisfied by April 15, 1998 (or as otherwise extended);<\/p>\n
(c) by Beacon, upon a breach of any representation, warranty,
\ncovenant obligation or agreement on the part of EOP or EOP Partnership set forth
\nin this Agreement, or if any representation or warranty of EOP or EOP
\nPartnership shall become untrue, in either case such that the conditions set
\nforth in Section 6.3(a) or Section 6.3(b), as the case may be, would be
\nincapable of being satisfied by April 15, 1998 (or as otherwise extended);<\/p>\n
(d) by either EOP or Beacon, if any judgment, injunction, order,
\ndecree or action by any Governmental Entity of competent authority preventing
\nthe consummation of the Merger shall have become final and non-appealable;<\/p>\n
(e) by either EOP or Beacon, if the Merger shall not have been
\nconsummated before April 15, 1998; provided, however, that a party may not
\nterminate pursuant to this clause (e) if the terminating party shall have
\nbreached <\/p>\n
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\n 71<\/p>\n
in any material respect its obligations under this Agreement in any manner that
\nshall have proximately contributed to the occurrence of the failure referred to
\nin this clause;<\/p>\n
(f) by either EOP or Beacon (unless Beacon or Beacon Partnership
\nis in breach of its obligations under Section 5.1) if, upon a vote at a duly
\nheld Beacon Shareholders Meeting or any adjournment thereof, the Beacon
\nShareholder Approvals shall not have been obtained as contemplated by Section
\n5.1 (excluding Section 5.1(d));<\/p>\n
(g) by either Beacon or EOP (unless EOP or EOP Partnership is in
\nbreach of its obligations under Section 5.1 (excluding Section 5.1(d)) if, upon
\na vote at a duly held EOP Shareholders Meeting or any adjournment thereof, the
\nEOP Shareholder Approvals shall not have been obtained as contemplated by
\nSection 5.1 (excluding Section 5.1(d));<\/p>\n
(h) by Beacon, if prior to the Beacon Shareholders Meeting, the
\nBoard of Directors of Beacon shall have withdrawn or modified in any manner
\nadverse to EOP its approval or recommendation of the Merger or this Agreement in
\nconnection with, or approved or recommended, a Superior Acquisition Proposal;
\nprovided, however, that such termination shall not be effective prior to the
\npayment of the Break-Up Fee to the extent required by Section 7.2;<\/p>\n
(i) by EOP, if (A) prior to the Beacon Shareholders Meeting, the
\nBoard of Directors of Beacon shall have withdrawn or modified in any manner
\nadverse to EOP its approval or recommendation of the Merger or this Agreement in
\nconnection with, or approved or recommended, any Superior Acquisition Proposal,
\n(B) Beacon shall have entered into any agreement for any Acquisition Proposal,
\nor (C) the Board of Directors of Beacon or any committee thereof shall have
\nresolved to do any of the foregoing; and<\/p>\n
(j) by Beacon at any time during the seven (7) trading day
\nperiod following the Pricing Period (as defined below) if the Average Closing
\nPrice (as defined below) shall be less than Twenty-Seven Dollars and Thirty-Nine
\nCents ($27.39). If Beacon elects to exercise its termination right pursuant to
\nthis Section 7.1(j), it shall give written notice to EOP (provided that such
\nnotice of election to terminate may be withdrawn at any time within the
\naforementioned seven (7) trading day period). For purposes of this Section
\n7.1(j), (i) the term “Average Closing Price” means the average of the closing
\nprices of EOP Common Stock, on the New York Stock Exchange for all trading days
\nduring the Pricing Period, and (ii) “Pricing Period” means the period of twenty
\n(20) consecutive trading days commencing on the twenty-seventh (27th) trading
\nday prior to the date of the Beacon Shareholders Meeting.<\/p>\n
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\n 72<\/p>\n
7.2 Certain Fees and Expenses. If this Agreement shall be terminated
\n(i) pursuant to Section 7.1(h) or 7.1(i), then Beacon and Beacon Partnership
\nthereupon shall pay to EOP Partnership (provided that Beacon was not entitled to
\nterminate this Agreement pursuant to Section 7.1(c) at the time of such
\ntermination) a fee equal to the Break-Up Fee (as defined below), and (ii)
\npursuant to Section 7.1(b) (subject to the proviso in the final sentence of
\nSection 2.8) or 7.1(f), then Beacon and Beacon Partnership shall pay to EOP
\nPartnership (provided that Beacon was not entitled to terminate this Agreement
\npursuant to Section 7.1(c) at the time of such termination) an amount equal to
\nthe Break-Up Expenses (as defined below). If this Agreement shall be terminated
\npursuant to Section 7.1(c) or 7.1(g), then EOP and EOP Partnership shall pay
\nBeacon Partnership (provided that EOP was not entitled to terminate this
\nAgreement pursuant to Section 7.1(b) at the time of such termination) an amount
\nequal to the Break-Up Expenses. If this Agreement shall be terminated pursuant
\nto Section 7.1(b), 7.1(d) (if primarily resulting from any action or inaction of
\nBeacon or any Beacon Subsidiary), 7.1(e), 7.1(f) or 7.1(j) and prior to the time
\nof such termination an Acquisition Proposal has been received by Beacon or any
\nBeacon Subsidiary, and either prior to the termination of this Agreement or
\nwithin twelve (12) months thereafter, Beacon or any Beacon Subsidiary enters
\ninto any written Acquisition Proposal which is subsequently consummated (whether
\nor not any such Acquisition Proposal is the same Acquisition Proposal which had
\nbeen received at the time of the termination of this Agreement), then Beacon and
\nBeacon Partnership shall pay the Break-Up Fee to EOP Partnership. If prior to
\nthe Beacon Shareholders Meeting the Board of Directors of Beacon shall have
\nwithdrawn or modified in any manner adverse to EOP its approval or
\nrecommendation of the Merger or this Agreement and, within twelve (12) months
\nafter termination of this Agreement, Beacon or Beacon Partnership enters into
\nany written Acquisition Proposal which is subsequently consummated (whether or
\nnot any Acquisition Proposal had been received prior to the time of the
\ntermination of this Agreement), then Beacon and Beacon Partnership shall pay the
\nBreak-Up Fee to EOP Partnership. If this Agreement shall be terminated pursuant
\nto Section 7.1(j) and within six (6) months thereafter, Beacon or any Beacon
\nSubsidiary enters into any written Acquisition Proposal which is subsequently
\nconsummated (whether or not any Acquisition Proposal had been received at the
\ntime of the termination of this Agreement), then Beacon and Beacon Partnership
\nshall pay the Break-Up Fee to EOP Partnership. The payment of the Break-Up Fee
\nshall be compensation for the loss suffered by EOP and EOP Partnership as a
\nresult of the failure of the Mergers to be consummated (including, without
\nlimitation, opportunity costs and out-of-pocket costs and expenses) and to avoid
\nthe difficulty of determining damages under the circumstances. The Break-Up Fee
\nshall be paid by Beacon and Beacon Partnership to EOP Partnership, or the
\nBreak-Up Expenses shall be paid by Beacon and Beacon Partnership to EOP
\nPartnership or EOP Partnership to Beacon Partnership (as applicable), in
\nimmediately available funds within fifteen (15) calendar days after the date the
\nevent giving rise to the obligation to make such payment occurred (except as<\/p>\n
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\n 73<\/p>\n
otherwise provided in Section 7.1(h)). As used in this Agreement, “Break-Up Fee”
\nshall be an amount equal to the lesser of (i) $75,000,000 less Break-Up Expenses
\npaid or payable under this Section 7.2 (the “Base Amount”) and (ii) the sum of
\n(A) the maximum amount that can be paid to EOP Partnership without causing EOP
\nto fail to meet the requirements of Sections 856(c)(2) and (3) of the Code
\ndetermined as if the payment of such amount did not constitute income described
\nin Sections 856(c)(2)(A)-(H) and 856(c)(3)(A)-(I) of the Code (“Qualifying
\nIncome”), as determined by independent accountants to EOP, and (B) in the event
\nEOP receives a letter from outside counsel (the “Break-Up Fee Tax Opinion”)
\nindicating that EOP has received a ruling from the IRS holding that EOP
\nPartnership’s receipt of the Base Amount would either constitute Qualifying
\nIncome or would be excluded from gross income of EOP within the meaning of
\nSections 856(c)(2) and (3) of the Code (the “REIT Requirements”) or that the
\nreceipt by EOP Partnership of the remaining balance of the Base Amount following
\nthe receipt of and pursuant to such ruling would not be deemed constructively
\nreceived prior thereto, the Base Amount less the amount payable under clause (A)
\nabove. Beacon’s and Beacon Partnership’s obligation to pay any unpaid portion of
\nthe Break-Up Fee shall terminate three years from the date of this Agreement. In
\nthe event that EOP Partnership is not able to receive the full Base Amount,
\nBeacon and Beacon Partnership shall place the unpaid amount in escrow and shall
\nnot release any portion thereof to EOP Partnership unless and until Beacon
\nreceives either one of the following: (i) a letter from EOP’s independent
\naccountants indicating the maximum amount that can be paid at that time to EOP
\nPartnership without causing EOP to fail to meet the REIT Requirements or (ii) a
\nBreak-Up Fee Tax Opinion, in either of which events Beacon and Beacon
\nPartnership shall pay to EOP Partnership the lesser of the unpaid Base Amount or
\nthe maximum amount stated in the letter referred to in (i) above. The “Break-Up
\nExpenses” payable to EOP Partnership or Beacon Partnership, as the case may be
\n(the “Recipient”), shall be an amount equal to the lesser of (i) $10,000,000,
\n(ii) the Recipient’s out-of-pocket expenses incurred in connection with this
\nAgreement and the transactions contemplated hereby (including, without
\nlimitation, all attorneys’, accountants’ and investment bankers’ fees and
\nexpenses) or (iii) the sum of (A) the maximum amount that can be paid to the
\nRecipient without causing EOP or Beacon, as the case may be, to fail to meet the
\nrequirements of Sections 856(c)(2) and (3) of the Code determined as if the
\npayment of such amount did not constitute Qualifying Income, as determined by
\nindependent accountants to the EOP or Beacon, as the case may be, and (B) in the
\nevent EOP or Beacon, as the case may be, receives a Break-Up Fee Tax Opinion
\nindicating that it has received a ruling from the IRS holding that the
\nRecipient’s receipt of the Break-Up Expenses would either constitute Qualifying
\nIncome or would be excluded from gross income of EOP or Beacon, as the case may
\nbe, within the meaning of the REIT Requirements or that receipt by the Recipient
\nof the remaining balance of the Break-Up Expenses following the receipt of and
\npursuant to such ruling would not be deemed constructively received prior
\nthereto, the Break-Up Expenses less the amount payable under clause (A) above.
\nThe obligation of EOP and EOP <\/p>\n
-65-
\n 74<\/p>\n
Partnership or Beacon and Beacon Partnership, as applicable (“Payor”), to pay
\nany unpaid portion of the Break-Up Expenses shall terminate three years from the
\ndate of this Agreement. In the event that the Recipient is not able to receive
\nthe full Break-Up Expenses, the Payor shall place the unpaid amount in escrow
\nand shall not release any portion thereof to the Recipient unless and until the
\nPayor receives either one of the following: (i) a letter from the independent
\naccountants of EOP or Beacon, as the case may be, indicating the maximum amount
\nthat can be paid at that time to the Recipient without causing it to fail to
\nmeet the REIT Requirements or (ii) a Break-Up Expense Tax Opinion, in either of
\nwhich events the Payor shall pay to the Recipient the lesser of the unpaid
\nBreak-Up Expenses or the maximum amount stated in the letter referred to in (i)
\nabove.<\/p>\n
7.3 Effect of Termination. In the event of termination of this
\nAgreement by either Beacon or EOP as provided in Section 7.1, this Agreement
\nshall forthwith become void and have no effect, without any liability or
\nobligation on the part of EOP, EOP Partnership, Beacon or Beacon Partnership,
\nother than the last sentence of Section 5.2, Section 7.2, this Section 7.3 and
\nArticle 8, and except to the extent that such termination results from a
\nmaterial breach by any party of any of its representations, warranties,
\ncovenants or agreements set forth in this Agreement.<\/p>\n
7.4 Amendment. This Agreement may be amended by the parties in
\nwriting by action of the respective Board of Trustees or Board of Directors of
\nEOP and Beacon at any time before or after any Shareholder Approvals are
\nobtained and prior to the filing of the Articles of Merger with the Department;
\nprovided, however, that, after the Shareholder Approvals and Partner Approvals
\nare obtained, no such amendment, modification or supplement shall be made which
\nby law requires the further approval of shareholders without obtaining such
\nfurther approval. The parties agree to amend this Agreement in the manner
\nprovided in the immediately preceding sentence to the extent required to (a)
\ncontinue the status of each party as a REIT or (b) preserve the Merger as a
\ntax-free reorganization under Section 368 of the Code.<\/p>\n
7.5 Extension; Waiver. At any time prior to the Effective Time, the
\nparties may (a) extend the time for the performance of any of the obligations or
\nother acts of the other party, (b) waive any inaccuracies in the representations
\nand warranties of the other party contained in this Agreement or in any document
\ndelivered pursuant to this Agreement or (c) subject to the proviso of Section
\n7.4, waive compliance with any of the agreements or conditions of the other
\nparty contained in this Agreement. Any agreement on the part of a party to any
\nsuch extension or waiver shall be valid only if set forth in an instrument in
\nwriting signed on behalf of such party. The failure of any party to this
\nAgreement to assert any of its rights under this Agreement or otherwise shall
\nnot constitute a waiver of those rights.<\/p>\n
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\n 75<\/p>\n
ARTICLE 8<\/p>\n
GENERAL PROVISIONS<\/p>\n
8.1 Nonsurvival of Representations and Warranties. None of the
\nrepresentations and warranties in this Agreement or in any instrument delivered
\npursuant to this Agreement confirming the representations and warranties in this
\nAgreement shall survive the Effective Time. This Section 8.1 shall not limit any
\ncovenant or agreement of the parties which by its terms contemplates performance
\nafter the Effective Time.<\/p>\n
8.2 Notices. All notices, requests, claims, demands and other
\ncommunications under this Agreement shall be in writing and shall be delivered
\npersonally, sent by overnight courier (providing proof of delivery) to the
\nparties or sent by telecopy (providing confirmation of transmission) at the
\nfollowing addresses or telecopy numbers (or at such other address or telecopy
\nnumber for a party as shall be specified by like notice):<\/p>\n
(a) if to EOP, to:<\/p>\n
Equity Office Properties Trust
\n Two North Riverside Plaza, 22nd Floor
\n Chicago, Illinois 60606
\n Attention: Timothy H. Callahan, President
\n Stanley M. Stevens, Chief Counsel
\n Fax No.: (312) 559-5021<\/p>\n
with a copy to:<\/p>\n
Hogan & Hartson L.L.P.
\n 555 Thirteenth Street, N.W.
\n Washington, D.C. 20004-1109
\n Attention: J. Warren Gorrell, Jr., Esq.
\n James E. Showen, Esq.
\n Fax No.: (202) 637-5910<\/p>\n
(b) if to Beacon, to:<\/p>\n
Beacon Properties Corporation
\n 50 Rowes Wharf
\n Boston, Massachusetts 02110
\n Attention: President
\n Fax.: (617) 251-0151<\/p>\n
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\n 76<\/p>\n
with a copy to:<\/p>\n
Goodwin Procter & Hoar LLP
\n Exchange Place
\n Boston, Massachusetts 02109
\n Attention: Gilbert G. Menna, P.C.
\n Kathryn I. Murtagh, Esq.
\n Fax No.: (617) 523-1231<\/p>\n
All notices shall be deemed given only when actually received.<\/p>\n
8.3 Interpretation. When a reference is made in this Agreement to a
\nSection, such reference shall be to a Section of this Agreement unless otherwise
\nindicated. The table of contents and headings contained in this Agreement are
\nfor reference purposes only and shall not affect in any way the meaning or
\ninterpretation of this Agreement. Whenever the words “include”, “includes” or
\n“including” are used in this Agreement, they shall be deemed to be followed by
\nthe words “without limitation.”<\/p>\n
8.4 Counterparts. This Agreement may be executed in one or more
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each of
\nthe parties and delivered to the other party.<\/p>\n
8.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
\nthe Beacon Disclosure Letter, the EOP Disclosure Letter, the Confidentiality
\nAgreement, the Voting Agreements and the other agreements entered into in
\nconnection with the Mergers (a) constitute the entire agreement and supersede
\nall prior agreements and understandings, both written and oral (including,
\nwithout limitation, in connection with the form of this Agreement executed on
\nSeptember 15, 1997) between the parties with respect to the subject matter of
\nthis Agreement and (b) except as provided in Section 1.7, 1.11, 5.8, 5.9, 5.15,
\n5.16, and 8.10 (“Third Party Provisions”), are not intended to confer upon any
\nperson other than the parties hereto any rights or remedies. The Third Party
\nProvisions may be enforced by the beneficiaries thereof or on behalf of the
\nbeneficiaries thereof by the directors of Beacon who had been members of the
\nBoard of Directors of Beacon prior to the Effective Time.<\/p>\n
8.6 Governing Law. THE PARTNERSHIP MERGER SHALL BE GOVERNED BY, AND
\nCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
\nTHE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF
\nLAWS THEREOF. EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEDING SENTENCE, THIS
\nAGREEMENT SHALL BE GOVERNED BY,<\/p>\n
-68-
\n 77<\/p>\n
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, REGARDLESS
\nOF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT
\nOF LAWS THEREOF.<\/p>\n
8.7 Assignment. Neither this Agreement nor any of the rights,
\ninterests or obligations under this Agreement shall be assigned or delegated, in
\nwhole or in part, by operation of law or otherwise by any of the parties without
\nthe prior written consent of the other parties. Subject to the preceding
\nsentence, this Agreement will be binding upon, inure to the benefit of, and be
\nenforceable by, the parties and their respective successors and assigns.<\/p>\n
8.8 Enforcement. The parties agree that irreparable damage would
\noccur in the event that any of the provisions of this Agreement were not
\nperformed in accordance with their specific terms or were otherwise breached. It
\nis accordingly agreed that the parties shall be entitled to an injunction or
\ninjunctions to prevent breaches of this Agreement and to enforce specifically
\nthe terms and provisions of this Agreement in any federal court located in
\nMaryland or in any state court located in Maryland this being in addition to any
\nother remedy to which they are entitled at law or in equity. In addition, each
\nof the parties hereto (a) consents to submit itself (without making such
\nsubmission exclusive) to the personal jurisdiction of any federal court located
\nin Maryland or any state court located in Maryland in the event any dispute
\narises out of this Agreement or any of the transactions contemplated by this
\nAgreement and (b) agrees that it will not attempt to deny or defeat such
\npersonal jurisdiction by motion or other request for leave from any such court.<\/p>\n
8.9 Severability. Any term or provision of this Agreement which is
\ninvalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
\nineffective to the extent of such invalidity or unenforceability without
\nrendering invalid or unenforceable the remaining terms and provisions of this
\nAgreement or affecting the validity or enforceability of any of the terms or
\nprovisions of this Agreement in any other jurisdiction. If any provision of this
\nAgreement is so broad as to be unenforceable, the provision shall be interpreted
\nto be only so broad as is enforceable.<\/p>\n
8.10 EOP Extension Option. Notwithstanding anything to the contrary
\nin Sections 5.1(c), 7.1(b) or 7.1(e), in the event of any preliminary, temporary
\nor other nonfinal judgment, injunction, order, decree or action by any court
\n(each an “Action”) preventing, delaying or otherwise materially adversely
\naffecting the consummation of either of the Mergers primarily resulting from any
\naction or inaction of Beacon, EOP shall have the right, in its sole and absolute
\ndiscretion, by giving written notice to Beacon, to preclude Beacon (for one or
\nmore periods aggregating not more than six (6) months) from terminating this
\nAgreement pursuant to Section 7.1(e) or 7.1(h) (unless, in the case of Section
\n7.1(h), the Board <\/p>\n
-69-
\n 78<\/p>\n
of Directors of Beacon shall have acted in the circumstances described in
\nSection 7.1(h) without basing its decision in any way, directly or indirectly,
\non the Action), for the period of such prevention, delay or material adverse
\neffect plus fifteen (15) days, in which event each of the dates referred to in
\nSections 5.1(c), 7.1(b) or 7.1(e) shall be extended for each such period.<\/p>\n
8.11 Exculpation. This Agreement shall not impose any personal
\nliability on any shareholder, trustee, officer, employee or agent of EOP, and
\nall Persons shall look solely to the property of EOP for the payment of any
\nclaim hereunder or for the performance of this Agreement.<\/p>\n
-70-
\n 79<\/p>\n
IN WITNESS WHEREOF, EOP, EOP Partnership, Beacon and Beacon
\nPartnership have caused this Agreement to be signed by their respective officers
\n(or general partners) thereunto duly authorized all as of the date first written
\nabove.<\/p>\n
EQUITY OFFICE PROPERTIES TRUST<\/p>\n
By: \/s\/ Timothy H. Callahan
\n ——————————
\n Name: Timothy H. Callahan
\n ——————————
\n Title: President and CEO
\n —————————— <\/p>\n
EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
By: Equity Office Properties
\n Trust, its managing general
\n partner<\/p>\n
By: \/s\/ Timothy H. Callahan
\n ——————————
\n Name: Timothy H. Callahan
\n ——————————
\n Title: President and CEO
\n —————————— <\/p>\n
BEACON PROPERTIES CORPORATION<\/p>\n
By: \/s\/ Lionel P. Fortin
\n ——————————
\n Name: Lionel P. Fortin
\n ——————————
\n Title: Executive Vice President
\n —————————— <\/p>\n
BEACON PROPERTIES, L.P.<\/p>\n
By: Beacon Properties Corporation,
\n its sole general partner<\/p>\n
By: \/s\/ Lionel P. Fortin
\n ——————————
\n Name: Lionel P. Fortin
\n ——————————
\n Title: Executive Vice President
\n —————————— <\/p>\n
-71-<\/p>\n
80<\/p>\n
SCHEDULE 5.16<\/p>\n
PRINCIPAL TERMS OF TAX PROTECTION AGREEMENTS<\/p>\n
ONE POST OFFICE SQUARE<\/p>\n
– One Post Office Square Beneficiaries: Harvey I. Steinberg, Alan M.
\n Leventhal, Edwin N. Sidman, Paula L. Sidman, Mark S. Leventhal, Robert J.
\n Perriello, Mitchell Beacon L.P. and its partners (Douglas Mitchell and
\n Georgette Mitchell), Laurence Selkovitz, and The Leventhal Family L.P. and
\n its partners (who include Norman B. Leventhal and Muriel Leventhal).<\/p>\n
– Lockout Period: Ten Years from Closing Date. One Post Office Square
\n Beneficiaries have the unilateral right at any time during such 10-year
\n period to extend the term for another 10 years upon the payment of
\n $125,000 in cash to EOP Partnership.<\/p>\n
– Sale Restrictions: EOP Partnership would agree not to undertake, or
\n consent to or otherwise permit, any sale or other disposition, directly or
\n indirectly, of part or all of the One Post Office Square Property (which
\n term also includes any property received in exchange for the One Post
\n Office Square Property in a permitted like-kind exchange or other
\n non-recognition transaction described below) if such disposition would
\n result in the recognition and allocation of any gain for federal income
\n tax purposes to a One Post Office Square Beneficiary pursuant to Section
\n 704(c) of the Code.<\/p>\n
– Such agreement shall not prohibit (i) a transfer
\n of the One Post Office Square Property in a like-kind exchange
\n pursuant to Section 1031 of the Code or in any other
\n transaction that pursuant to a non-recognition provision in
\n the Code that does not result in the current recognition of
\n any gain (including depreciation recapture) to a Post Office
\n Square Beneficiary; and (ii) sales or transfers of building
\n components necessary, in EOP Partnership’s reasonable
\n judgment, for the ongoing operation of the One Post Office
\n Square Property.<\/p>\n
– Debt Restrictions: EOP Partnership would agree to cause the One Post
\n Office Square Partnership to maintain the existing non-recourse
\n indebtedness, in the approximate amount of $94 million (the “Existing Post
\n Office Square Debt”), in place during the term of Lockout Period, as it
\n may be extended as set forth above, subject to reduction for required
\n amortization payments in accordance with the terms of the Existing Post
\n Office Square Debt. At the maturity of the Existing Post Office Square
\n Debt, EOP Partnership shall use commercially reasonable efforts to cause
\n the One Post Office Square Partnership to obtain replacement financing
\n that qualifies as a “nonrecourse liability” for purposes of Treas. Reg.
\n Section 1.752-1(a)(2) in an amount equal to the then outstanding balance<\/p>\n
1
\n 81<\/p>\n
of the Existing Post Office Square Debt (or, if less, the maximum amount
\n of such debt then available to the Post Office Square Partnership on
\n commercially reasonable terms), with such replacement financing to provide
\n for the least amount of principal amortization as is available on
\n commercially reasonable terms.<\/p>\n
– EOP Partnership would have the right to refinance the Existing
\n Post Office Square Debt (or any replacement debt obtained
\n therefor) at any time, subject to the same terms and
\n conditions set forth in the preceding paragraph and subject to
\n the additional condition that, unless such refinancing occurs
\n within one year of the maturity of the Existing Post Office
\n Square Debt (or any replacement debt previously obtained
\n therefor), the principal amount of the new replacement
\n financing cannot be less than the outstanding balance of the
\n Existing Post Office Square Debt (or any replacement debt
\n previously obtained therefor) at the time of the refinancing.<\/p>\n
– Notwithstanding the above, in the event EOP Partnership does
\n not maintain sufficient debt to avoid recognition of any gain
\n for federal income tax purposes to a One Post Office Square
\n Beneficiary, EOP Partnership shall pay to each such One Post
\n Office Square Beneficiary in cash an amount equal to the
\n aggregate federal, Massachusetts and local income taxes that
\n are payable by such One Post Office Square Beneficiary with
\n respect to such gain, plus a full gross up for federal,
\n Massachusetts and local taxes payable by such Beneficiary as
\n the result of the Receipt of such payment.<\/p>\n
– Optional Termination: EOP Partnership would have the right to
\n terminate all of these restrictions at any time by paying to each of
\n the One Post Office Square Beneficiaries in cash an amount equal to the
\n aggregate federal, Massachusetts and local income taxes that would have
\n been payable by such One Post Office Square Beneficiary if the One Post
\n Office Square Property were sold for the “Section 704(c)” value of the
\n Property on the Closing Date, plus a full gross up for the federal,
\n Massachusetts, and local taxes payable by such Beneficiary as the
\n result of the Receipt of such payment.<\/p>\n
CENTER PLAZA<\/p>\n
– Center Plaza Beneficiaries: Beneficiaries of Partnership Holding
\n Trust (“PHT”), who are RLCPA Corp., Scollay Corp., Robert Beal, trustee
\n of Robert Leventhal Trust dated 6\/3\/66, Muriel B. Leventhal, Alan M.
\n Leventhal, Mark S. Leventhal, and Paula L. Sidman.<\/p>\n
2
\n 82<\/p>\n
– Lockout Period: Ten Years from Closing Date. Center Plaza Beneficiaries
\n have the unilateral right at any time during such 10-year period to extend
\n the term for another 10 years upon the payment of $125,000 in cash to EOP
\n Partnership.<\/p>\n
– Sale and Option Exercise Restrictions: EOP Partnership would agree (i)
\n not to exercise, or cause or permit any Subsidiary to exercise the option
\n to purchase PHT’s interest in Center Plaza Associates and (ii) not to
\n undertake, or consent to or otherwise permit, any sale or other
\n disposition, directly or indirectly, of part or all of the Center Plaza
\n Property (which term also includes any property received in exchange for
\n the Center Plaza Property in a permitted like-kind exchange or other
\n non-recognition transaction described below) if such disposition would
\n result in the recognition and allocation of any gain for federal income
\n tax purposes to a Center Plaza Beneficiaries pursuant to Section 704(c) of
\n the Code.<\/p>\n
– Such agreement shall not prohibit (i) a transfer of the Center
\n Plaza Property in a like-kind exchange pursuant to Section
\n 1031 of the Code or in any other transaction that pursuant to
\n a non-recognition provision in the Code that does not result
\n in the current recognition of any gain (including depreciation
\n recapture) to a Center Plaza Beneficiary; and (ii) sales or
\n transfers of building components necessary, in EOP
\n Partnership’s reasonable judgment, for the ongoing operation
\n of the Center Plaza Property.<\/p>\n
– Debt Restrictions: In the event that EOP Partnership or any Subsidiary
\n of EOP Partnership exercises the option (as such option may be bifurcated
\n prior to the Closing Date) to purchase the Center Plaza Associates note
\n from Note Holding Trust, EOP Partnership would agree (i) to cause the
\n Center Plaza Associates to put into place and thereafter maintain not less
\n than $43 million of third party non-recourse debt secured by the Center
\n Plaza Property (the “Replacement Financing”), and (ii) to permit PHT
\n and\/or the beneficiaries of PHT to guarantee up to $43 million of the
\n Replacement Financing, in such amount as they may select, on a “bottom
\n guarantee” basis (that is, with liability against the guarantors only if,
\n after full recourse to all of the assets securing such debt, the lender
\n has recovered less than the guaranteed amount). At the maturity of any
\n such Replacement Financing, EOP Partnership shall use commercially
\n reasonable efforts to cause Center Plaza Associates to obtain new
\n replacement financing, on the terms set forth above, in an equal to the
\n outstanding balance of the Replacement Financing (or, if less, the maximum
\n amount of such debt then available to the Center Plaza Associates on
\n commercially reasonable terms), with such replacement financing to provide
\n for the least amount of principal amortization as is available on
\n commercially reasonable terms.<\/p>\n
– EOP Partnership would have the right to refinance
\n the Replacement Financing (or any replacement debt previously<\/p>\n
3
\n 83<\/p>\n
obtained therefor) at any time, subject to the same terms and
\n conditions set forth in the preceding paragraph and subject to
\n the additional condition that, unless such refinancing occurs
\n within one year of the maturity of the Replacement Financing
\n (or any replacement debt previously obtained therefor), the
\n principal amount of the new replacement financing cannot be
\n less than the outstanding guarantees by PHT (or the PHT
\n beneficiaries) at the time of the refinancing.<\/p>\n
– Notwithstanding the above, in the event EOP Partnership does
\n not maintain sufficient debt to avoid recognition of any gain
\n for federal income tax purposes to a Center Plaza Beneficiary,
\n EOP Partnership shall pay to each such Center Plaza
\n Beneficiary in cash an amount equal to the aggregate federal,
\n Massachusetts and local income taxes that are payable by such
\n Center Plaza Beneficiary with respect to such gain, plus a
\n full gross up for the federal, Massachusetts and local taxes
\n payable by such Beneficiary as the result of the Receipt of
\n such payment.<\/p>\n
– Optional Cash Termination: EOP Partnership would have the right to
\n terminate all of these restrictions at any time by paying to each of the
\n Center Plaza Beneficiaries in cash an amount equal to the aggregate
\n federal, Massachusetts and local income taxes that would have been payable
\n by such Center Plaza Beneficiary if the Center Plaza Property were sold
\n for the “Section 704(c)” value of the Property on the Closing Date (which
\n will be the outstanding balance of the debt with respect to the Property
\n on that date), plus a full gross up for the federal, Massachusetts, and
\n local taxes payable by such Beneficiary as the result of the receipt of
\n such payment.<\/p>\n
– Optional Property Termination: EOP Partnership would have the right,
\n exercisable at any time after June 1, 1999, to terminate all of these
\n restrictions at any time by offering to redeem the interest of PHT in
\n Center Plaza Associates for property designated by the PHT Beneficiaries.<\/p>\n
In the event that EOP Partnership shall deliver notice of the exercise of
\n its optional property termination right, the PHT Beneficiaries thereafter
\n would have the option, by written notice to EOP Partnership within 15 days
\n after the notice from EOP Partnership, to require that Center Plaza
\n Associates redeem their partnership interests with property to be selected
\n by the PHT Beneficiaries (in their sole discretion) and acquired by Center
\n Plaza Associates (the “PHT Designated Replacement Property”), subject to
\n the following conditions. If the PHT Beneficiaries fail to designate the
\n replacement property within the specified 15 day period or thereafter fail
\n to complete the redemption of their interests as contemplated herein
\n within 90 days for any reason other than a <\/p>\n
4
\n 84<\/p>\n
change in law, as described below, all restrictions with respect to Center
\n Plaza Associates shall terminate.<\/p>\n
The PHT Designated Replacement Property shall have such value and be subject to
\nsuch debt as shall be designated by the PHT Beneficiaries, provided that
\nneither Center Plaza nor EOP Partnership shall be required in any event to
\nexpend more than $25,000 in excess of the amount of the designated debt in
\nconnection with the acquisition and delivery of the PHT Designated Replacement
\nProperty to the PHT Beneficiaries. PHT and the PHT Beneficiaries shall provide
\nany credit support necessary to obtain the level of debt that they request with
\nrespect to the PHT Designated Replacement Property.<\/p>\n
– The rights of EOP Partnership to cause the optional property
\n termination shall cease if PHT shall deliver to EOP
\n Partnership an opinion of nationally recognized tax counsel to
\n the effect that, as a result of a change in federal income tax
\n law occurring after the date of this Agreement, the delivery
\n of the designated replacement property (in a form other than
\n cash or marketable securities) subject to debt in an amount
\n equal to the negative capital accounts of PHT and the PHT
\n Beneficiaries that is fully recourse to the PHT Beneficiaries,
\n would not be effective to permit PHT Beneficiaries to defer
\n the recognition of gain that otherwise would result if they
\n were to dispose of their interests in Center Plaza Associates
\n in a fully taxable transaction.<\/p>\n
– Tax Returns: Unless otherwise agreed to by PHT, EOP Partnership shall
\n cause Coopers & Lybrand to prepare the partnership tax returns for tax
\n years through and including the year in which an optional property
\n termination occurs.<\/p>\n
ROWES WHARF LIMITED PARTNERSHIP<\/p>\n
– Rowes Wharf Beneficiaries: Norman B. Leventhal, Edwin N. Sidman, Alan
\n M. Leventhal, Mark S. Leventhal, Robert J. Perriello, Paula L. Sidman,
\n James Becker, Richard Kelleher, Judith A. Fortin, Estate of Edward J.
\n McCormack, RWLP Corp., and Mitchell Beacon L.P. and its partners (Douglas
\n Mitchell and Georgette Mitchell).<\/p>\n
– Consent to Transaction: Notwithstanding any of the restrictions in the
\n Agreement to the contrary, EOP Partnership consents to a redemption, prior
\n to the Closing Date, by the Rowes Wharf Limited Partnership, of the
\n interests of the Rowes Wharf Beneficiaries in Rowes Wharf Limited
\n Partnership for property to be selected by the Rowes Wharf Beneficiaries
\n (excluding the interest in Rowes Wharf Associates) and approved by EOP
\n Partnership (such approval not to be unreasonably withhold), subject to
\n the condition that the Rowes Wharf <\/p>\n
5
\n 85<\/p>\n
Beneficiaries assume (and hold the Rowes Wharf Limited Partnership
\n harmless for) debt in an amount equal to the cost of such property to
\n Rowes Wharf Limited Partnership, which debt shall be incurred by Rowes
\n Wharf Partnership for the purpose of acquiring such property and
\n delivering it to the Rowes Wharf Beneficiaries.<\/p>\n
– Tax Returns: Unless otherwise agreed to by the Rowes Wharf Beneficiaries,
\n EOP Partnership shall cause Coopers & Lybrand to prepare the partnership
\n tax returns for tax years 1997 and 1998 for Rowes Wharf Associates and
\n Rowes Wharf Limited Partnership.<\/p>\n
NORMAN LEVENTHAL LOAN GUARANTEE<\/p>\n
– Beneficiary: Norman Leventhal<\/p>\n
– Term: Lifetime of Norman Leventhal<\/p>\n
– Option to Guarantee Debt: EOP Partnership shall make available to Norman
\n Leventhal, commencing on the closing date and continuing for his lifetime,
\n the opportunity to guaranty $1.5 million of outstanding indebtedness of
\n EOP Partnership.<\/p>\n
6
\n 86<\/p>\n
EXHIBIT A<\/p>\n
ARTICLES OF MERGER<\/p>\n
MERGING<\/p>\n
BEACON PROPERTIES CORPORATION
\n (A MARYLAND CORPORATION)<\/p>\n
INTO<\/p>\n
EQUITY OFFICE PROPERTIES TRUST
\n (A MARYLAND REAL ESTATE INVESTMENT TRUST)<\/p>\n
FIRST: Equity Office Properties Trust, a Maryland real estate
\ninvestment trust (“EOP” or the “Surviving Trust”), and Beacon Properties
\nCorporation (“Beacon”), a Maryland corporation, each agree that Beacon will
\nmerge with and into EOP (the “Merger”) pursuant to the Agreement and Plan of
\nMerger between EOP, EOP Operating Limited Partnership, a Delaware limited
\npartnership (“EOP Partnership”), Beacon and Beacon Properties, L.P., a Delaware
\nlimited partnership (“Beacon Partnership”), dated as of September 15, 1997 (the
\n“Merger Agreement”).<\/p>\n
SECOND: EOP will survive the Merger and will continue under the name
\nEquity Office Properties Trust.<\/p>\n
THIRD: The principal office of Beacon in Maryland is located in
\n________ County. Beacon does not own any interest in land in the State of
\nMaryland. The principal office of the Surviving Trust in Maryland is located
\nin ________ County. EOP does not own any interest in land in the State of
\nMaryland.<\/p>\n
FOURTH: The terms and conditions of the Merger as set forth in these
\nArticles of Merger were advised, authorized and approved by Beacon, in the
\nmanner and by the vote required by its charter and the laws of Maryland, as
\nfollows:<\/p>\n
(a) At a meeting of the Board of Directors held on
\n September 14, 1997, the Board of Directors adopted a
\n resolution approving the Merger and recommending that the
\n proposed Merger be submitted for consideration by the
\n stockholders. <\/p>\n
(b) At a special meeting of the stockholders held on
\n _______ __, 1998, the stockholders duly approved the Merger by
\n the<\/p>\n
87
\n affirmative vote of the holders of two-thirds (2\/3) of the shares
\n of common stock, par value $.01 per share, entitled to vote
\n thereon.<\/p>\n
FIFTH: The terms and conditions of the Merger as set forth in these
\nArticles of Merger were advised, authorized and approved by EOP, in the manner
\nand by the vote required by its declaration of trust and the laws of
\nMaryland, as follows:<\/p>\n
(a) At a meeting of the Board of Trustees held on September __, 1997,
\n the Board of Trustees adopted a resolution approving the Merger
\n and recommending that the proposed Merger be submitted for
\n consideration by the shareholders.<\/p>\n
(b) At a special meeting of the shareholders held on _______ __, 1998,
\n the shareholders duly approved the Merger by the affirmative vote
\n of the holders of a majority of the common shares of beneficial
\n interest, $.01 par value per share, entitled to vote thereon.<\/p>\n
SIXTH: The declaration of trust of the Surviving Trust will be amended
\nas set forth in the Articles Supplementary filed concurrently herewith.<\/p>\n
SEVENTH: The total number of shares of all classes which each party to
\nthese Articles of Merger has authority to issue and the number of each class
\nare as follows:<\/p>\n
(a) EOP.<\/p>\n
The total number of shares of beneficial interest of all classes
\n which EOP has authority to issue is 850,000,000, consisting of:
\n 750,000,000 common shares of beneficial interest, $.01 par value
\n per share; and 100,000,000 preferred shares of beneficial
\n interest, $.01 par value per share. The aggregate par value of
\n the shares of beneficial interest of all classes of EOP is
\n $8,500,000.<\/p>\n
(b) Beacon.<\/p>\n
The total number of shares of stock of all classes which Beacon
\n has authority to issue is 175,000,000, consisting of: 100,000,000
\n shares of common stock, par value $.01 per share; 25,000,000
\n shares of preferred stock, par value $.01 per share; and
\n 50,000,000 shares of excess common stock, par value $.01 per
\n share. The aggregate par value of the shares of all classes of
\n stock of Beacon is $1,750,000.<\/p>\n
– 2 –<\/p>\n
88<\/p>\n
EIGHTH: The manner and basis of converting or exchanging issued and
\noutstanding stock of Beacon into different shares of beneficial interest in the
\nSurviving Trust or other consideration and the treatment of any issued and
\noutstanding stock of the merging entities not to be so converted or exchanged
\nis as follows:<\/p>\n
(a) Effective Time. The Merger shall become effective for state
\n law purposes upon the later of: (i) the issuance of a certificate
\n of merger by the State Department of Assessments and Taxation of
\n Maryland in accordance with the Maryland General Corporation Law
\n (“MGCL”) and (ii) at __________ _.m., ____________ __, 1998, which
\n effective time is immediately prior to the effective time of the
\n merger of Beacon Partnership into EOP Partnership pursuant to the
\n Merger Agreement (the time the Merger becomes effective being the
\n “Effective Time”).<\/p>\n
(b) Effects of the Merger. The Merger shall have the effects set
\n forth in the MGCL.<\/p>\n
(c) Conversion of Common Stock. Upon the Effective Time, each
\n issued and outstanding share of common stock of Beacon (“Beacon
\n Common Share”) shall be converted into the right to receive from
\n EOP 1.4063 fully paid and nonassessable common shares of
\n beneficial interest of EOP, $.01 par value per share (“EOP Common
\n Shares”). As of the Effective Time, all Beacon Common Shares
\n shall no longer be outstanding and shall automatically be canceled
\n and retired and all rights with respect thereto shall cease to
\n exist, and each holder of a certificate representing any Beacon
\n Common Share shall cease to have any rights with respect thereto,
\n except the right to receive, upon surrender of such certificate in
\n accordance with the applicable provision of the Merger Agreement,
\n certificates representing the shares of EOP Common Shares required
\n to be delivered under this paragraph (c) and any dividends or
\n other distributions with a record date prior to the Effective Time
\n which may have been declared or made by Beacon on such Beacon
\n Common Shares which remain unpaid at the Effective Time.<\/p>\n
(d) Conversion of Preferred Stock. Upon the Effective Time,
\n each issued and outstanding share of 8.98% Series A Cumulative
\n Redeemable preferred stock, liquidation preference $25.00 per
\n share, of Beacon (“Beacon Preferred Share”) shall be converted
\n into the right to receive from EOP one 8.98% Series A Cumulative
\n Redeemable preferred share of beneficial interest,<\/p>\n
– 3 –<\/p>\n
89<\/p>\n
liquidation preference $25.00 per share, of EOP (“EOP Preferred
\n Share”). As of the Effective Time, all Beacon Preferred Shares
\n shall no longer be outstanding and shall automatically be canceled
\n and retired and all rights with respect thereto shall cease to
\n exist, and each holder of a certificate representing any Beacon
\n Preferred Share shall cease to have any rights with respect
\n thereto, except the right to receive, upon surrender of such
\n certificate in accordance with the applicable provision of the
\n Merger Agreement, certificates representing the EOP Preferred
\n Shares required to be delivered under this paragraph (d) and any
\n dividends or other distributions with a record date prior to the
\n Effective Time which may have been declared or made by Beacon on
\n such Beacon Preferred Shares which remain unpaid at the Effective
\n Time.<\/p>\n
(e) No Fractional Shares.<\/p>\n
(i) No certificates or scrip representing
\n fractional EOP Common Shares shall be issued upon the
\n surrender for exchange of certificates, and such
\n fractional share interests will not entitle the owner
\n thereof to vote, to receive dividends or to any other
\n rights of a shareholder of EOP.<\/p>\n
(ii) No fractional EOP Common Shares shall
\n be issued pursuant to the Merger. In lieu of the
\n issuance of any fractional EOP Common Shares pursuant to
\n the Merger, each holder of Beacon Common Shares upon
\n surrender of a certificate for exchange shall be paid an
\n amount in cash (without interest), rounded to the
\n nearest cent, determined by multiplying (i) the average
\n closing price of one EOP Common Share on the New York
\n Stock Exchange on the five trading days immediately
\n preceding the closing date by (ii) the fractional amount
\n of one EOP Common Share which such holder would
\n otherwise be entitled to receive.<\/p>\n
(f) EOP Common Shares-. Upon the Effective Time, each common
\n share of beneficial interest of EOP outstanding immediately
\n prior to the Effective Time shall remain outstanding and
\n shall represent one validly issued, fully paid and
\n nonassessable common share of beneficial interest of EOP.<\/p>\n
NINTH: Each undersigned Trustee of EOP, representing a majority of the
\nTrustees of EOP, and the undersigned President of Beacon acknowledges these<\/p>\n
– 4 –<\/p>\n
90
\nArticles of Merger to be the act of the respective party on whose behalf he
\nhas signed, and further, as to all matters or facts required to be verified
\nunder oath, each of __________, President of EOP and ______________, President
\nof Beacon acknowledges, that to the best of his knowledge, information and
\nbelief, these matters and facts relating to the entity on whose behalf he has
\nsigned are true in all material respects and that this statement is made under
\nthe penalties for perjury.<\/p>\n
– 5 –<\/p>\n
91<\/p>\n
IN WITNESS WHEREOF, these Articles of Merger have been duly executed by
\nthe parties hereto as of the ___ day of ________________, 1997.<\/p>\n
EOP<\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
92<\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title: <\/p>\n
By:
\n ———————————
\n Name:
\n Title:
\nAttest: <\/p>\n
Name:
\n ———————————
\nTitle: Secretary <\/p>\n
BEACON<\/p>\n
By:
\n ———————————
\n Name:
\n Title:<\/p>\n
Attest: <\/p>\n
Name:
\n ———————————
\nTitle: Secretary <\/p>\n
93
\nEXHIBIT B
\n CERTIFICATE OF MERGER
\n OF
\n BEACON PROPERTIES, L.P.
\n INTO
\n EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
The undersigned limited partnership, organized and existing under and by
\nvirtue of the Delaware Revised Uniform Limited Partnership Act, does hereby
\ncertify:<\/p>\n
FIRST: That the name and jurisdiction of formation of each of the
\nconstituent limited partnerships which is to merge is as follows:<\/p>\n
\n\n Name State of Formation
\n —- ——————
\n
\n EOP Operating Limited Partnership Delaware
\n Beacon Properties, L.P. Delaware
\n<\/c><\/s><\/caption>\n<\/table>\n SECOND: That an Agreement and Plan of Merger dated as of September 15,
\n1997 (the “Merger Agreement”) by and among Equity Office Properties Trust, a
\nMaryland real estate investment trust (“EOP”), EOP Operating Limited
\nPartnership, Beacon Properties Corporation, a Maryland corporation (“Beacon”),
\nand Beacon Properties, L.P. has been approved and executed by each of the
\nconstituent limited partnerships in accordance with the requirements of Section
\n17-211(b) of the Delaware Revised Uniform Limited Partnership Act.<\/p>\n
THIRD: That the name of the surviving limited partnership is EOP
\nOperating Limited Partnership (the “Surviving Limited Partnership”).<\/p>\n
FOURTH: That the effective time of the merger is upon the filing of this
\nCertificate of Merger with the Secretary of State of the State of Delaware,
\nwhich effective time is immediately after the effective time of the merger of
\nBeacon into EOP pursuant to the Merger Agreement.<\/p>\n
FIFTH: That the executed Merger Agreement is on file at a place of
\nbusiness of the Surviving Limited Partnership. The address of such place of
\nbusiness is Two North Riverside, 22nd Floor, Chicago, Illinois 60606.<\/p>\n
SIXTH: That a copy of the Merger Agreement will be furnished by the
\nSurviving Limited Partnership, on request and without cost, to any partner of
\nthe constituent limited partnerships.<\/p>\n
94<\/p>\n
IN WITNESS WHEREOF, Equity Office Properties Trust, the Managing General
\nPartner of EOP Operating Limited Partnership has caused this Certificate of
\nMerger to be signed by a duly authorized officer, this ________ day of
\n_______________ 1997.<\/p>\n
EOP OPERATING LIMITED
\n PARTNERSHIP<\/p>\n
By: Equity Office Properties Trust,
\n Its Managing General Partner <\/p>\n
By:
\n ——————————-
\n Name:
\n —————————–
\n Title:
\n —————————- <\/p>\n
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