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As filed with the Securities and Exchange Commission on November 22, 1999
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BOSTON PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-2473675
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
800 Boylston Street
Boston, Massachusetts 02199
(617) 236-3300
(Address, including zip code, and telephone number, including area code of
Registrant's principal executive offices)
Mortimer B. Zuckerman, Chairman
Edward H. Linde, President and Chief Executive Officer
BOSTON PROPERTIES, INC.
800 Boylston Street
Boston Massachusetts 02199
(617) 236-3300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
GILBERT G. MENNA, P.C.
ETTORE A. SANTUCCI, P.C.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.___
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. X
---
If this form is used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.___
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.___
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box.___
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum Amount of
Title of Shares Being Amount to be Offering Price Per Aggregate Offering Registration Fee
Registered Registered(2) Share(3) Price(3)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01
per share(1) 933,085 $28.4375 $26,534,604.69 $7,376.62
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</TABLE>
(1) This Registration Statement also relates to the rights to purchase
shares of Series E Junior Participating Cumulative Preferred Stock of
the Registrant which are attached to all shares of Common Stock issued,
pursuant to the terms of the Registrant's Shareholder Rights Agreement
dated June 16, 1997. Until the occurrence of certain prescribed events,
the rights are not exercisable, are evidenced by the certificates for
the Common Stock and will be transferred with and only with such Common
Stock. Because no separate consideration is paid for the rights, the
registration fee therefor is included in the fee for the Common Stock.
(2) Plus such additional number of shares as may be required in the event of
a stock dividend, reverse stock split, split-up recapitalization or
other similar event.
(3) Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(c) based on the average of the high and low sales
prices on the New York Stock Exchange on November 17, 1999.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion. Dated November 22, 1999.
Prospectus
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933,085 Shares of Common Stock
Boston Properties, Inc.
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The selling stockholders identified in this prospectus, and any of their
pledgees, donees, transferees or other successors in interest, may offer to sell
up to an aggregate of 933,085 shares of common stock of Boston Properties, Inc.
The selling stockholders may only offer the common stock for sale if they
exercise their rights to tender their units of Boston Properties Limited
Partnership, our operating partnership, for cash, and we exercise our right to
issue common stock to them instead of cash. We are filing the registration
statement of which this prospectus is a part at this time to fulfill a
contractual obligation to do so, which we undertook at the time of the original
issuance of these units. We will not receive any of the proceeds from the sale
of the common stock by the selling stockholders but, in fulfillment of our
contractual obligations, we are bearing the expenses of registration.
Our common stock is listed on the New York Stock Exchange under the
symbol "BXP."
See "Risk Factors" beginning on page 4 for certain factors you should
consider before you invest in our common stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. It is illegal for any person to tell
you otherwise.
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The date of this prospectus is [____].
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PROSPECTUS SUMMARY
This summary only highlights the more detailed information appearing
elsewhere in this prospectus or incorporated herein by reference. As this is a
summary, it may not contain all information that is important to you. You should
read this entire prospectus carefully before deciding whether to invest in our
common stock.
Unless the context otherwise requires, all references to "we," "us" or
"our company" in this prospectus refer collectively to Boston Properties, Inc.,
a Delaware corporation, and its subsidiaries, including Boston Properties
Limited Partnership, a Delaware limited partnership, and their respective
predecessor entities for the applicable periods, considered as a single
enterprise.
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About Boston Properties, Inc.
Boston Properties, Inc. is a real estate investment trust or "REIT." We
are one of the largest owners and developers of office properties in the United
States, concentrated in the Northeast Corridor from Virginia to Greater Boston
and in Greater San Francisco. We conduct substantially all our business through
Boston Properties Limited Partnership. As of September 30, 1999 we owned 132
properties, aggregating more than 35.3 million square feet. Our properties
consist of 119 office properties, consisting of 87 Class A office buildings,
including ten under development and 32 properties that support both office and
technical uses, nine industrial properties, three hotels and one parking garage.
We are the sole general partner and the owner of approximately 67.3% of the
economic interests in Boston Properties Limited Partnership. Our principal
executive office is located at 800 Boylston Street, Boston, Massachusetts 02199;
telephone number (617) 236-3300. Our common stock is listed on the New York
Stock Exchange under the symbol "BXP."
Additional information regarding Boston Properties, including our
audited financial statements and descriptions of Boston Properties, is contained
in the documents incorporated by reference in this prospectus. See "Where You
Can Find More Information" on page 17.
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The Offering
This prospectus relates to up to 933,085 shares of our common stock that
may be offered for sale by the selling stockholders if, and to the extent that,
they tender their common units of Boston Properties Limited Partnership for
cash, and we exercise our right to issue common stock to them instead of cash.
Boston Properties Limited Partnership originally issued these units to Reservoir
Place Limited Partnership Associates in consideration for interests in
properties contributed to Boston Properties Limited Partnership, in connection
with our acquisition of Reservoir Place, an office property located in Waltham,
Massachusetts. In connection with this acquisition, we entered into a
registration rights and lock-up agreement with Reservoir Place Limited
Partnership Associates. The originally issued units together with the associated
rights under registration rights and lock-up agreement were transferred by
Reservoir Place Limited Partnership Associates to each of the selling
stockholders. Under the terms of that agreement, the selling stockholders could
not tender their units for redemption until after November 13, 1999. We are
registering the common stock covered by this prospectus in order to fulfill our
contractual obligations under the registration rights and lock-up agreement.
Registration of the common stock does not necessarily mean that all or any
portion of such stock will be offered for sale by the selling stockholders.
Pursuant to the Second Amended and Restated Agreement of Limited
Partnership of Boston Properties Limited Partnership, as amended, unitholders
may tender their common units of Boston Properties Limited Partnership for cash
equal to the value of an equivalent number of shares of our common stock. In
lieu of delivering cash, however, we may, at our option, choose to acquire any
units so tendered by issuing common stock in exchange for the units. The common
stock will be exchanged for units on a one-for-one basis. This one-for-one
exchange ratio may be adjusted to prevent dilution.
We have agreed to bear the expenses of the registration of the common
stock under federal and state securities laws, but we will not receive any
proceeds from the sale of any common stock offered under this prospectus.
Tax Status of Boston Properties, Inc
We have elected to qualify as a real estate investment trust under
Sections 856 through 860 of the Internal Revenue Code. As long as we qualify for
taxation as a real estate investment trust, we generally will not be subject to
federal income tax on that portion of our ordinary income and capital gains that
is currently distributed to our stockholders. Even if we qualify for taxation as
a real estate investment trust, we may be subject to state and local taxes on
our income and property and to federal income and excise taxes on our
undistributed income.
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RISK FACTORS
Before you purchase shares of our common stock from the selling
stockholders you should be aware that there are various risks in making such an
investment, including those described below. You should consider carefully these
risk factors together with all of the information included or incorporated by
reference in this prospectus before you decide to purchase shares of our common
stock. This section includes or refers to certain forward-looking statements.
You should refer to the explanation of the qualifications and limitations on
such forward-looking statements discussed on page 18.
We may be unable to manage effectively our rapid growth and expansion into new
markets.
We have grown rapidly since our initial public offering in June 1997 and
have entered or significantly expanded our real estate holdings in new markets.
If we do not effectively manage our rapid growth, we may not be able to make
expected distributions to our securityholders.
Our performance and value are subject to risks associated with our real estate
assets.
Our economic performance and the value of our real estate assets, and
consequently the value of your investment, are subject to the risk that if our
office, industrial, and hotel properties do not generate revenues sufficient to
meet our operating expenses, including debt service and capital expenditures,
our cash flow and ability to pay dividends to you will be adversely affected.
The following factors, among others, may adversely affect the revenues generated
by our office, industrial, and hotel properties:
. downturns in the national and local economic climate;
. competition from other office, industrial, hotel and other
commercial buildings;
. local real estate market conditions, such as oversupply or
reduction in demand for office, industrial, hotel or other
commercial space;
. vacancies or inability to rent spaces on favorable terms; and
. increased operating costs, including insurance premiums,
utilities, and real estate taxes.
Significant expenditures associated with each investment, such as debt
service payments, real estate taxes, insurance and maintenance costs are
generally not reduced when circumstances cause a reduction in revenues from a
property.
We face risks associated with specific local market conditions.
Our current properties are located primarily in seven regional markets:
greater Boston; midtown Manhattan; greater Washington, D.C.; greater San
Francisco; Princeton/East Brunswick, New Jersey; Richmond, Virginia; and
Baltimore, Maryland. Local economic conditions in these markets may affect the
ability of our tenants to make lease payments. The economic climate in each of
these local markets may depend on a limited number of industries, and therefore
a downturn in one of these industry sectors could adversely affect our
performance in the affected market.
Our investment in property development may be more costly than anticipated.
We intend to continue to develop and substantially renovate office,
industrial and hotel properties. Our development and construction activities may
be exposed to the following risks:
. we may be unable to proceed with the development of properties
because we cannot obtain financing with favorable terms;
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. we may incur construction costs for a development project which
exceed our original estimates due to increased materials, labor
or other costs, which could make completion of the project
uneconomical because we may not be able to increase rents to
compensate for the increase in construction costs;
. we may be unable to obtain, or face delays in obtaining,
required zoning, land-use, building, occupancy, and other
governmental permits and authorizations, which could result in
increased costs and could require us to abandon our activities
entirely with respect to a project;
. we may abandon development opportunities after we begin to
explore them and as a result we may fail to recover expenses
already incurred;
. we may expend funds on and devote management's time to projects
which we do not complete;
. we may be unable to complete construction and leasing of a
property on schedule, resulting in increased debt service
expense and construction or renovation costs;
. we may lease developed properties at below expected rental
rates; and
. occupancy rates and rents at newly completed properties may
fluctuate depending on a number of factors, including market and
economic conditions, and may result in our investment not being
profitable.
Our use of joint ventures may limit our flexibility with jointly owned
investments.
We intend to develop properties in joint ventures with other persons or
entities when circumstances warrant the use of this structure. The use of a
joint venture vehicle creates a risk of a dispute with our joint venturers and a
risk that we will have to acquire a joint venturer's interest in a development
for a price at which or at a time when we would otherwise not purchase such
interest. Our joint venture partners may have different objectives from us
regarding the appropriate timing and pricing of any sale or refinancing of
properties.
We face risks associated with property acquisitions.
Since our initial public offering, we have made large acquisitions of
properties and portfolios of properties. We intend to continue to acquire
properties and portfolios of properties, including large portfolios that could
continue to significantly increase our size and alter our capital structure. Our
acquisition activities and their success may be exposed to the following risks:
. we may be unable to acquire a desired property because of
competition from other well capitalized real estate investors,
including both publicly traded real estate investment trusts and
institutional investment funds;
. even if we enter into an acquisition agreement for a property,
it is usually subject to customary conditions to closing,
including completion of due diligence investigations to our
satisfaction;
. even if we are able to acquire a desired property, competition
from other real estate investors may significantly increase the
purchase price;
. we may be unable to finance acquisitions on favorable terms;
. acquired properties may fail to perform as we expected in
analyzing our investments;
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. our estimates of the costs of repositioning or redeveloping
acquired properties may be inaccurate;
. acquired properties may be located in new markets, where we may
face risks associated with a lack of market knowledge or
understanding of the local economy, lack of business
relationships in the area and unfamiliarity with local
governmental and permitting procedures; and
. we may be unable to quickly and efficiently integrate new
acquisitions, particularly acquisitions of portfolios of
properties, into our existing operations, and as a result our
results of operations and financial condition could be adversely
affected.
We may acquire properties subject to liabilities and without any
recourse, or with only limited recourse, with respect to unknown liabilities. As
a result, if liability were asserted against us based upon those properties, we
might have to pay substantial sums to settle it, which could adversely affect
our cash flow. Unknown liabilities with respect to properties acquired might
include:
. liabilities for clean-up of undisclosed environmental
contamination;
. claims by tenants, vendors or other persons dealing with the
former owners of the properties;
. liabilities incurred in the ordinary course of business; and
. claims for indemnification by general partners, directors,
officers and others indemnified by the former owners of the
properties.
Potential inability to renew leases or re-lease space.
We derive most of our income from rent received from our tenants. If a
tenant experiences a downturn in its business, it may be unable to make timely
rental payments. Also, when our tenants decide not to renew their leases, we may
not be able to relet the space. Even if tenants decide to renew, the terms of
renewals or new leases, including the cost of required renovations or
concessions to tenants, may be less favorable than current lease terms. As a
result, our cash flow could decrease and our ability to pay dividends to you
could be adversely affected.
We face potential adverse effects from a tenant's bankruptcy.
The bankruptcy or insolvency of a major tenant may adversely affect the
income produced by our properties. Although we have not experienced material
losses from tenant bankruptcies in the past, our tenants could file for
bankruptcy protection in the future. We cannot evict a tenant solely because of
its bankruptcy. On the other hand, a bankruptcy court might authorize the tenant
to reject and terminate its lease with us. In such case, our claim against the
bankrupt tenant for unpaid, future rent would be subject to a statutory cap that
might be substantially less than the remaining rent actually owed under the
lease, and, even so, our claim for unpaid rent would likely not be paid in full.
This shortfall could adversely affect our cash flow and results from operations.
We may have difficulty selling our properties limiting our flexibility.
Large and high quality office, industrial and hotel properties like the
ones that we own can be hard to sell, especially if local market conditions are
poor. This may limit our ability to change our portfolio promptly in response to
changes in economic or other conditions. In addition, federal tax laws limit our
ability to sell properties that we have owned for fewer than four years, and
this may affect our ability to sell properties without adversely affecting
returns to our stockholders. These restrictions reduce our ability to respond to
changes in the performance of our investments and could adversely affect our
financial condition and results of operations.
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Our properties face significant competition.
We face significant competition from developers, owners and operators of
office, industrial and other commercial real estate. Substantially all of our
properties face competition from similar properties in the same area. Such
competition may effect our ability to attract and retain tenants and may reduce
the rents we are able to charge. These competing properties may have vacancy
rates higher than our properties, which may result in their owners being willing
to make space available at lower prices than the space in our properties.
Because we own hotel properties, we face general risks associated with such
properties.
We own three hotel properties. We lease these hotel properties to ZL
Hotel LLC, in which Mortimer B. Zuckerman, chairman of our board of directors,
and Edward H. Linde, our president and chief executive officer, are the sole
member-managers and have a 9.8% economic interest; two unaffiliated public
charities have a 90.2% economic interest in ZL Hotel LLC. Marriott
International, Inc. manages these hotel properties under the Marriott(R) name
pursuant to a management agreement with ZL Hotel LLC. ZL Hotel LLC pays us a
percentage of the gross receipts that the hotel properties receive. Because the
lease payments we receive are based on a participation in the gross receipts of
the hotels, if the hotels do not generate sufficient receipts, our cash flow
would be decreased, which could reduce the amount of cash available for
distribution to our securityholders. The following factors, among others, are
common to the hotel industry, and may reduce the receipts generated by our hotel
properties:
. our hotel properties compete for guests with other hotels, a
number of which have greater marketing and financial resources
than our hotel-operating business partners;
. if there is an increase in operating costs resulting from
inflation and other factors, our hotel-operating business
partners may not be able to offset such increase by increasing
room rates;
. our hotel properties are subject to the fluctuating and seasonal
demands of business travelers and tourism; and
. our hotel properties are subject to general and local economic
conditions that may affect demand for travel in general.
Compliance or failure to comply with the Americans with Disabilities Act and
other similar laws could result in substantial costs.
The Americans with Disabilities Act generally requires that public
buildings, including office buildings and hotels, be made accessible to disabled
persons. Noncompliance could result in imposition of fines by the federal
government or the award of damages to private litigants. If, pursuant to the
Americans with Disabilities Act, we are required to make substantial alterations
and capital expenditures in one or more of our properties, including the removal
of access barriers, it could adversely affect our financial condition and
results of operations, as well as the amount of cash available for distribution
to our securityholders.
We may also incur significant costs complying with other regulations.
Our properties are subject to various federal, state and local regulatory
requirements, such as state and local fire and life safety requirements. If we
fail to comply with these requirements, we could incur fines or private damage
awards. We believe that our properties are currently in material compliance with
all of these regulatory requirements. However, we do not know whether existing
requirements will change or whether compliance with future requirements will
require significant unanticipated expenditures that will affect our cash flow
and results from operations.
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Some potential losses are not covered by insurance.
We carry comprehensive liability, fire, flood, extended coverage and
rental loss insurance, as applicable, on our properties. We believe our coverage
is of the type and amount customarily obtained for or by an owner of similar
properties. We believe all of our properties are adequately insured. However,
there are certain types of losses, such as from wars or catastrophic acts of
nature, for which we cannot obtain insurance or for which we cannot obtain
insurance at a reasonable cost. In the event of an uninsured loss or a loss in
excess of our insurance limits, we could lose both the revenues generated from
the affected property and the capital we have invested in the affected property.
We would, however, remain obligated to repay any mortgage indebtedness or other
obligations related to the property. Any such loss could materially and
adversely affect our business and financial condition and results of operations.
We carry earthquake insurance on our properties located in areas known
to be subject to earthquakes in an amount and subject to deductions which we
believe are commercially reasonable. However, the amount of our earthquake
insurance coverage may not be sufficient to cover losses from earthquakes. In
addition, we may discontinue earthquake insurance on some or all of our
properties in the future if the premiums exceed the value of the coverage
discounted for the risk of loss. If we experience a loss which is uninsured or
which exceeds policy limits, we could lose the capital invested in the damaged
properties as well as the anticipated future revenue from those properties.
Moreover, if the damaged properties are subject to recourse indebtedness, we
would continue to be liable for the indebtedness, even if the properties were
irreparable.
Potential liability for environmental contamination could result in substantial
costs.
Under federal, state and local environmental laws, we may be required to
investigate and clean up the effects of releases of hazardous or toxic
substances or petroleum products at our properties, regardless of our knowledge
or responsibility, simply because of our current or past ownership or operation
of the real estate. If unidentified environmental problems arise, we may have to
make substantial payments which could adversely affect our cash flow and our
ability to make distributions to our securityholders because:
. as owner or operator we may have to pay for property damage and
for investigation and clean-up costs incurred in connection with
the contamination;
. the law typically imposes clean-up responsibility and liability
regardless of whether the owner or operator knew of or caused
the contamination;
. even if more than one person may be responsible for the
contamination, each person who shares legal liability under the
environmental laws may be held responsible for all of the
clean-up costs; and
. governmental entities and third parties may sue the owner or
operator of a contaminated site for damages and costs.
These costs could be substantial and in extreme cases could exceed the
value of the contaminated property. The presence of hazardous or toxic
substances or petroleum products or the failure to properly remediate
contamination may materially and adversely affect our ability to borrow against,
sell or rent an affected property. In addition, applicable environmental laws
create liens on contaminated sites in favor of the government for damages and
costs it incurs in connection with a contamination.
Environmental laws also govern the presence, maintenance and removal of
asbestos. Such laws require that owners or operators of buildings containing
asbestos:
. properly manage and maintain the asbestos;
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. notify and train those who may come into contact with asbestos;
and
. undertake special precautions, including removal or other
abatement, if asbestos would be disturbed during renovation or
demolition of a building.
Such laws may impose fines and penalties on building owners or operators who
fail to comply with these requirements and may allow third parties to seek
recovery from owners or operators for personal injury associated with exposure
to asbestos fibers.
Some of our properties are located in urban and industrial areas where
fill or current or historic industrial uses of the areas have caused site
contamination. Independent environmental consultants have conducted Phase I
environmental site assessments at all of our properties. These assessments
included, at a minimum, a visual inspection of the properties and the
surrounding areas, an examination of current and historical uses of the
properties and the surrounding areas and a review of relevant state, federal and
historical documents. Where appropriate, on a property-by-property basis, these
consultants have conducted additional testing, including sampling for asbestos,
for lead in drinking water, for soil contamination where underground storage
tanks are or were located or where other past site usages create a potential
environmental problem, and for contamination in groundwater. Even though these
environmental assessments have been conducted, there is still the risk that:
. the environmental assessments and updates did not identify all
potential environmental liabilities;
. a prior owner created a material environmental condition that is
not known to us or the independent consultants preparing the
assessments;
. new environmental liabilities have developed since the
environmental assessments were conducted; and
. future uses or conditions such as changes in applicable
environmental laws and regulations could result in environmental
liability for us.
We face risks associated with the use of debt to fund acquisitions and
developments, including refinancing risk.
We are subject to the risks normally associated with debt financing,
including the risk that our cash flow will be insufficient to meet required
payments of principal and interest. We anticipate that only a small portion of
the principal of our debt will be repaid prior to maturity. Therefore, we are
likely to need to refinance at least a portion of our outstanding debt as it
matures. There is a risk that we may not be able to refinance existing debt or
that the terms of any refinancing will not be as favorable as the terms of the
existing debt. If principal payments due at maturity cannot be refinanced,
extended or repaid with proceeds from other sources, such as new equity capital,
our cash flow will not be sufficient to repay all maturing debt in years when
significant "balloon" payments come due.
Rising interest rates would increase interest costs.
We currently have, and may incur more, indebtedness that bears interest
at variable rates. Accordingly, if interest rates increase, so will our interest
costs, which would adversely affect our cash flow, our ability to service debt
and our ability to make distributions to our securityholders.
We have no corporate limitation on the amount of debt we can incur.
Our management and board of directors have discretion under our
certificate of incorporation and bylaws to increase the amount of our
outstanding debt. Our decisions with regard to the incurrence and maintenance of
debt are based on available investment opportunities for which capital is
required, the cost of debt in relation to such investment opportunities, whether
secured or unsecured debt is available,
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the effect of additional debt on existing financial ratios and the maturity of
the proposed new debt relative to maturities of existing debt. We could become
more highly leveraged, resulting in increased debt service costs that could
adversely affect our cash flow and the amount available for payment of
dividends. If we increase our debt we may also increase the risk we will be
unable to repay our debt.
Our financial covenants could adversely affect our financial condition.
The mortgages on our properties contain customary negative covenants
such as those that limit our ability, without the prior consent of the lender,
to further mortgage the applicable property or to discontinue insurance
coverage. In addition, our credit facilities contain certain customary
restrictions, requirements and other limitations on our ability to incur
indebtedness, including total debt to assets ratios, secured debt to total asset
ratios, debt service coverage ratios and minimum ratios of unencumbered assets
to unsecured debt which we must maintain. Our ability to borrow under our credit
facilities is subject to compliance with our financial and other covenants. We
rely on borrowings under our credit facilities to finance acquisitions and
development activities and for working capital, and if we are unable to borrow
under our credit facilities, or to refinance existing indebtedness our financial
condition and results of operations would likely be adversely impacted. If we
breach covenants in our debt agreements, the lender can declare a default and
require us to repay the debt immediately and, if the debt is secured, can
immediately take possession of the property securing the loan. In addition, our
credit facilities are cross-defaulted to our other indebtedness, which would
give the lenders under our credit facilities the right also to declare a default
and require immediate repayment.
Our degree of leverage could limit our ability to obtain additional financing or
affect the market price of our stock.
Debt to Market Capitalization Ratio is a measure of our total debt as a
percentage of the aggregate of our total debt plus the market value of our
outstanding common stock and interests in Boston Properties Limited Partnership.
Our Debt to Market Capitalization Ratio was approximately 50.5% as of September
30, 1999. To the extent that our board of directors uses our Debt to Market
Capitalization Ratio as a measure of appropriate leverage, the total amount of
our debt could increase as our stock price increases, even if we may not have a
corresponding increase in our ability to service or repay the debt. Our degree
of leverage could affect our ability to obtain additional financing for working
capital, capital expenditures, acquisitions, development or other general
corporate purposes. Our degree of leverage could also make us more vulnerable to
a downturn in business or the economy generally. There is a risk that changes in
our Debt to Market Capitalization Ratio, which is in part a function of our
stock price, or our ratio of indebtedness to other measures of asset value used
by financial analysts may have an adverse effect on the market price of our
stock.
Further issuances of stock may be dilutive to current stockholders.
The interests of our existing stockholders could be diluted if
additional equity securities are issued to finance future developments and
acquisitions instead of incurring additional debt. Our ability to execute our
business strategy depends on our access to an appropriate blend of debt
financing, including unsecured lines of credit and other forms of secured and
unsecured debt, and equity financing, including common and preferred equity.
Failure to qualify as a real estate investment trust would cause us to be taxed
as a corporation, which would substantially reduce funds available for payment
of dividends.
If we fail to qualify as a real estate investment trust for federal
income tax purposes, we will be taxed as a corporation. We believe that we are
organized and qualified as a real estate investment trust, and intend to operate
in a manner that will allow us to continue to qualify as a real estate
investment trust. However, we cannot assure you that we are qualified as such,
or that we will remain qualified as such in the future. This is because
qualification as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue Code as to which
there are only limited judicial and administrative interpretations, and involves
the determination of facts and circumstances not
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entirely within our control. In addition, future legislation, new regulations,
administrative interpretations or court decisions may significantly change the
tax laws or the application of the tax laws with respect to qualification as a
real estate investment trust for federal income tax purposes or the federal
income tax consequences of such qualification.
If we fail to qualify as a real estate investment trust we will face
serious tax consequences that will substantially reduce the funds available for
payment of dividends for each of the years involved because:
. we would not be allowed a deduction for dividends paid to
stockholders in computing our taxable income and would be
subject to federal income tax at regular corporate rates;
. we also could be subject to the federal alternative minimum tax
and possibly increased state and local taxes;
. unless we are entitled to relief under statutory provisions, we
could not elect to be subject to tax as a real estate investment
trust for four taxable years following the year during which we
were disqualified; and
. all dividends will be subject to tax as ordinary income to the
extent of our current and accumulated earnings and profits.
In addition, if we fail to qualify as a real estate investment trust, we
will no longer be required to pay dividends. As a result of all these factors,
our failure to qualify as a real estate investment trust could impair our
ability to expand our business and raise capital, and would adversely affect the
value of our common stock.
In order to maintain our real estate investment trust status, we may be forced
to borrow funds on a short-term basis during unfavorable market conditions.
In order to maintain our real estate investment trust status, we may
need to borrow funds on a short-term basis to meet the real estate investment
trust distribution requirements, even if the then prevailing market conditions
are not favorable for these borrowings. To qualify as a real estate investment
trust, we generally must distribute to our stockholders at least 95% of our net
taxable income each year, excluding capital gains. In addition, we will be
subject to a 4% nondeductible excise tax on the amount, if any, by which
dividends paid by us in any calendar year are less than the sum of 85% of our
ordinary income, 95% of our capital gain net income and 100% of our
undistributed income from prior years. We may need short-term debt to fund
required distributions as a result of differences in timing between the actual
receipt of income and the recognition of income for federal income tax purposes,
or the effect of non-deductible capital expenditures, the creation of reserves
or required debt or amortization payments.
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Limits on changes in control may discourage takeover attempts beneficial to
stockholders.
Provisions in our certificate of incorporation and bylaws, our
shareholder rights agreement and the agreement of limited partnership of Boston
Properties Limited Partnership, as well as provisions of the Internal Revenue
Code and Delaware corporate law, may:
. delay or prevent a change of control over us or a tender offer,
even if they might be beneficial to our stockholders; and
. limit our stockholders' opportunity to receive a potential
premium for their shares of common stock over then-prevailing
market prices.
Stock Ownership Limit
Primarily to facilitate maintenance of our qualification as a real
estate investment trust, our corporate charter generally prohibits ownership,
directly, indirectly or beneficially, by any single stockholder of more than
6.6% of the number of outstanding shares of any class or series of our equity
stock. We refer to this limitation as the "ownership limit." Our board of
directors may waive or modify the ownership limit with respect to one or more
persons if it is satisfied that ownership in excess of this limit will not
jeopardize our status as a real estate investment trust for federal income tax
purposes. In addition, under our corporate charter each of Messrs. Zuckerman and
Linde, along with their family and affiliates, as well as, in general, pension
plans and mutual funds, may actually and beneficially own up to 15% of the
number of outstanding shares of any class or series of our equity common stock.
Shares owned in violation of the ownership limit will be subject to the loss of
rights to distributions and voting and other penalties. The ownership limit may
have the effect of inhibiting or impeding a change in control.
Operating Partnership Agreement
We have agreed in the agreement of limited partnership of Boston
Properties Limited Partnership not to engage in business combinations unless
limited partners of Boston Properties Limited Partnership other than Boston
Properties, Inc. receive, or have the opportunity to receive, the same
consideration for their partnership interests as holders of our common stock in
the transaction. If these limited partners do not receive such consideration, we
cannot engage in the transaction unless 75% of these limited partners vote to
approve the transaction. In addition, we have agreed in the partnership
agreement that we will not consummate business combinations in which we received
the approval of our stockholders unless these limited partners are also allowed
to vote and the transaction would have been approved had these limited partners
been able to vote as stockholders on the transaction. Therefore, if our
stockholders approve a business combination that requires a vote of
stockholders, the partnership agreement requires the following before we can
consummate the transaction:
. holders of interests in Boston Properties Limited Partnership
(including Boston Properties, Inc.) must vote on the matter;
. Boston Properties, Inc. must vote its partnership interests in
the same proportion as our stockholders voted on the
transaction; and
. the result of the partners' vote must be such that had such vote
been a vote of stockholders, the business combination would have
been approved.
As a result of these provisions, a potential acquiror may be deterred
from making an acquisition proposal and we may be prohibited by contract from
engaging in a proposed business combination even though our stockholders approve
of the combination.
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Shareholder Rights Plan
We have adopted a shareholder rights plan. Under the terms of this
agreement, we can in effect prevent a person or group from acquiring more than
15% of the outstanding shares of our common stock, because, unless we approve of
the acquisition, after the person acquires more than 15% of our outstanding
common stock, all other stockholders will have the right to purchase securities
from us at a price that is less than their then fair market value, which would
substantially reduce the value and influence of the stock owned by the acquiring
person. Our board of directors can prevent the agreement from operating by
approving of the transaction, which gives us significant power to approve or
disapprove of an acquiror's efforts to acquire a large interest in our company.
We may change our policies without obtaining the approval of our stockholders.
Our operating and financial policies, including our policies with
respect to acquisitions, growth, operations, indebtedness, capitalization and
dividends, are determined by our board of directors. Accordingly, as a
stockholder, you will have little direct control over these policies.
Our success depends on key personnel whose continued service is not guaranteed.
We depend on the efforts of key personnel, particularly Mortimer B.
Zuckerman, Chairman of our board of directors, and Edward H. Linde, our
President and Chief Executive Officer. Among the reasons that Messrs. Zuckerman
and Linde are important to our success is that each has a national reputation
which attracts business and investment opportunities and assists us in
negotiations with lenders. If we lost their services, our relationships with
lenders, potential tenants and industry personnel would diminish.
Our other executive officers who serve as managers of our offices have
strong regional reputations. Their reputations aid us in identifying
opportunities, having opportunities brought to us, and negotiating with tenants
and build-to-suit prospects. While we believe that we could find replacements
for these key personnel, the loss of their services could materially and
adversely effect our operations because of diminished relationships with
lenders, prospective tenants and industry personnel.
Mr. Zuckerman has substantial outside business interests, including
serving as Chairman of the board of directors of U.S. News & World Report, The
New York Daily News and Applied Graphics Technologies, and serving as a member
of the board of directors of Snyder Communications and Loews Cineplex
Entertainment. Such outside business interests could interfere with his ability
to devote time to our business and affairs. Over the last twenty years, Mr.
Zuckerman has devoted a significant portion, although not a majority, of his
business time to the affairs of Boston Properties and its predecessors. We have
no assurance that he will continue to devote any specific portion of his time to
us, although at present, he has no commitments which would prevent him from
maintaining his current level of involvement with our business.
Conflicts of interest exist with holders of interests in Boston Properties
Limited Partnership.
Sales of properties and repayment of related indebtedness will have
different effects on holders of interests in Boston Properties Limited
Partnership than on our stockholders.
Some holders of interests in Boston Properties Limited Partnership,
including Messrs. Zuckerman and Linde, would incur adverse tax consequences upon
the sale of certain of our properties and on the repayment of related debt which
differ from the tax consequences to us and our stockholders. Consequently, such
holders of interests in Boston Properties Limited Partnership may have different
objectives regarding the appropriate pricing and timing of any such sale or
repayment of debt. While we have exclusive authority under the agreement of
limited partnership of Boston Properties Limited Partnership to determine when
to refinance or repay debt or whether, when, and on what terms to sell a
property, subject, in the case of certain properties, to the contractual
commitments described below, any such decision would require the approval of our
board of directors. As directors and executive officers, Messrs. Zuckerman and
Linde have substantial influence with respect to any such decision.
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Their influence could be exercised in a manner inconsistent with the interests
of some, or a majority, of our stockholders, including in a manner which could
prevent completion of a sale of a property or the repayment of indebtedness.
Agreement not to sell some properties.
Under the terms of the agreement of limited partnership of Boston
Properties Limited Partnership, we have agreed not to sell or otherwise transfer
some of our properties, prior to specified dates, in any transaction that would
trigger taxable income, without first obtaining the consent of Messrs. Zuckerman
and Linde. However, we are not required to obtain their consent if, during the
applicable period, each of them does not hold at least 30% of his original
interests in Boston Properties Limited Partnership. In addition, we have entered
into similar agreements with respect to other properties that we have acquired
in exchange for interests in Boston Properties Limited Partnership. There are a
total of 26 properties subject to these restrictions, and those 26 properties
are estimated to have accounted for approximately 52% of our total revenue on a
pro forma basis for the year ended December 31, 1998.
Boston Properties Limited Partnership has also entered into agreements
providing Messrs. Zuckerman and Linde and others with the right to guarantee our
additional and/or substitute indebtedness in the event that certain other
indebtedness is repaid or reduced.
The agreements described above may hinder actions that we may otherwise
desire to take because we would be required to make payments to the
beneficiaries of such agreements if we violate these agreements.
Messrs. Zuckerman and Linde will continue to engage in other activities.
Messrs. Zuckerman and Linde have a broad and varied range of investment
interests. Either one could acquire an interest in a company which is not
currently involved in real estate investment activities but which may acquire
real property in the future. However, pursuant to Mr. Linde's employment
agreement and Mr. Zuckerman's non-compete agreement, Messrs. Zuckerman and Linde
will not, in general, have management control over such companies and,
therefore, they may not be able to prevent one or more such companies from
engaging in activities that are in competition with our activities.
Changes in market conditions could adversely affect the market price of our
publicly traded securities.
As with other publicly traded equity securities, the value of our common
stock depends on various market conditions which may change from time to time.
Among the market conditions that may affect the value of our publicly traded
securities are the following:
. the extent of investor interest in us;
. the general reputation of real estate investment trusts and the
attractiveness of our equity securities in comparison to other
equity securities, including securities issued by other real
estate-based companies;
. our financial performance; and
. general stock and bond market conditions.
The market value of equity securities is based primarily upon the
market's perception of our growth potential and our current and potential future
earnings and cash dividends. Consequently, our equity securities, including our
common stock, may trade at prices that are higher or lower than our net asset
value per share of common stock. If our future earnings or cash dividends are
less than expected, it is likely that the market price of our common stock will
diminish.
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Market interest rates may have an effect on the value of our publicly traded
securities.
One of the factors that investors may consider important in deciding
whether to buy or sell shares of a real estate investment trust is the dividend
with respect to such real estate investment trust's shares as a percentage of
the price of such shares, relative to market interest rates. If market interest
rates go up, prospective purchasers of shares of a real estate investment trust
may expect a higher distribution rate on our common stock. Higher market
interest rates would not, however, result in more funds for us to distribute
and, to the contrary, would likely increase our borrowing costs and potentially
decrease funds available for distribution. Thus, higher market interest rates
could cause the market price of our publicly traded securities to go down.
The number of shares available for future sale could adversely affect the market
price of our stock.
We have entered into a number of private placement transactions where
shares of capital stock of Boston Properties, Inc. or interests in Boston
Properties Limited Partnership were issued both at the time of our initial
public offering and thereafter to owners of properties we acquired or to
institutional investors. This stock, or stock issuable in exchange for such
interests in Boston Properties Limited Partnership, may be sold in the public
market over time pursuant to registration rights. Additional stock reserved
under our employee benefit and other incentive plans, including stock options,
may also be sold in the public at some time in the future. Future sales of stock
in the public securities markets could adversely affect the price of our stock.
We cannot predict the effect that perception in the market that such sales may
occur will have on the market price of our stock.
We could be adversely affected if we have underestimated our Year 2000 computer
problems.
The Year 2000 issue relates to how computer systems and programs that
will recognize and process dates after December 31, 1999. Most computer systems
and programs that use two digits to specify a year, if not modified prior to the
year 2000, will be unable to properly recognize dates. This could result in
system failures or miscalculations that could result in disruptions of normal
business operations. The Year 2000 issue can also affect embedded technology
systems and programs of our properties such as:
. building automation;
. security card access;
. fire and life safety;
. elevators; and
. office equipment.
We did not obtain new owner's title insurance policies in connection with
properties acquired during our initial public offering.
We acquired many of our properties from our predecessors at the
completion of our initial public offering in June 1997. Before we acquired these
properties each of them was insured by a title insurance policy. We did not,
however, obtain new owner's title insurance policies in connection with the
acquisition of such properties. Nevertheless, because in many instances we
acquired these properties indirectly by acquiring ownership of the entity which
owned the property and those owners remain in existence as our subsidiaries,
some of these title insurance policies may continue to benefit us. Many of these
title insurance policies may be for amounts less than the current values of the
applicable properties. If there was a title defect related to any of these
properties, or to any of the properties acquired at the time of our initial
public offering, that is no longer covered by a title insurance policy, we could
lose both our capital invested in and our anticipated profits from such
property.
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We have obtained title insurance policies for all properties that we
have acquired after our initial public offering.
We face possible adverse changes in tax and environmental laws.
Generally, we pass through to our tenants costs resulting from increases
in real estate taxes. However, we generally do not pass through to our tenants
increases in income, service or transfer taxes. Similarly, changes in laws
increasing the potential liability for environmental conditions existing on our
properties or increasing the restrictions on discharges or other conditions may
result in significant unanticipated expenditures. These increased costs could
adversely affect our financial condition and results of operations and the
amount of cash available for payment of dividends.
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and we are required to file reports and proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy these reports, proxy statements and information at the
public reference facilities maintained by the Securities and Exchange Commission
at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and at the Securities and Exchange Commission's Regional Offices at 7 World
Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You may also obtain
copies at the prescribed rates from the Public Reference Section of the
Securities and Exchange Commission at its principal office in Washington, D.C.
You may call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information about the public reference rooms. The Securities and
Exchange Commission maintains a web site that contains reports, proxy and
information statements and other information regarding registrants, including,
Boston Properties, Inc., that file electronically with the Securities and
Exchange Commission. You may access the Securities and Exchange Commission's web
site at http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by
reference the information that we file with them. Incorporation by reference
means that we can disclose important information to you by referring you to
other documents that are legally considered to be part of this prospectus
supplement or the attached prospectus, and later information that we file with
the Securities and Exchange Commission will automatically update and supersede
the information in this prospectus, any supplement and the documents listed
below. We incorporate by reference the specific documents listed below and any
future filings made with the Securities and Exchange Commission under Section
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act until we sell all of
the securities:
. our Annual Report on Form 10-K for the year ended December 31,
1998 as amended by Form 10-K/A;
. our Proxy Statement dated March 31, 1999 prepared in connection
with our Annual Meeting of Stockholders held on May 5, 1999;
. our Quarterly Reports on Form 10-Q for the three months ended
March 31, 1999, the six months ended June 30, 1999 and the nine
months ended September 30, 1999;
. our Current Reports on Form 8-K dated January 26, 1999, February
11, 1999, April 27, 1999, May 25, 1999, July 27, 1999 and
October 25, 1999;
. our Current Report on Form 8-K/A filed on January 26, 1999
(which amended our Current Report on Form 8-K dated November 12,
1998);
. the description of our common stock contained in our
Registration Statement on Form 8-A, filed on June 12, 1997 and
all amendments and reports updating such description; and
. the description of the rights to purchase shares of our Series E
Junior Participating Cumulative Preferred Stock contained in our
registration statement on Form 8-A, filed on June 12, 1997, and
the description contained in our registration statement on Form
8-A/A filed on June 16, 1997 amending such description, and all
amendments and reports updating that description.
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone to provide you with
different information. You should not assume that
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the information in this prospectus or the documents incorporated by reference is
accurate as of any date other than the date on the front of this prospectus or
those documents.
FORWARD-LOOKING STATEMENTS
Statements incorporated by reference or made under the captions "Risk
Factors" and "Our Company" and elsewhere in this prospectus are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. When we use the words
"anticipate," "assume," "believe," "estimate," "expect," "intend" and other
similar expressions, they generally identify forward-looking statements.
Forward-looking statements include, for example, statements relating to
acquisitions and related financial information, development activities, business
strategy and prospects, future capital expenditures, sources and availability of
capital, environmental and other regulations and competition.
You should exercise caution in interpreting and relying on
forward-looking statements since they involve known and unknown risks,
uncertainties and other factors which are, in some cases, beyond our control and
could materially affect our actual results, performance or achievements. Some of
the factors that could cause our actual results, performance or achievements to
differ materially from those expressed or implied by forward-looking statements
include, but are not limited to, the following:
. we are subject to general risks affecting the real estate
industry, such as the need to enter into new leases or renew
leases on favorable terms to generate rental revenues, and
dependence on our tenants' financial condition;
. we may fail to identify, acquire, construct or develop
additional properties; we may develop properties that do not
produce a desired yield on invested capital; or we may fail to
effectively integrate acquisitions of properties or portfolios
of properties;
. financing may not be available, or may not be available on
favorable terms;
. we need to make distributions to our stockholders for us to
qualify as a real estate investment trust, and if we need to
borrow the funds to make such distributions such borrowings may
not be available on favorable terms;
. we depend on the primary markets where our properties are
located and these markets may be adversely affected by local
economic and market conditions which are beyond our control;
. we are subject to potential environmental liabilities;
. we are subject to complex regulations relating to our status as
a real estate investment trust and would be adversely affected
if we failed to qualify as a real estate investment trust; and
. market interest rates could adversely affect the market prices
for our common stock, as well as our performance and cash flow.
We caution you that, while forward looking statements reflect our good
faith beliefs, they are not guarantees of future performance. In addition, we
disclaim any obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
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OUR COMPANY
Boston Properties, Inc.
. We are one of the largest owners and developers of office
properties in the United States, concentrated in the Northeast
Corridor from Virginia to Greater Boston and in downtown San
Francisco.
. As of September 30, 1999, we owned 132 properties, aggregating
more than 35.3 million square feet. Our properties consist of
119 office properties, consisting of 87 Class A office
buildings, including ten under development and 32 properties
that support both office and technical uses, nine industrial
properties, three hotels and one parking garage.
. We are a Delaware corporation formed in 1997 to continue and
expand the operations of our predecessor organization founded by
Messrs. Mortimer B. Zuckerman and Edward H. Linde. We have
elected to be taxed as a real estate investment trust for
federal income tax purposes and operate principally through
Boston Properties Limited Partnership, a Delaware limited
partnership. We are the sole general partner and the owner of
approximately 67.3% of the economic interests in Boston
Properties Limited Partnership.
. Our executive offices are located at 800 Boylston Street,
Boston, Massachusetts 02199 and our telephone number is (617)
236-3300.
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DESCRIPTION OF COMMON STOCK
The following is a summary of the material terms and provisions of our
common stock. It may not contain all the information that is important to you.
You can access complete information by referring to our certificate of
incorporation, bylaws, our shareholder rights plan and the Delaware General
Corporate Law. Our shareholder rights plan is summarized below. Our shareholder
rights plan, certificate of incorporation and bylaws are incorporated by
reference into the registration statement of which this prospectus is a part.
General
Under our certificate of incorporation, we have authority to issue
250,000,000 shares of common stock, par value $.01 per share. As of November 4,
1999, 97,904,697.8 shares of common stock were issued and outstanding. In
addition, as of November 4, 1999, 23,815,811.0 common units of Boston Properties
Limited Partnership which are exchangeable for common stock on a one-for-one
basis were outstanding. We may issue common stock from time to time. Our board
of directors must approve the amount of stock we sell and the price for which it
is sold. Holders of our common stock do not have any preferential rights or
preemptive rights to buy or subscribe for capital stock or other securities that
we may issue. However, each outstanding share of our common stock currently has
attached to it one preferred share purchase right issued under our shareholder
rights plan, which is summarized below. Our common stock does not have any
redemption or sinking fund provisions or any conversion rights.
All of our common stock, when issued, will be duly authorized, fully
paid and nonassessable. This means that the full price for our outstanding
common stock will have been paid at the time of issuance and that any holder of
our common stock will not later be required to pay us any additional money for
such common stock.
Dividends
Subject to the preferential rights of any other shares of our stock and
the provisions of our certificate of incorporation regarding excess shares,
holders of our common stock may receive dividends out of assets that we can
legally use to pay dividends when and if they are authorized and declared by our
board of directors. Each common stockholder shares in the same proportion as
other common stockholders out of assets that we can legally use to pay
distributions after we pay or make adequate provision for all of our known debts
and liabilities in the event we are liquidated, dissolved or our affairs are
wound up.
Voting rights
Subject to the provisions of our certificate of incorporation regarding
excess shares, holders of common stock will have the exclusive power to vote on
all matters presented to our stockholders, including the election of directors,
except as otherwise provided by Delaware law or as provided with respect to any
other shares of our stock. Holders of our common stock are entitled to one vote
per share. There is no cumulative voting in the election of our directors, which
means that at any meeting of our stockholders, the holders of a majority of the
outstanding common stock can elect all of the directors then standing for
election.
Other rights
Subject to the provisions of our certificate of incorporation regarding
excess shares, all shares of our common stock have equal dividend, distribution,
liquidation and other rights, and have no preference, appraisal or exchange
rights, except for any appraisal rights provided by Delaware law.
Holders of our common stock have no conversion, sinking fund or
redemption rights, or preemptive rights to subscribe for any of our securities.
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Delaware law generally requires that we obtain the approval of a
majority of the outstanding shares of our common stock that are entitled to vote
before we may consolidate our stock or merge with another corporation. However,
Delaware law does not require that we seek approval of our stockholders to enter
into a merger in which we are the surviving corporation following the merger if:
. our certificate of incorporation is not amended in any respect
by the merger;
. each share of our stock outstanding prior to the merger is to be
an identical share of stock following the merger; and
. any shares of common stock (together with any other securities
convertible into shares of common stock) to be issued or
delivered as a result of the merger represent no more than 20%
of the number of shares of our common stock outstanding
immediately prior to the merger.
Restrictions on ownership
For us to qualify as a real estate investment trust under the Internal
Revenue Code, no more than 50% in value of our outstanding stock may be owned,
actually or constructively, by five or fewer individuals during the last half of
a taxable year. To assist us in meeting this requirement, we may take actions
such as the automatic conversion of shares in excess of this ownership
restriction into excess shares to limit the ownership of our outstanding equity
securities, actually or constructively, by one person or entity. See "Limits on
Ownership of Our Stock" beginning on page 24.
Transfer agent
The transfer agent and registrar for our common stock is BankBoston,
N.A.
Preferred shares
Under our certificate of incorporation, we have authority to issue up to
50,000,000 shares of preferred stock. At November 4, 1999, we had outstanding
2,000,000 shares of Series A Convertible Redeemable Preferred Stock. The general
terms of our Series A convertible redeemable preferred stock are as follows:
. Dividends on our Series A stock are cumulative from the date of
original issuance and payable quarterly generally at a rate of
5.0% per annum through March 31, 1999; 5.5% through December 31,
1999; 5.625% through December 31, 2000; 6.0% through December
31, 2001; 6.5% through December 31, 2002; 7.0% until May 12,
2009; and 6.0% thereafter.
. On or after December 31, 2002, shares of our Series A stock are
convertible, at the holder's election, into shares of our common
stock at a conversion price of $38.10 per share of common stock.
. Beginning on May 12, 2009, the Series A stock may be redeemed in
six annual tranches at the election of either the holder or us.
The liquidation preference of our Series A stock is $50 per
share.
Under our certificate of incorporation, we have authority to issue up to
150,000,000 shares of Series E Junior Participating Cumulative Preferred Stock.
At November 4, 1999, none of the Series E Junior Participating Cumulative
Preferred Stock were issued or outstanding. Shares of our Series E Junior
Participating Cumulative Preferred Stock may be issued under our shareholder
rights plan, which is summarized below.
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We do not have any other preferred stock outstanding as of the date of
this prospectus. We may issue preferred stock from time to time, in one or more
series, as authorized by our board of directors. Prior to issuance of shares of
each series, our board of directors is required by the Delaware General
Corporation Law and our certificate of incorporation to fix for each series,
subject to the provisions of our certificate of incorporation regarding excess
shares, the terms, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
and terms or conditions of redemption, as are permitted by Delaware law. The
preferred stock will, when issued, be fully paid and nonassessable and will have
no preemptive rights. Our board of directors could authorize the issuance of
preferred stock with terms and conditions that could have the effect of
discouraging a takeover or other transaction that holders of our common stock
might believe to be in their best interests or in which holders of some, or a
majority, of our common stock might receive a premium for their shares over the
then market price of such common stock.
Shareholder rights plan
In 1997, our board of directors adopted a shareholder rights plan and
entered into a shareholder rights agreement with BankBoston, N.A., as rights
agent. The purpose of our shareholder rights plan is to enhance our board of
directors' ability to protect our stockholders' interests by ensuring that such
stockholders receive fair treatment in the event that any coercive takeover
attempt of Boston Properties is made in the future. The rights plan is intended
to provide our board of directors with sufficient time to consider any and all
alternatives to such an action. The rights may discourage, delay or prevent
hostile takeovers. They are not intended, however, to interfere with any merger
or other business combination approved by our board of directors.
Under our shareholder rights plan, one preferred stock purchase right is
attached to each outstanding share of our common stock. We refer to these
preferred stock purchase rights as the "rights." Each share of common stock
issued in the future will also receive a right until any of the rights become
exercisable. Until a right is exercised, the holder of a right does not have any
additional rights as a stockholder. These rights will expire on June 11, 2007,
unless previously redeemed or exchanged by us as described below. These rights
trade automatically with our common stock and will separate from the common
stock and become exercisable only under the circumstances described below.
In general, the rights will become exercisable when the first of the
following events happens:
1. ten calendar days after a public announcement that a person or
group has acquired beneficial ownership of 15% or more of the
sum of our outstanding common stock and excess stock; or
2. ten business days, or such other date determined by our board of
directors, after the beginning of a tender offer or exchange
offer that would result in a person or group beneficially owning
15% or more of the sum of our outstanding common stock and
excess stock.
Under our shareholder rights plan, our common stock that may be issued in
exchange for outstanding common units of limited partnership interest in Boston
Properties Limited Partnership is not included in the definition of beneficial
ownership.
However, if a person who became a limited partner of Boston Properties
Limited Partnership at the time of our initial public offering acquires
beneficial ownership of 15% or more of the sum of our common stock and excess
stock, the rights will not become exercisable unless the acquisition results in
that person acquiring a greater percentage of the outstanding shares of our
outstanding common stock plus outstanding common units of limited partnership
interest of Boston Properties Limited Partnership than the percentage of
outstanding shares of common stock plus outstanding common units of limited
partnership interest of Boston Properties Limited Partnership that person held
at the completion of our initial public offering. In addition, no group of which
a person who became a partner of Boston Properties Limited Partnership at the
time of our initial public offering is a member will be deemed to beneficially
own
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our common stock and excess stock owned by that person. Common units of limited
partnership interest of Boston Properties Limited Partnership held by Boston
Properties, Inc. are excluded in making these calculations.
If the rights become exercisable, holders of the rights will be able to
purchase from us a unit of preferred stock equal to one ten-thousandth of a
share of our Series E Junior Participating Cumulative Preferred Stock at a price
of $100 per unit, subject to adjustment. We have designated 200,000 shares of
Series E Junior Participating Cumulative Preferred Stock and have reserved such
shares for issuance under our shareholder rights plan. However, all rights owned
by any persons or groups triggering the event shall be void.
In addition, if at any time following a public announcement that a
person or group has acquired beneficial ownership of 15% or more of the sum of
our outstanding common stock and excess stock:
. we enter into a merger or other business combination transaction
in which we are not the surviving entity;
. we enter into a merger or other business combination transaction
in which all or part of our common stock is exchanged; or
. we sell, transfer or mortgage 50% or more of our assets or
earning power,
then each holder of a right, other than rights held by the person or group who
triggered the event, will be entitled to receive, upon exercise, common stock of
the acquiring company equal to two times the purchase price of the right.
At any time after our public announcement that a person or group has
acquired beneficial ownership of 15% or more of the sum of our outstanding
common stock and excess stock, our board of directors may, at its option,
exchange all or any part of the then outstanding and exercisable rights for
shares of our common stock or units of Series E Preferred Stock at an exchange
ratio of one share or one unit per right. However, our board of directors
generally will not be empowered to effect such exchange at any time after any
person becomes the beneficial owner of 50% or more of our outstanding common
stock.
We may redeem the rights at $.001 per right at any time before the date
that is ten days after a public announcement that a person or group has acquired
beneficial ownership of 15% or more of the sum of our outstanding common stock
and excess stock. We may extend this redemption period at any time while the
rights are still redeemable. The rights will expire at the close of business on
June 11, 2007 unless we redeem them before that date.
The above description of our shareholder rights plan is not intended to
be a complete description. For a full description of the shareholder rights
plan, you should read the rights agreement. You may obtain a copy of the rights
agreement at no charge by writing to us at the address listed on page 19.
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LIMITS ON OWNERSHIP OF OUR STOCK
Ownership limits
For us to qualify as a real estate investment trust under the Internal
Revenue Code, among other things, not more than 50% in value of our outstanding
stock may be owned, actually or constructively, by five or fewer individuals
during the last half of a taxable year other than the first year, and such stock
must be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of 12 months other than the first year or during a proportionate
part of a shorter taxable year. In order to protect us against the risk of
losing our status as a real estate investment trust due to a concentration of
ownership among our stockholders, our certificate of incorporation provides that
generally no holder may beneficially own, or be deemed to own by virtue of the
attribution provisions of the Internal Revenue Code, more than 6.6% of any class
or series of our stock. Under our certificate of incorporation, a person
generally "beneficially owns" shares if:
. such person has direct ownership of such shares,
. such person has indirect ownership of such shares taking into
account the constructive ownership rules of Section 544 of the
Internal Revenue Code, as modified by Section 856(h)(1)(B) of
the Internal Revenue Code, or
. such person would be deemed to beneficially own such shares
pursuant to Rule 13d-3 under the Exchange Act of 1934, as
amended.
Our certificate of incorporation allows two exceptions to the 6.6%
ownership limit:
15% Related party ownership limit:
Each of Messrs. Zuckerman and Linde, together with their respective
heirs, legatees, devisees and any other person whose beneficial
ownership of our common stock would be attributed under the Internal
Revenue Code to them, are subject to an ownership limit of 15% for each
of them together with such persons related to them.
15% Look-through entity ownership limit:
Pension plans described in Section 401(a) of the Internal Revenue Code
and mutual funds registered under the Investment Company Act of 1940 are
subject to an ownership limit of 15%. Pension plans and mutual funds are
among the entities that are not treated as stockholders under the "five
or fewer requirement." Rather, the beneficial owners of such entities
will be counted as stockholders for this purpose.
The foregoing restrictions will not apply if our board of directors
determines that it is no longer in our best interests to attempt to qualify, or
to continue to qualify, as a real estate investment trust. In addition, the
foregoing restrictions do not apply with respect to an offeror in the event of
an all cash tender offer by it which has been accepted by at least two-thirds of
our outstanding stock.
Shares in excess of ownership limits
Transfers of our stock or any security convertible into our stock or
other events that would create a direct or indirect ownership of our stock that
would:
. violate the 6.6% ownership limit;
. violate the 15% ownership limit for related parties;
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. violate the 15% ownership limit for look-through entities; or
. result in our disqualification as a real estate investment
trust, including any transfer that results in:
. our stock being owned by fewer than 100 persons,
. Boston Properties being "closely held" with the meaning
of Section 856(h) of the Internal Revenue Code, or
. Boston Properties constructively owning 10% or more of
one of our tenants
shall be null and void and of no effect with respect to the shares in excess of
the applicable limit. Any such shares in excess of an applicable limitation will
be converted automatically into an equal number of shares of our excess stock
that will be transferred by operation of law to a trust for the benefit of a
qualified charitable organization selected by us, but not affiliated with us. As
soon as practicable after the transfer of shares to the trust, the trustee of
the trust will be required to sell such excess shares to a person or entity who
could own such shares without violating the applicable limit and distribute to
the original transferee-stockholder an amount equal to the lesser of:
. the proceeds of such sale, or
. the price paid for our stock in excess of the applicable limit
by the original transferee-owner or, in the event that the
original violative transfer was a gift or an event other than a
transfer, the fair market value of the excess shares on the date
they are sold by the trust.
All dividends and other distributions received with respect to the
excess shares prior to their sale by the trust and any proceeds from the sale by
the trust in excess of the amount distributable to the original transferee-owner
will be distributed to the beneficiary of the trust.
Right to purchase excess shares
In addition to the foregoing transfer restrictions, we have the right,
for a period of 90 days during the time any excess shares are held by the trust,
to purchase all or any portion of the excess shares for the lesser of the price
paid for the shares in excess of the applicable limit by the original
transferee-stockholder or the market price of our stock on the date we exercise
our option to purchase, which amount will be paid to the original
transferee-stockholder. The market price will be determined in the manner set
forth in our certificate of incorporation. The 90-day period begins on the date
of the violative transfer if the original transferee-stockholder gives notice to
us of the transfer or, if no such notice is given, the date on which our board
of directors determines that a violative transfer has been made.
Disclosure of stock ownership by our stockholders
Each of our stockholders will upon demand be required to disclose to us
in writing any information with respect to the direct, indirect and constructive
ownership of shares of our stock as our board of directors deems necessary to
comply with the provisions of the Internal Revenue Code applicable to real
estate investment trusts, to comply with the requirements of any taxing
authority or governmental agency or to determine any such compliance.
These ownership limitations may have the effect of precluding the
acquisition of control of Boston Properties unless our board of directors
determines that our maintenance of real estate investment trust status is no
longer in our best interests.
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IMPORTANT PROVISIONS OF DELAWARE LAW AND
OUR CERTIFICATE OF INCORPORATION AND BYLAWS
The following is a summary of important provisions of Delaware law and
our certificate of incorporation and bylaws which affect us and our
stockholders. The description below is intended as only a summary. You can
access complete information by referring to Delaware General Corporation Law and
our certificate of incorporation and bylaws.
Business combinations with interested stockholders under Delaware law
Section 203 of the Delaware General Corporation Law prevents a publicly
held corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless:
. before the date on which the person became an interested
stockholder, the board of directors of the corporation approved
either the business combination or the transaction in which the
person became an interested stockholder;
. the interested stockholder owned at least 85% of the outstanding
voting stock of the corporation at the beginning of the
transaction in which it became an interested stockholder,
excluding stock held by directors who are also officers of the
corporation and by employee stock plans that do not provide
participants with the rights to determine confidentially whether
shares held subject to the plan will be tendered in a tender or
exchange offer; or
. after the date on which the interested stockholder became an
interested stockholder, the business combination is approved by
the board of directors and the holders of two-thirds of the
outstanding voting stock of the corporation voting at a meeting,
excluding the voting stock owned by the interested stockholder.
As defined in Section 203, an "interested stockholder" is generally a
person owning 15% or more of the outstanding voting stock of the corporation. As
defined in Section 203, a "business combination" includes mergers,
consolidations, stock and assets sales and other transactions with the
interested stockholder.
The provisions of Section 203 may have the effect of delaying, deferring
or preventing a change of control of Boston Properties.
Amendment of our certificate of incorporation and bylaws
Amendments to our certificate of incorporation must be approved by our
board of directors and generally by the vote of a majority of the votes entitled
to be cast at a meeting of our stockholders. However, a 75% stockholder vote is
required for amendments dealing with fundamental governance provisions of our
certificate of incorporation, such as:
. stockholder action
. the powers, election of, removal of and classification of
directors
. limitation of liability
. amendment of our certificate of incorporation
Unless otherwise required by law, our board of directors may amend our
bylaws by a majority vote of our directors then in office. Our bylaws may also
be amended by a majority stockholder vote
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if our board of directors recommends the approval of the amendment, and
otherwise by a 75% stockholder vote.
Meetings of stockholders
Under our bylaws, we will hold annual meetings of our stockholders at
such date and time as determined by our board of directors, Chairman or
President. Our bylaws require advance notice for our stockholders to make
nominations of candidates for our board of directors or bring other business
before an annual meeting of our stockholders. Only our board of directors can
call special meetings of our stockholders and any special meeting is restricted
to considering and acting upon matters set forth in the notice of that special
meeting.
Board of directors
Our board of directors is divided into three classes. As the term of
each class expires, directors in that class will be elected for a term of three
years and until their successors are duly elected and qualified.
Our certificate of incorporation provides that a 75% vote of our board
of directors is required to approve fundamental changes or actions, including:
. a change of control of Boston Properties or of Boston Properties
Limited Partnership;
. any amendment to the limited partnership agreement of Boston
Properties Limited Partnership;
. any waiver of the limitations on ownership contained in our
certificate of incorporation;
. certain issuances of equity securities by Boston Properties; and
. termination of our status as a REIT.
Shareholder rights plan and ownership limitations
We have adopted a shareholder rights agreement. In addition, our
certificate of incorporation contains provisions that limit the ownership by any
person of shares of any class or series of our capital stock. See "Shareholder
rights plan" beginning on page 22 and "Limits on ownership of our stock"
beginning on page 24.
Limitation of directors' and officers' liability
Our certificate of incorporation generally limits the liability of our
directors to Boston Properties to the fullest extent permitted by Delaware law,
as it now exists or may in the future be amended. The Delaware General
Corporation Law permits a corporation to indemnify its directors, officers,
employees or agents and expressly provides that the indemnification provided for
under the Delaware General Corporation Law shall not be deemed exclusive of any
indemnification right under any bylaw, vote of stockholders or disinterested
directors, or otherwise. Delaware law permits indemnification against expenses
and certain other liabilities arising out of legal actions brought or threatened
against such persons for their conduct on behalf of a corporation, provided that
each such person acted in good faith and in a manner that he or she reasonably
believed was in or not opposed to the corporation's best interests and, in the
case of a criminal proceeding, provided such person had no reasonable cause to
believe his or her conduct was unlawful. Delaware law does not allow
indemnification of directors in the case of an action by or in the right of a
corporation unless the directors successfully defend the action or
indemnification is ordered by the court.
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Our bylaws provide that our directors and officers will be, and, in the
discretion of our board of directors, non-officer employees may be, indemnified
by Boston Properties to the fullest extent authorized by Delaware law, as it now
exists or may in the future be amended, against all expenses and liabilities
actually and reasonably incurred in connection with service for or on behalf of
Boston Properties. Our bylaws also provide that the right of directors and
officers to indemnification shall be a contract right and shall not be exclusive
of any other right now possessed or hereafter acquired under any bylaw,
agreement, vote of stockholders, or otherwise.
Our certificate of incorporation contains a provision permitted by
Delaware law that generally eliminates the personal liability of directors for
monetary damages for breaches of their fiduciary duty, including breaches
involving negligence or gross negligence in business combinations, unless the
director has breached his or her duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or a knowing violation of law, paid a dividend
or approved a stock repurchase in violation of the Delaware General Corporation
Law or obtained an improper personal benefit. This provision does not alter a
director's liability under the federal securities laws. In addition, this
provision does not affect the availability of equitable remedies, such as an
injunction or rescission, for breach of fiduciary duty.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
Boston Properties pursuant to the foregoing provisions, we have been informed
that in the opinion of the staff of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
Indemnification agreements
We have entered into indemnification agreements with each of our
directors and executive officers. The indemnification agreements require, among
other things, that we indemnify our directors and executive officers to the
fullest extent permitted by law and advance to our directors and executive
officers all related expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. Under these agreements, we
must also indemnify and advance all expenses incurred by our directors and
executive officers seeking to enforce their rights under the indemnification
agreements and cover our directors and executive officers under our directors'
and officers' liability insurance. Although the form of indemnification
agreement offers substantially the same scope of coverage afforded by our
certificate of incorporation and our bylaws, it provides greater assurance to
our directors and executive officers that indemnification will be available,
because, as a contract, it cannot be modified unilaterally in the future by our
board of directors or by our stockholders to eliminate the rights it provides.
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FEDERAL INCOME TAX CONSIDERATIONS AND CONSEQUENCES OF YOUR INVESTMENT
The following is a general summary of the material federal income tax
considerations and consequences associated with an investment in our common
stock. The following discussion is not exhaustive of all possible tax
considerations and is not tax advice. Moreover, this summary does not deal with
all tax aspects or consequences that might be relevant to you in light of your
personal circumstances; nor does it deal with particular types of stockholders
that are subject to special treatment under the Internal Revenue Code, such as
insurance companies, financial institutions and broker-dealers. The Internal
Revenue Code provisions governing the federal income tax treatment of real
estate investment trusts are highly technical and complex, and this summary is
qualified in its entirety by the applicable Internal Revenue Code provisions,
rules and regulations promulgated thereunder, and administrative and judicial
interpretations thereof. The following discussion is based on current law and on
representations from us concerning our compliance with the requirements for
qualification as a real estate investment trust.
We urge you, as a prospective investor, to consult your own tax advisor
with respect to the specific federal, state, local, foreign and other tax
consequences to you of the purchase, holding and sale of our common stock.
Federal income taxation
In the opinion of our tax counsel, Goodwin, Procter & Hoar LLP,
commencing with our first taxable year ended December 31, 1997, we have been
organized in conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code, and our method of operation
will enable us to continue to meet the requirements for qualification and
taxation as a real estate investment trust under the Internal Revenue Code,
provided that we have operated and continue to operate in accordance with
various assumptions and factual representations made by us concerning our
business, properties and operations. We may not, however, have met or continue
to meet such requirements. Qualification as a real estate investment trust
depends upon us having met and continuing to meet the various requirements
imposed under the Internal Revenue Code through actual operating results.
Goodwin, Procter & Hoar LLP has relied on our representations regarding our
operations and has not and will not review these operating results. No assurance
can be given that actual operating results have met or will meet these
requirements.
If we have qualified and continue to qualify for taxation as a real
estate investment trust, we generally will not be subject to federal corporate
income taxes on that portion of our ordinary income or capital gain that is
currently distributed to stockholders. The real estate investment trust
provisions of the Internal Revenue Code generally allow a real estate investment
trust to deduct dividends paid to its stockholders. This deduction for dividends
paid to stockholders substantially eliminates the federal double taxation on
earnings that usually results from investments in a corporation. "Double
taxation" refers to taxation of income once at the corporate level when earned
and once again at the stockholder level when distributed. Additionally, a real
estate investment trust may elect to retain and pay taxes on a designated amount
of its net long-term capital gains, in which case the stockholders of the real
estate investment trust will include their proportionate share of the
undistributed long-term capital gains in income and receive a credit or refund
for their share of the tax paid by the real estate investment trust.
Failure to qualify
If we fail to qualify for taxation as a real estate investment trust in
any taxable year and the relief provisions do not apply, we will be subject to
tax on our taxable income at regular corporate rates, including any applicable
alternative minimum tax. Distributions to stockholders in any year in which we
fail to qualify will not be deductible by us nor will they be required to be
made. In such event, to the extent of current or accumulated earnings and
profits, all distributions to stockholders will be dividends, taxable as
ordinary income, and subject to limitations of the Internal Revenue Code,
corporate distributees may be eligible for the dividends-received deduction.
Unless we are entitled to relief under specific statutory provisions, we also
will be disqualified from taxation as a real estate investment trust for the
four taxable years following the year during which qualification was lost. It is
not possible to state
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whether in all circumstances we would be entitled to such statutory relief. For
example, we must derive a minimum percent of our gross income from specified
sources in order to qualify as a real estate investment trust. If we fail to
satisfy these gross income tests because nonqualifying income that we
intentionally incur exceeds the limit on such income, the Internal Revenue
Service could conclude that our failure to satisfy the tests was not due to
reasonable cause, which is a condition to qualification for relief from the
four-year disqualification rule.
Taxation of United States stockholders and potential tax consequences of their
investment in our common stock
When we refer to a United States stockholder, we mean a holder of common
stock that is for federal income tax purposes
. an individual who is a citizen or resident of the United States;
. a corporation created or organized in or under the laws of the
United States, any state thereof or the District of Columbia; or
. a partnership, trust or estate treated as a domestic
partnership, trust or estate.
For any taxable year for which we qualify for taxation as a real estate
investment trust, amounts distributed to taxable United States stockholders will
be taxed as follows.
Distributions generally. Distributions other than capital gain dividends
to United States stockholders will be taxable as dividends to the extent of our
current or accumulated earnings and profits as determined for federal income tax
purposes. For purposes of determining whether distributions are out of current
or accumulated earnings and profits, our earnings and profits will be allocated
first to any of our outstanding preferred shares and then to our common stock.
Such dividends will be taxable to the stockholders as ordinary income and will
not be eligible for the dividends-received deduction for corporations. To the
extent that we make a distribution to a United States stockholder in excess of
current or accumulated earnings and profits, the distribution will be treated
first as a tax-free return of capital with respect to the shares, reducing the
United States stockholder's tax basis in the shares, and the distribution in
excess of a United States stockholder's tax basis in the shares will be taxable
as gain realized from the sale of the shares. Dividends declared by us in
October, November or December of any year payable to a stockholder of record on
a specified date in any such month shall be treated as both paid by us and
received by the stockholder on December 31 of the year, provided that the
dividend is actually paid by us during January of the following calendar year.
United States stockholders may not include on their own federal income tax
returns any of our tax losses.
Capital gain dividends. Dividends to United States stockholders that are
properly designated by us as capital gain dividends will be treated as long-term
capital gains, to the extent they do not exceed our actual net capital gains,
for the taxable year without regard to the period for which the stockholder has
held its common stock. However, corporate stockholders may be required to treat
up to 20% of particular capital gain dividends as ordinary income. Capital gain
dividends are not eligible for the dividends-received deduction for
corporations.
Retained capital gains. A real estate investment trust may elect to
retain, rather than distribute, its net long-term capital gains received during
the year. To the extent designated by the real estate investment trust in a
notice to its stockholders, the real estate investment trust will pay the income
tax on such gains and the real estate investment trust stockholders must include
their proportionate share of the undistributed long-term capital gains so
designated in income. Each real estate investment trust stockholder will be
deemed to have paid its share of the tax paid by the real estate investment
trust, which will be credited or refunded to the stockholder. The basis of each
stockholder's real estate investment trust shares will be increased by its
proportionate amount of the undistributed long-term capital gains, net of the
tax paid by the real estate investment trust, included in such stockholder's
long-term capital gains.
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Passive activity loss and investment interest limitations.
Distributions, including deemed distributions of undistributed long-term capital
gains, from us and gain from the disposition of common stock will not be treated
as passive activity income, and therefore stockholders may not be able to apply
any passive losses against such income. Dividends from us, to the extent they do
not constitute a return of capital, will generally be treated as investment
income for purposes of the investment income limitation on the deductibility of
investment interest. However, net capital gain from the disposition of common
stock or capital gain dividends, including deemed distributions of undistributed
long-term capital gains, generally will be excluded from investment income.
Sale of the common stock. Upon the sale or exchange of common stock, the
United States stockholder will generally recognize gain or loss equal to the
difference between the amount realized on such sale and the tax basis of the
common stock sold or exchanged. Assuming such shares are held as a capital
asset, such gain or loss will be a long-term capital gain or loss if the shares
have been held for more than one year. However, any loss recognized by a United
States stockholder on the sale of common stock held for not more than six months
and with respect to which capital gains were required to be included in such
stockholder's income will be treated as a long-term capital loss to the extent
of the amount of such capital gains so included.
Treatment of tax-exempt stockholders. Distributions, including deemed
distributions of undistributed long-term capital gains, from us to a tax-exempt
employee pension trust or other domestic tax-exempt stockholder generally will
not constitute unrelated business taxable income unless the stockholder has
borrowed to acquire or carry its common stock. However, certain qualified trusts
that hold more than 10% by value of the shares of a particular real estate
investment trust may be required to treat a specified percentage of these
distributions, including deemed distributions of undistributed long-term capital
gains, as unrelated business taxable income.
Backup withholding
Under the backup withholding rules, a United States stockholder may be
subject to backup withholding at the rate of 31% with respect to dividends paid
on, and gross proceeds from the sale of, the common stock unless such
stockholder (1) is a corporation or comes within other specific exempt
categories and, when required, demonstrates this fact or (2) provides a correct
taxpayer identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules. A United States stockholder who does not provide us with its
current taxpayer identification number may be subject to penalties imposed by
the Commissioner of the Internal Revenue Service. Any amount paid as backup
withholding will be creditable against the stockholder's income tax liability.
We will report to stockholders and the Internal Revenue Service the
amount of any reportable payments, including any dividends paid, and any amount
withheld with respect to the common stock during the calendar year.
State and local tax
Boston Properties and our stockholders may be subject to state and local
tax in various states and localities, including those in which we or our
stockholders transact business, own property or reside. The tax treatment of us
and our stockholders in such jurisdictions may differ from the federal income
tax treatment described above. Consequently, as a prospective investor, you
should consult your own tax advisors regarding the effect of state and local tax
laws on an investment in our common stock.
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REGISTRATION RIGHTS OF THE SELLING STOCKHOLDERS
The following is a summary of the material terms and provisions of the
registration rights and lock-up agreement, which we entered into in connection
with our acquisition of Reservoir Place, an office property located in Waltham,
Massachusetts. It may not contain all the information that is important to you.
You can access complete information by referring to the registration rights and
lock-up agreement.
Under the registration rights and lock-up agreement, we are obligated to
file a registration statement covering the sale by the selling stockholders of
the common stock that they may acquire in exchange for the common units of
Boston Properties Limited Partnership issued in connection with our acquisition
of Reservoir Place. Under the terms of the registration rights and lock-up
agreement, the selling stockholders could not exchange their units for common
stock until after November 13, 1999. Under the registration rights and lock-up
agreement, we must use reasonable efforts to cause the registration statement to
be declared effective by the Securities and Exchange Commission and to keep the
registration statement continuously effective until the earlier of:
. the date on which the selling stockholders no longer hold any
exchanged common stock or any units issued in connection with
the acquisition or
. the date on which all of the exchanged common stock held or
acquired in the future by the selling stockholders has become
eligible for sale under Rule 144(k) of the Securities Act of
1933.
Any common stock sold by the selling stockholders pursuant to this prospectus
will no longer be entitled to the benefits of the registration rights and
lock-up agreement.
The registration rights and lock-up agreement requires that we bear all
expenses of registering the common stock with the exception of brokerage and
underwriting commissions and taxes of any kind and any legal, accounting and
other expenses incurred by the selling stockholders. We also agreed to indemnify
the selling stockholders and their officers, directors and other affiliated
persons and any person who controls the selling stockholders against all losses,
claims, damages, actions, liabilities, costs and expenses arising under the
securities laws in connection with the registration statement or this
prospectus, subject to limitations specified in the registration rights and
lock-up agreement. In addition, the selling stockholders agreed to indemnify us
and our directors, officers and any person who controls our company against all
losses, claims, damages, actions, liabilities, costs and expenses arising under
the securities laws if they result from:
. written information furnished to us by the selling stockholders
for use in the registration statement or this prospectus or any
amendments to the registration statement or any prospectus
supplements or
. the selling stockholders' failure to deliver, or cause to be
delivered, this prospectus or any amendments or prospectus
supplements to any purchaser of common stock covered by this
prospectus from the selling stockholders through no fault of
ours.
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THE SELLING STOCKHOLDERS
The following table sets forth the number of shares of common stock and
units beneficially owned by the selling stockholders as of November 4, 1999, the
number of shares of common stock covered by this prospectus and the total number
of shares of common stock and units which the selling stockholders will
beneficially own upon completion of this offering. Except as noted, this table
assumes that the selling stockholders exchange for common stock all of the units
issued by Boston Properties Limited Partnership in connection with our
acquisition of Reservoir Place, an office property located in Waltham,
Massachusetts and that the selling stockholders offer for sale all of those
shares of common stock.
The common stock offered by this prospectus may be offered from time to
time by the selling stockholders named below, or by any of their pledgees,
donees, transferees or other successors in interest. The amounts set forth below
are based upon information provided to us by representatives of the selling
stockholders, or on our records, as of November 4, 1999 and are accurate to the
best of our knowledge. It is possible, however, that the selling stockholders
may acquire or dispose of additional shares of common stock or units from time
to time after the date of this prospectus.
<TABLE>
<CAPTION>
Common Stock Units
Beneficially Beneficially Common Stock and
Owned as of Owned as of Common Stock Units to be Owned
Name November 4, 1999(1) November 4, 1999(2) Offered Hereby(3) After Offering(4)
---- ------------------- ------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Tofias Family General Partnership 0 534,156 534,156 0
DT Real Estate, Inc. 0 9,331 9,331 0
Medfield Industrial Park Limited Partnership 0 139,959 139,959 0
ABT Real Estate Limited Partnership 0 249,639 249,639 0
TOTAL 0 933,085 933,085 0
= ======= ======= =
</TABLE>
- --------------------------
(1) Does not include common stock that may be issued in exchange for units
beneficially held as of November 4, 1999.
(2) All units listed in this column may be exchanged, under circumstances
set forth in the partnership agreement of Boston Properties Limited
Partnership, for an equal number of shares of common stock. All
information is as of November 4, 1999.
(3) These shares of common stock represent the common stock that the selling
stockholders may acquire upon presentation of the units for redemption.
Such redemption may occur at any time after November 13, 1999.
(4) Assumes that all common stock issuable upon redemption of the units will
be sold by the selling stockholders. The percentage of our common stock
that will be held by the selling stockholders (assuming all remaining
units held by the selling stockholders are presented for redemption and
are exchanged for common stock) after completion of this offering will
be less than one percent (1%). The total number of shares of common
stock outstanding used in calculating such percentage (i) is based on
the total number of shares of common stock outstanding as of November 4,
1999 (67,904,697.8 shares) and (ii) assumes that none of the remaining
units held by other persons will be exchanged for common stock.
33
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds of the sale by the selling
stockholders of the common stock covered by this prospectus.
PLAN OF DISTRIBUTION
This prospectus relates to the possible sale from time to time of up to
an aggregate of 933,085 shares of common stock by the selling stockholders, or
any of their pledgees, donees, transferees or other successors in interest. If
the selling stockholders present units to Boston Properties Limited Partnership
for redemption, we may, at our election, acquire such units in exchange for
common stock in accordance with the terms of Boston Properties Limited
Partnership's agreement of limited partnership, as amended. We are registering
the common stock pursuant to our obligations under the registration rights and
lock-up agreement, but the registration of the common stock does not necessarily
mean that any of the common stock will be offered or sold by the selling
stockholders.
The distribution of the common stock may be effected from time to time
in one or more underwritten transactions at a fixed price or prices, which may
be changed, or at market prices prevailing at the time of sale, at prices
related to prevailing market prices or at negotiated prices. Any underwritten
offering may be on a "best efforts" or a "firm commitment" basis. In connection
with any underwritten offering, underwriters or agents may receive compensation
in the form of discounts, concessions or commissions from the selling
stockholders. Underwriters may sell the common stock to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents.
The selling stockholders and any underwriters, dealers or agents that
participate in the distribution of the common stock may be deemed to be
underwriters under the Securities Act of 1933, and any profit on the sale of the
common stock by them and any discounts, commissions or concessions received by
any underwriters, dealers or agents might be deemed to be underwriting discounts
and commissions under the Securities Act of 1933. At any time a particular offer
of common stock is made by the selling stockholders, a prospectus supplement, if
required, will be distributed that will, where applicable:
. identify any underwriter, dealer or agent;
. describe any compensation in the form of discounts, concessions,
commissions or otherwise received by each underwriter, dealer or
agent and in the aggregate to all underwriters, dealers and
agents;
. identify the amounts underwritten;
. identify the nature of the underwriter's obligation to take the
common stock; and
. provide any other required information.
The sale of common stock by the selling stockholders may also be
effected by selling common stock directly to purchasers or to or through
broker-dealers. In connection with any such sale, any such broker-dealer may act
as agent for the selling stockholders or may purchase from the selling
stockholders all or a portion of the common stock as principal, and may be made
pursuant to any of the methods described below. Such sales may be made on the
New York Stock Exchange or other exchanges on which the common stock are then
traded, in the over-the-counter market, in negotiated transactions or otherwise
at prices and at terms then prevailing or at prices related to the then-current
market prices or at prices otherwise negotiated.
34
<PAGE>
Common stock may also be sold in one or more of the following
transactions:
. block transactions in which a broker-dealer may sell all or a
portion of such shares as agent but may position and resell all
or a portion of the block as principal to facilitate the
transaction;
. purchases by any such broker-dealer as principal and resale by
such broker-dealer for its own account pursuant to any
supplement to this prospectus;
. a special offering, an exchange distribution or a secondary
distribution in accordance with applicable New York Stock
Exchange or other stock exchange rules;
. ordinary brokerage transactions and transactions in which any
such broker-dealer solicits purchasers;
. sales "at the market" to or through a market maker or into an
existing trading market, on an exchange or otherwise, for such
shares; and
. sales in other ways not involving market makers or established
trading markets, including direct sales to purchasers.
In effecting sales, broker-dealers engaged by the selling stockholders
may arrange for other broker-dealers to participate. Broker-dealers will receive
commissions or other compensation from the selling stockholders in amounts to be
negotiated immediately prior to the sale that will not exceed those customary in
the types of transactions involved. Broker-dealers may also receive compensation
from purchasers of the common stock which is not expected to exceed that
customary in the types of transactions involved.
To comply with applicable state securities laws, the common stock will
be sold, if necessary, in such jurisdictions only through registered or licensed
brokers or dealers. In addition, common stock may not be sold in some states
unless they have been registered or qualified for sale in the state or an
exemption from such registration or qualification requirement is available and
is complied with.
All expenses relating to the offering and sale of the common stock,
other than commissions, discounts and fees of underwriters, broker-dealers or
agents, will be paid by us. We have agreed to indemnify the selling stockholders
against some losses, claims, damages, actions, liabilities, costs and expenses,
including liabilities under the Securities Act of 1933. See "Registration Rights
of the Selling Stockholders," beginning on page 32.
35
<PAGE>
EXPERTS
The financial statements of Boston Properties, Inc. as of December 31,
1998 and 1997 for the year ended December 31, 1998 and for the period from June
23, 1997 to December 31, 1997, and of The Boston Properties Predecessor Group
for the year ended December 31, 1996, and for the period from January 1, 1997 to
June 22, 1997 and the Statement of Revenue over certain operating expenses of
Reservoir Place for the year ended December 31, 1997 and the Statement of
Revenue over certain operating expenses of University Place for the year ended
September 30, 1997 included in the Current Report on Form 8-K/A of Boston
Properties, Inc., filed on January 26, 1999 (which amended a Current Report on
Form 8-K dated November 12, 1998), all incorporated by reference in this
prospectus, have been so included in reliance upon the reports of
PricewaterhouseCoopers LLP, independent accountants given on the authority of
said firm as experts in accounting and auditing.
The combined statement of revenues over certain operating expenses of
Embarcadero Center Portfolio for the year ended December 31, 1997 included in
Form 8-K/A which is incorporated herein by reference, have been so included in
reliance upon the report of KPMG LLP, independent accountants, given on the
authority of said firm as experts in accounting and auditing. The report of KPMG
LLP contains a paragraph that states that the combined statement of revenues
over certain operating expenses was prepared for the purpose of complying with
the requirements of Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission and excludes certain expenses that would not be comparable to those
resulting from the proposed future operations of the properties. It is not
intended to be a complete presentation of the operations of the properties.
LEGAL MATTERS
Certain legal matters, including the validity of the common stock
offered through this prospectus, will be passed upon for us by Goodwin, Procter
& Hoar LLP. Gilbert G. Menna, the sole stockholder of Gilbert G. Menna, P.C., a
partner of Goodwin, Procter & Hoar LLP, serves as an Assistant Secretary of
Boston Properties. Certain partners of Goodwin, Procter & Hoar LLP or their
affiliates, together with Mr. Menna, own approximately 20,000 shares of the our
common stock. Goodwin, Procter & Hoar LLP occupies approximately 26,000 square
feet at 599 Lexington Avenue, New York, NY under a lease with Boston Properties
that expires in 2002.
VALIDITY OF COMMON STOCK
The validity of the common stock we are offering will be passed upon for
us by Goodwin, Procter & Hoar LLP, Boston, Massachusetts.
36
<PAGE>
================================================================================
You should rely only on the information contained in this prospectus,
incorporated herein by reference or contained in a prospectus supplement.
Neither we nor the selling stockholders have authorized anyone else to provide
you with different or additional information. The selling stockholders are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus, or
incorporated herein by reference, or in any prospectus supplement is accurate as
of any date other than the date on the front of those documents.
-----------------
TABLE OF CONTENTS
Page
----
Prospectus Summary..................................................... 2
Risk Factors........................................................... 4
Where You Can Find More Information.................................... 17
Incorporation of Documents By Reference................................ 17
Forward-Looking Statements............................................. 18
Our Company............................................................ 19
Description of Common Stock............................................ 20
Limits on Ownership of Our Stock....................................... 24
Important Provisions of Delaware Law and
Our Certificate of Incorporation and Bylaws......................... 26
Federal Income Tax Considerations and
Consequences of Your Investment..................................... 29
Registration Rights of the Selling Stockholders........................ 32
The Selling Stockholders............................................... 33
Use of Proceeds........................................................ 34
Plan of Distribution................................................... 34
Experts................................................................ 36
Legal Matters.......................................................... 36
Validity of Common Stock............................................... 36
-----------------
933,085 Shares
of Common Stock
Boston Properties, Inc.
-----------------
Prospectus
-----------------
[___]
================================================================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
-------------------------------------------
The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee are estimated):
Registration fee -- Securities and Exchange Commission...... $ 7,377
Accountants' fees and expenses.............................. 5,000
Blue Sky fees and expenses.................................. 1,500
Legal fees and expenses (other than Blue Sky)............... 7,500
Printing expenses........................................... 2,000
Miscellaneous............................................... 1,623
TOTAL....................................................... $25,000
=======
All expenses in connection with the issuance and distribution of the
securities being offered shall be borne by Boston Properties, Inc.
Item 15. Indemnification of Directors and Officers.
-----------------------------------------
Our certificate of incorporation and bylaws provide certain limitations
on the liability of our directors and officers for monetary damages to Boston
Properties. Our certificate of incorporation and bylaws obligate Boston
Properties to indemnify its directors and officers, and permit Boston Properties
to indemnify its employees and other agents, against certain liabilities
incurred in connection with their service in such capacities. These provisions
could reduce the legal remedies available to Boston Properties and our
stockholders against these individuals.
Our certificate of incorporation limits the liability of our directors
and officers to Boston Properties to the fullest extent permitted from time to
time by the Delaware General Corporation Law. The Delaware General Corporation
Law permits, but does not require, a corporation to indemnify its directors,
officers, employees or agents and expressly provides that the indemnification
provided for under the Delaware General Corporation Law shall not be deemed
exclusive of any indemnification right under any bylaw, vote of stockholders or
disinterested directors, or otherwise. The Delaware General Corporation Law
permits indemnification against expenses and certain other liabilities arising
out of legal actions brought or threatened against such persons for their
conduct on behalf of the corporation, provided that each such person acted in
good faith and in a manner that he reasonably believed was in or not opposed to
the corporation's best interests and in the case of a criminal proceeding, had
no reasonable cause to believe his or her conduct was unlawful. The Delaware
General Corporation Law does not allow indemnification of directors in the case
of an action by or in the right of the corporation (including stockholder
derivative suits) unless the directors successfully defend the action or
indemnification is ordered by the court.
Our certificate of incorporation contains a provision permitted by
Delaware law that generally eliminates the personal liability of directors for
monetary damages for breaches of their fiduciary duty, including breaches
involving negligence or gross negligence in business combinations, unless the
director has breached his or her duty of loyalty, failed to act in good faith,
engaged in intentional misconduct or a knowing violation of law, paid a dividend
or approved a stock repurchase in violation of the Delaware General Corporation
Law or obtained an improper personal benefit. The provision does not alter a
director's liability under the federal securities laws. In addition, this
provision does not affect the availability of equitable remedies, such as an
injunction or rescission, for breach of fiduciary duty.
Our bylaws provide that our directors and officers will be, and, in the
discretion of the board of directors, non-officer employees may be, indemnified
by us to the fullest extent authorized by Delaware law, as it now exists or may
in the future be amended, against all expenses and liabilities actually and
reasonably incurred in connection with service for or on behalf of Boston
Properties. Our bylaws also provide that the right of directors and officers to
indemnification shall be a contract right and shall not
II-1
<PAGE>
be exclusive of any other right now possessed or hereafter acquired under any
bylaw, agreement, vote of stockholders, or otherwise.
We have entered into indemnification agreements with each of our
directors and executive officers. The indemnification agreements require, among
other matters, that we indemnify our directors and officers to the fullest
extent permitted by law and advance to the directors and officers all related
expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. Under these agreements, we must also indemnify
and advance all expenses incurred by directors and officers seeking to enforce
their rights under the indemnification agreements and may cover directors and
officers under our directors' and officers' liability insurance. Although the
form of indemnification agreement offers substantially the same scope of
coverage afforded by law, it provides additional assurance to directors and
officers that indemnification will be available because, as a contract, it
cannot be modified unilaterally in the future by the board of directors or our
stockholders to eliminate the rights it provides. It is the position of the SEC
that indemnification of directors and officers for liabilities under the
Securities Act is against public policy and unenforceable pursuant to Section 14
of the Securities Act.
Item 16. Exhibits.
--------
4.1 Amended and Restated Certificate of Incorporation of Boston Properties,
Inc. (incorporated herein by reference to Boston Properties, Inc.'s
Registration Statement on Form S-11 (File No. 333-25279)).
4.2 Amended and Restated Bylaws of Boston Properties, Inc. (incorporated
herein by reference to Boston Properties, Inc.'s Registration Statement on
Form S-11 (File No. 333-25279)).
4.3 Second Amended and Restated Agreement of Limited Partnership of Boston
Properties Limited Partnership (incorporated herein by reference to Boston
Properties, Inc.'s Current Report on Form 8-K dated June 30, 1998, filed
with the Commission on July 15, 1998).
4.4 Shareholder Rights Agreement dated as of June 16, 1997 between Boston
Properties, Inc. and BankBoston, N.A., as Rights Agent (incorporated
herein by reference to Boston Properties, Inc.'s Registration Statement on
Form S-11 (File No. 333-25279)).
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities and interests being registered.
*8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.
*23.1 Consent of PricewaterhouseCoopers LLP, Independent Public Accountants.
*23.2 Consent of KPMG LLP, Independent Public Accountants.
*23.3 Consent of Goodwin, Procter & Hoar LLP (included as part of Exhibits 5.1
and 8.1).
*24.1 Powers of Attorney (included on the signature page of the Registration
Statement as filed).
*99.1 Registration Rights and Lock-Up Agreement, dated November 3, 1998, as
amended, by and between Boston Properties, Inc., and the selling
stockholders.
- ---------------------------
* Filed herewith
Item 17. Undertakings.
------------
(a) Boston Properties, Inc. hereby undertakes:
(1) To file, during any period in which offers or sales are being
made pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement:
II-2
<PAGE>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in this Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in
this Registration Statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by Boston Properties pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Boston Properties hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Boston Properties' annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of Boston Properties pursuant to the foregoing provisions, or otherwise,
Boston Properties has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by Boston Properties of expenses incurred or paid by a director, officer
or controlling person of Boston Properties in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, Boston Properties
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Boston
Properties, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston, the Commonwealth of Massachusetts, on
this 19th day of November, 1999.
BOSTON PROPERTIES, INC.
By: /s/ Edward H. Linde
------------------------------
Name: Edward H. Linde
Title: President and Chief
Executive Officer
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints each of Mortimer B. Zuckerman, Edward H. Linde
and David G. Gaw as such person's true and lawful attorney-in-fact and agent
with full power of substitution and resubstitution, for such person in such
person's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
(or any Registration Statement for the same offering that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to
file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that any said attorney-in-fact
and agent, or any substitute or substitutes of any of them, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Mortimer B. Zuckerman Chairman of the Board of Directors November 19, 1999
- -------------------------------
Mortimer B. Zuckerman
/s/ Edward H. Linde President and Chief Executive Officer, November 19, 1999
- ------------------------------- Director (Principal Executive Officer)
Edward H. Linde
/s/ David G. Gaw Chief Financial Officer (Principal Financial November 19, 1999
- ------------------------------- Officer and Principal Accounting Officer)
David G. Gaw
/s/ Alan J. Patricof Director November 19, 1999
- -------------------------------
Alan J. Patricof
/s/ Ivan G. Seidenberg Director November 19, 1999
- -------------------------------
Ivan G. Seidenberg
/s/ Martin Turchin Director November 19, 1999
- -------------------------------
Martin Turchin
/s/ Alan B. Landis Director November 19, 1999
- -------------------------------
Alan B. Landis
/s/ Richard E. Salomon Director November 19, 1999
- -------------------------------
Richard E. Salomon
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 Amended and Restated Certificate of Incorporation of Boston
Properties, Inc. (incorporated herein by reference to Boston
Properties, Inc.'s Registration Statement on Form S-11 (File No.
333-25279)).
4.2 Amended and Restated Bylaws of Boston Properties, Inc. (incorporated
herein by reference to Boston Properties, Inc.'s Registration
Statement on Form S-11 (File No. 333-25279)).
4.3 Second Amended and Restated Agreement of Limited Partnership of
Boston Properties Limited Partnership (incorporated herein by
reference to Boston Properties, Inc.'s Current Report on Form 8-K
dated June 30, 1998, filed with the Commission on July 15, 1998).
4.4 Shareholder Rights Agreement dated as of June 16, 1997 between
Boston Properties, Inc. and BankBoston, N.A., as Rights Agent
(incorporated herein by reference to Boston Properties, Inc.'s
Registration Statement on Form S-11 (File No. 333-25279)).
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities and interests being registered.
*8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.
*23.1 Consent of PricewaterhouseCoopers LLP, Independent Public
Accountants.
*23.2 Consent of KPMG LLP, Independent Public Accountants.
*23.3 Consent of Goodwin, Procter & Hoar LLP (included as part of Exhibits
5.1 and 8.1).
*24.1 Powers of Attorney (included on the signature page of the
Registration Statement as filed).
*99.1 Registration Rights and Lock-Up Agreement, dated November 3, 1998,
as amended, by and between Boston Properties, Inc. and the selling
stockholders.
- ----------------------
* Filed herewith
<PAGE>
EXHIBIT 5.1
GOODWIN, PROCTER & HOAR LLP
COUNSELORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
November 19, 1999
Boston Properties, Inc.
800 Boylston Street
Boston, MA 02199
Ladies and Gentlemen:
This opinion is furnished in connection with the registration on Form
S-3 (the "Registration Statement") pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), of the resale of up to 933,085 shares (the
"Shares") of common stock, par value $.01 per share ("Common Stock"), of Boston
Properties, Inc. (the "Company") by holders thereof, if and to the extent that
the Company elects to issue such shares to such holders to acquire common units
of limited partnership interests ("Units") in Boston Properties Limited
Partnership, a Delaware limited partnership (the "Operating Partnership").
In connection with rendering this opinion, we have examined the Amended
and Restated Certificate of Incorporation and Amended and Restated Bylaws of the
Company, each as amended to date; such records of the corporate proceedings of
the Company as we deemed material; and such other certificates, receipts,
records and documents as we considered necessary for the purposes of this
opinion. In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as certified, photostatic or facsimile copies, the authenticity
of the originals of such copies and the authenticity of telephonic confirmations
of public officials and others. As to facts material to our opinion, we have
relied upon certificates or telephonic confirmations of public officials and
certificates, documents, statements and other information of the Company or
representatives or officers thereof.
We are attorneys admitted to practice in The Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdictions
other than the laws of the United States of America, the laws of The
Commonwealth of Massachusetts, and the Delaware General Corporation Law.
<PAGE>
Boston Properties, Inc.
November 19, 1999
Page 2
Based upon the foregoing, we are of the opinion that when the Shares
have been issued in exchange for Units tendered to the Operating Partnership for
redemption as contemplated by the limited partnership agreement of the Operating
Partnership, such Shares will be validly issued, fully paid and nonassessable.
The foregoing assumes that all requisite steps were taken to comply with
the requirements of the Securities Act and applicable requirements of state laws
regulating the offer and sale of securities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us with respect to this opinion
under the heading "Legal Matters" in the Prospectus which is a part of such
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
Goodwin, Procter & Hoar LLP
<PAGE>
EXHIBIT 8.1
GOODWIN, PROCTER & HOAR LLP
COUNSELORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
November 19, 1999
Boston Properties, Inc.
800 Boylston Street
Boston, MA 02119
Re: Federal Income Tax Matters
--------------------------
Ladies and Gentlemen:
This opinion is furnished to you in our capacity as counsel to Boston
Properties, Inc., a Delaware corporation (the "Company"), regarding the
Company's qualification for federal income tax purposes as a real estate
investment trust within the meaning of Sections 856-860 of the Internal Revenue
Code of 1986, as amended (the "Code"). This opinion is rendered in connection
with the registration on Form S-3 (the "Registration Statement") pursuant to the
Securities Act of 1933, as amended, of the resale of up to 933,085 shares of
common stock, par value $.01 per share, of the Company by holders thereof, if
and to the extent that the Company elects to issue such shares to such holders
to acquire common units of limited partnership interests in Boston Properties
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership").
In rendering the following opinion, we have examined the Amended and
Restated Certificate of Incorporation and Bylaws of the Company, the
Registration Statement, the Amended and Restated Limited Partnership Agreement
of the Operating Partnership, and such other records, certificates and documents
as we have deemed necessary or appropriate for purposes of rendering the opinion
set forth herein. We have reviewed the investment activities, operations and
governance of the Company and its subsidiaries. We have relied upon
representations of duly appointed officers of the Company and the Operating
Partnership (including without limitation, representations contained in a letter
dated as of this date (the "Officer's Certificate")), principally relating to
the Company's organization and operations. We assume that each such
representation is and will be true, correct and complete and that all
representations that speak in the future, or to the intention, or to the best of
the belief and knowledge of any person(s) or party(ies) are and will be true,
correct and complete as if made without such qualification. Nothing has come to
our attention which would cause us to believe
<PAGE>
Boston Properties, Inc.
November 19, 1999
Page 2
that any of such representations are untrue, incorrect or incomplete. We assume
that the Company will be operated in accordance with the applicable laws and the
terms and conditions of applicable documents. In addition, we have relied upon
certain additional facts and assumptions described below.
In rendering the opinion set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to us as originals, (iii) the conformity
to the original documents of all documents submitted to us as copies, (iv) the
conformity of final documents to all documents submitted to us as drafts, (v)
the authority and capacity of the individual or individuals who executed any
such documents on behalf of any person, (vi) the accuracy and completeness of
all records made available to us, and (vii) the factual accuracy of all
representations, warranties and other statements made by all parties. In
addition, we assume that all interests in the Operating Partnership have been
and will be issued in a transaction (or transactions) that are not required to
be registered under the Securities Act of 1933, as amended, and that no interest
in the Operating Partnership offered for sale outside the United States would
have been required to be registered under the Securities Act of 1933, as
amended, if such interest had been offered for sale within the United States. We
have further assumed that during its short 1997 taxable year ending December 31,
1997 and subsequent taxable years, the Company has operated and will operate in
such a manner that has made and will make the representations contained in the
Officer's Certificate true for all such years, and that the Company and its
subsidiaries will not make any amendments to its organizational documents after
the date of this opinion that would affect the Company's qualification as a real
estate investment trust for any taxable year. For purposes of our opinion, we
have made no independent investigation of the facts contained in the documents
and assumptions set forth above, the representations set forth in the Officer's
Certificate, or the Registration Statement. No facts have come to our attention,
however, that would cause us to question the accuracy and completeness of such
facts or documents in a material way.
The discussion and conclusion set forth below are based upon the Code,
the Income Tax Regulations and Procedure and Administration Regulations
promulgated thereunder and administrative and judicial interpretation
thereof, in each case as currently exist and all of which are subject to change,
and the opinions below are rendered as of the date hereof, and we disclaim any
obligation to advise you of any change in any of the foregoing sources of law or
subsequent developments in law or changes in facts or circumstances which might
affect any matters or opinions set forth herein. No assurance can therefore be
given that the federal income tax consequences described below will not be
altered in the future. Based on the documents and assumptions set forth above
and the representations set forth in the Officer's Certificate, and provided
that the Company continues to meet the applicable asset composition, source of
income, shareholder diversification, distribution, and other requirements of the
Code necessary for a corporation to qualify as a real estate investment trust,
we are of the opinion that:
<PAGE>
Boston Properties, Inc.
November 19, 1999
Page 3
(1) Commencing with the Company's initial taxable year ended December
31, 1997, the Company has been organized in conformity with the requirements for
qualification as a "real estate investment trust" under the Code, and its method
of operation enables it to meet the requirements for qualification as a "real
estate investment trust" under the Code, provided that the Company continues to
meet the applicable asset composition, source of income, shareholder
diversification, distribution, record keeping and other requirements of the Code
necessary for a corporation to qualify as a real estate investment trust, and
(2) The information in the Registration Statement under the caption
"Certain Federal Income Tax Considerations and Consequences of Your Investment"
to the extent that it constitutes matters of law or legal conclusions, have been
reviewed by us and is correct in all material respects, and our opinion set
forth in such discussion is confirmed.
We will not review on a continuing basis the Company's compliance with
the documents or assumptions set forth above, or the representations set forth
in the Officer's Certificate. Accordingly, no assurance can be given that the
actual results of the Company's operations for any given taxable year will
satisfy the requirements for qualification and taxation as a real estate
investment trust under the Code. The ability of the Company to continue to meet
the requirements for qualification and taxation as a real estate investment
trust will be dependent upon the Company's ability to continue to meet in each
year the applicable asset composition, source of income, shareholder
diversification, distribution, and other requirements of the Code necessary for
a corporation to qualify as a real estate investment trust. The foregoing
opinion is limited to the federal income tax matters addressed herein, and no
other opinion is rendered with respect to other federal tax matters or to any
issues arising out of the tax laws of any state or locality. We express no
opinion with respect to the transactions described herein other than those
expressly set forth herein. You should recognize that our opinion is not binding
on the Internal Revenue Service and that the Internal Revenue Service may
disagree with the opinion contained herein. Although we believe that our opinion
will be sustained if challenged, there is no guarantee that this will be the
case. Except as specifically discussed above, the opinion expressed herein is
based upon the laws that currently exist. Consequently, future changes in the
law may cause the federal income tax treatment of the transactions herein to be
materially and adversely different from that described above.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Federal Income Tax Considerations and Consequences of Your Investment" in the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section
<PAGE>
Boston Properties, Inc.
November 19, 1999
Page 4
7 of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
Goodwin, Procter & Hoar LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in this Form
S-3 Registration Statement of Boston Properties, Inc. and to the incorporation
by reference therein of our reports indicated below with respect to the
financial statements indicated below of Boston Properties, Inc.
Date of
Independent
Financial Statements Accountant's Report
-------------------- -------------------
Financial statements of Boston Properties, Inc. January 24, 1999
as of December 31, 1998 and 1997 and for the except for Note 16
year ended December 31, 1998 and for the period as to which the date
from June 23, 1997 to December 31, 1997, and is February 10, 1999.
of The Boston Properties Predecessor Group for
the year ended December 31, 1996, and for the
period from January 1, 1997 to June 22, 1997
Financial statement schedule of Boston Properties, January 24, 1999
Inc. as of December 31, 1998.
Statement of revenue over certain operating December 11, 1998
expenses of University Place for the year ended
September 30, 1997
Statement of revenue over certain operating December 18, 1998
expenses of Reservoir Place for the year ended
December 31, 1997
Boston, Massachusetts /s/ PricewaterhouseCoopers LLP
November 19, 1999
<PAGE>
EXHIBIT 23.2
Consent of Independent Public Accountants
The Board of Directors and Stockholders of
Boston Properties, Inc.
We consent to the incorporation by reference in the registration statement and
related prospectus dated November 22, 1999 on Form S-3 of Boston Properties,
Inc. of our report dated December 18, 1998 relating to the combined statement of
revenues over certain operating expenses of Embarcadero Center Portfolio for the
year ended December 31, 1997, which report appears in Form 8-K/A filed on
January 26, 1999, which amended a Form 8-K dated November 12, 1998. Our report
on the combined statement of revenues over certain operating expenses contains a
paragraph that states that the combined statement of revenues over certain
operating expenses was prepared for the purpose of complying with the
requirements of Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission and excludes certain expenses that would not be comparable to those
resulting from the proposed future operations of the properties. It is not
intended to be a complete presentation of the operations of the properties.
/s/ KPMG LLP
San Francisco, California
November 22, 1999
<PAGE>
EXHIBIT 99.1
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
BY AND BETWEEN
BOSTON PROPERTIES, INC.
AND THE
HOLDERS NAMED HEREIN
Date: November 3, 1998
<PAGE>
TABLE OF CONTENTS
Page
1. Certain Definitions......................................................1
2. Lock-up Agreement........................................................3
3. Registration.............................................................4
4. State Securities Laws....................................................8
5. Expenses.................................................................9
6. Indemnification by the Company...........................................9
7. Covenants of Holders....................................................10
8. Suspension of Registration Requirement: Restriction on Sales............10
9. Black-Out Period........................................................11
10. Additional Shares.......................................................12
11. Contribution............................................................12
12. No Other Obligation to Register.........................................13
13. Amendments and Waivers..................................................13
14. Notices.................................................................13
15. Successors and Assigns..................................................14
16. Counterparts............................................................15
17. Governing Law...........................................................15
18. Severability............................................................15
19. Entire Agreement........................................................15
<PAGE>
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
-----------------------------------------
This Registration Rights and Lock-Up Agreement (this "Agreement") is
entered into as of November 3, 1998 by and among Boston Properties, Inc., a
Delaware corporation (the "Company"), and Reservoir Place Limited Partnership
Associates, a Massachusetts limited partnership (a "Holder").
WHEREAS, concurrently herewith the Holder is receiving common units of
limited partnership interest ("Units") in Boston Properties Limited Partnership
(the "Operating Partnership"), which Units may be exchanged, at a later date or
dates and subject to certain conditions set forth in the Limited Partnership
Agreement of the Operating Partnership, for shares of common stock of the
Company, $.01 par value ("Common Shares"), in each case issued or to be issued
without registration under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to that certain Real Estate Contribution and
Exchange Agreement dated August 7, 1998, as amended (the "Contribution
Agreement"), between the Operating Partnership, the Company, the Holder and
certain other parties; and
WHEREAS, it is a condition precedent to the obligations of the Holder to
consummate the transactions described in the Contribution Agreement that the
Company provide the Holder with the registration rights set forth in Section 3
hereof.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
and agreements set forth herein, and other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Certain Definitions.
-------------------
As used in this Agreement, in addition to the other terms defined
herein, the following capitalized defined terms shall have the following
meanings:
"Accredited Investor" shall mean a Person who qualifies as an
-------------------
"accredited investor" under Rule 501 of the Securities Act.
"NASD" shall mean the National Association of Securities Dealers, Inc.
----
"Person" shall mean an individual, partnership, corporation, trust, or
------
unincorporated organization, or a government or agency or political subdivision
thereof.
"Permitted Distributee" means a direct or indirect holder, as of the
---------------------
date hereof, of equity interests in Reservoir Place Limited Partnership
Associates, but only if such Person is listed on Schedule A hereto.
<PAGE>
-2-
"Prospectus" shall mean the prospectus included in a Registration
----------
Statement, including any preliminary prospectus, as amended or supplemented by
any prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement, and by
all other amendments and supplements to such prospectus, including
post-effective amendments, and in each case including all material incorporated
by reference therein.
"Registrable Shares" (a) when used with respect to a Holder, shall mean
------------------
the Shares of such Holder, excluding (i) Shares for which a Registration
Statement relating to the sale thereof shall have become effective under the
Securities Act and which have been issued or disposed of under such Registration
Statement, (ii) Shares sold pursuant to Rule 144 or (iii) Shares eligible for
sale pursuant to Rule 144(k) (or any successor provision) and (b) when used
without reference to a Holder, shall mean the Registrable Shares of all Holders.
"Registration Expenses" shall mean any and all expenses incident to
---------------------
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing fees; (ii) all fees
and expenses incurred in connection with compliance with state securities or
"blue sky" laws (including reasonable fees and disbursements of counsel in
connection with "blue sky" qualification of any of the Registrable Shares and
the preparation of a Blue Sky Memorandum) and compliance with the rules of the
NASD; (iii) all expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Registration Statement, any
Prospectus, certificates and other documents relating to the performance of and
compliance with this Agreement; (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Shares on any
securities exchange or exchanges pursuant to Section 5 hereof, and (v) the fees
and disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audit or "cold
comfort" letters required by or incident to such performance and compliance.
Registration Expenses shall specifically exclude underwriting discounts and
commissions relating to the sale or disposition of Registrable Shares by a
selling Holder, the fees and disbursements of counsel representing a selling
Holder, and transfer taxes, if any, relating to the sale or disposition of
Registrable Shares by a selling Holder, all of which shall be borne by such
Holder in all cases.
"Registration Statement" shall mean any registration statement of the
----------------------
Company which covers the issuance or resale of any of the Registrable Shares on
an appropriate form, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all materials
incorporated by reference therein.
"Rule 144" means Rule 144 under the Securities Act (or any successor
--------
provision).
"SEC" shall mean the Securities and Exchange Commission.
---
<PAGE>
-3-
"Shares" (a) when used with respect to a Holder, shall mean any Common
------
Shares issuable to the Holder upon redemption or in exchange for Units held by
such Holder, and (b) when used without reference to a Holder, shall mean the
Shares of all Holders.
2. Lock-up Agreement.
-----------------
(a) Each Holder hereby agrees that, except as set forth in Section
2(b) below, for a period of three hundred seventy five (375) days from the date
hereof (the "Lock-up Period"), without the prior written consent of the Company,
such Holder will not offer, pledge, sell, contract to sell, grant any options
for the sale of, seek the redemption or exchange of, or otherwise dispose of,
directly or indirectly (collectively "Dispose of"), any Units (the "Lock-up").
(b) The following Dispositions of Units shall not be subject to the
Lock-up set forth in Section 2(a):
(i) a Holder who is a natural person may Dispose of
Units to his or her spouse, siblings, parents or any natural or
adopted children or other descendants or to any personal trust in
which any such family member or such Holder retains the entire
beneficial interest;
(ii) a Holder may Dispose of Units to a Permitted
Distributee who has submitted to the Company a Representation Letter
in form and substance reasonably satisfactory to the Company (which
Representation Letter shall be substantially similar in form and
substance to the Representation Letter referred to in the
Contribution Agreement) and indicating that such Permitted
Distributee is an Accredited Investor;
(iii) a Holder may Dispose of Units on his or her death
to such Holder's estate, executor, administrator or personal
representative or to such Holder's beneficiaries pursuant to a
devise or bequest or by laws of descent and distribution;
(iv) a Holder may Dispose of Units as a gift or other
transfer without consideration; and
(v) subject to complying with the provisions of
Section 1.2 of the Contribution Agreement, a Holder may Dispose of
Units not pledged to the Company pursuant to the provisions of
Section 7.6 of the Contribution Agreement, pursuant to a pledge,
grant of security interest or other encumbrance effected in a bona
fide transaction with an unrelated and unaffiliated pledgee, and
provided such pledgee agrees that it will not foreclose on such
Units until after the date of expiration of the Lock-up Period;
<PAGE>
-4-
provided, however that in the case of any transfer of Units pursuant to clauses
- --------
(i), (ii), (iv) and (v), the transferor shall, (A) at the request of the
Company, provide evidence satisfactory to the Company that the transfer is
exempt from the registration requirements of the Securities Act and (B) first
obtain the consent of the Company, which consent may be withheld if the Company
reasonably believes that such transfer would be in violation of, or would cause
the issuance of Units by the Operating Partnership to such transferor to be in
violation of, the registration requirements of Section 5 of the Securities Act).
In the event a Holder Disposes of Units described in this Section 2(b),
such Units shall remain subject to this Agreement and, as a condition of the
validity of such disposition, the transferee shall be required to execute and
deliver a counterpart of this Agreement (except that a pledgee shall not be
required to execute and deliver a counterpart of this Agreement until it
forecloses upon such Units). Thereafter, such transferee shall be deemed to be a
Holder for purposes of this Agreement.
3. Registration.
------------
(a) Filing of Resale Shelf Registration Statement. Subject to the
---------------------------------------------
conditions set forth in this Agreement, the Company shall cause to be filed a
Registration Statement under Rule 415 under the Securities Act relating to the
sale by the Holders of all of the Registrable Shares of the Holders in
accordance with the terms hereof, and shall use reasonable efforts to cause such
Registration Statement to be declared effective by the SEC by that date which is
375 days after the date hereof. The Company agrees to use reasonable efforts to
keep the Registration Statement, after its date of effectiveness, continuously
effective with respect to the Registrable Shares of a particular Holder until
the earlier of (a) the date on which such Holder no longer holds any Registrable
Shares or (b) the date on which all of the Registrable Shares held by such
Holder have become eligible for sale pursuant to Rule 144(k) (or any successor
provision) (hereinafter referred to as the "Resale Shelf Registration Expiration
Date").
(b) Registration Statement Covering Issuance of Common Stock. In
--------------------------------------------------------
lieu of the registration rights set forth in Section 3(a) above, the Company
may, in its sole discretion, prior to the first date upon which the Units held
by the Holders may be redeemed (or such other date as may be required under
applicable provisions of the Securities Act) file a registration statement (the
"Issuance Registration Statement") under Rule 415 under the Securities Act
relating to the issuance to Holders of Common Shares upon the redemption of
Units or in exchange for Units. Thereupon, the Company shall use reasonable
efforts to cause such Registration Statement to be declared effective by the SEC
for all Common Shares covered thereby. The Company agrees to use reasonable
efforts to keep the Issuance Registration Statement continuously effective, with
respect to the Registrable Shares of a particular Holder, until the date on
which such Holder has redeemed or exchanged such Holder's Units for Common
Stock. In the event that the
<PAGE>
-5-
Company is unable to cause such Issuance Registration Statement to be declared
effective by the SEC or (except as otherwise permitted by Sections 8(b) and 9)
is unable to keep such Issuance Registration Statement effective until the date
on which each Holder has redeemed or exchanged such Holder's Units for Common
Stock, then the rights of each Holder set forth in Section 3 (a) above shall be
restored.
(c) Demand Registration. Subject to the conditions set forth in this
-------------------
Agreement, at any time after the Resale Shelf Registration Expiration Date, and
while any Registrable Shares are outstanding, the Company shall, at the written
request of any Holder who is unable to sell its Registrable Shares pursuant to
Rule 144(k) (or any successor provision), cause to be filed as soon as
practicable after the date of such request by such Holder a Registration
Statement under Rule 415 under the Securities Act relating to the sale by the
Holder of all of the Registrable Shares held by such Holder in accordance with
the terms hereof, and shall use reasonable efforts to cause such Registration
Statement to be declared effective by the SEC as soon as practicable thereafter.
The Company may, in its sole discretion, elect to file the Registration
Statement before receipt of notice from any Holder. The Company agrees to use
reasonable efforts to keep the Registration Statement continuously effective,
after its date of effectiveness, until the date on which such Holder no longer
holds any Registrable Shares.
(d) Piggyback Registration. If, at any time after the Resale Shelf
----------------------
Registration Expiration Date, and while any Registrable Shares or Units are
outstanding and a Registration Statement applicable to Holder under Sections
3(a), 3(b) or 3(c) is not effective, the Company (in its sole discretion and
without any obligation to do so) proposes to file a registration statement under
the Securities Act with respect to an offering solely of Common Shares solely
for cash (other than a registration statement (i) on Form S-8 or any successor
form to such Form or in connection with any employee or director welfare,
benefit or compensation plan, (ii) on Form S-4 or any successor form to such
Form or in connection with an exchange offer, (iii) in connection with a rights
offering exclusively to existing holders of Common Shares, (iv) in connection
with an offering solely to employees of the Company or its subsidiaries, or (v)
relating to a transaction pursuant to Rule 145 of the Securities Act), for its
own account, the Company shall give prompt written notice of such proposed
filing to the Holders. The notice referred to in the preceding sentence shall
offer Holder the opportunity to register such amount of Registrable Shares as
each Holder may request (a "Piggyback Registration"). Subject to the provisions
of Section 4 below, the Company shall include in such Piggyback Registration, in
the registration and qualification for sale under the blue sky or securities
laws of the various states and in any underwriting in connection therewith all
Registrable Shares for which the Company has received written requests for
inclusion therein within ten (10) calendar days after the notice referred to
above has been given by the Company to the Holders. Holders of Registrable
Shares shall be permitted to withdraw all or part of the Registrable Shares from
a Piggyback Registration at any time prior to the effective date of such
Piggyback Registration. If a Piggyback Registration is an underwritten primary
registration on behalf of the Company and the managing underwriter advises the
Company that the total
<PAGE>
-6-
number of Common Shares requested to be included in such registration exceeds
the number of Common Shares that can be sold in such offering without impairing
the pricing or other commercial practicality of such offering, the Company will
include in such registration in the following priority: (i) first, all Common
Shares the Company proposes to sell, (ii) second, up to the full number of
Common Shares requested to be included in such registration by the holders
identified in that certain Registration Rights and Lock-Up Agreement dated June
23, 1997, as amended from time to time, by and among Boston Properties, Inc. and
such holders, and (iii) third, up to the full number of Common Shares requested
to be included in such registration by the Holders and any other holders of
Common Shares or of Units that may be exchanged for Common Shares who are
parties to similar Registration Rights and Lock-Up Agreements with the Company
(other than the Agreement referred to in clause (ii)), provided that, in the
case of clauses (ii) and (iii) the number of Common Shares to be included will
be based on the number of Common Shares that can be sold in the opinion of such
managing underwriter without adversely affecting the price range or probability
of success of such offering. The number of Common Shares that the managing
underwriter determines is available for purposes of clause (iii) shall be
allocated pro rata among the Holders and the other holders described in clause
(iii) on the basis of the number of Common Shares requested to be included by
them in such registration.
(e) Notification and Distribution of Materials. The Company shall
------------------------------------------
notify each Holder of the effectiveness of any Registration Statement applicable
to the Shares of such Holder and shall furnish to each such Holder such number
of copies of the Registration Statement (including any amendments, supplements
and exhibits), the Prospectus contained therein (including each preliminary
prospectus and all related amendments and supplements) and any documents
incorporated by reference in the Registration Statement or such other documents
as such Holder may reasonably request in order to facilitate its sale of the
Registrable Shares in the manner described in the Registration Statement.
(f) Amendments and Supplements. The Company shall prepare and file
--------------------------
with the SEC from time to time such amendments and supplements to the
Registration Statement and Prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all the
Registrable Shares until the earlier of (a) such time as all of the Registrable
Shares have been issued or disposed of in accordance with the intended methods
of disposition by the Holder or issuance by the Company as set forth in the
Registration Statement or (b) the date on which the Registration Statement
ceases to be effective in accordance with the terms of this Section 3. Upon
twenty (20) business days' notice, the Company shall file any supplement or
post-effective amendment to the Registration Statement with respect to the plan
of distribution or such Holder's ownership interests in Registrable Shares that
is reasonably necessary to permit the sale of the Holder's Registrable Shares
pursuant to the Registration Statement. The Company shall file any necessary
listing applications or amendments to the existing applications to cause
<PAGE>
-7-
the Shares registered under any Registration Statement to be then listed or
quoted on the primary exchange or quotation system on which the Common Shares
are then listed or quoted.
(g) Notice of Certain Events. The Company shall promptly notify each
------------------------
Holder of, and confirm in writing, the filing of the Registration Statement or
any Prospectus, amendment or supplement related thereto or any post-effective
amendment to the Registration Statement and the effectiveness of any
post-effective amendment.
At any time when a Prospectus relating to the Registration Statement is
required to be delivered under the Securities Act by a Holder to a transferee,
the Company shall immediately notify each Holder of the happening of any event
as a result of which the Prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. In such event, the Company shall promptly prepare and furnish to
each applicable Holder a reasonable number of copies of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of Registrable Shares, such Prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading. The
Company will, if necessary, amend the Registration Statement of which such
Prospectus is a part to reflect such amendment or supplement.
4. State Securities Laws.
---------------------
Subject to the conditions set forth in this Agreement, the Company
shall, in connection with the filing of any Registration Statement hereunder,
file such documents as may be necessary to register or qualify the Registrable
Shares under the securities or "Blue Sky" laws of such states as any Holder may
reasonably request, and the Company shall use its best efforts to cause such
filings to become effective; provided, however, that the Company shall not be
--------
obligated to qualify as a foreign corporation to do business under the laws of
any such state in which it is not then qualified or to file any general consent
to service of process in any such state. Once effective, the Company shall use
its best efforts to keep such filings effective until the earlier of (a) such
time as all of the Registrable Shares have been disposed of in accordance with
the intended methods of disposition by the Holder as set forth in the
Registration Statement, (b) in the case of a particular state, a Holder has
notified the Company that it no longer requires an effective filing in such
state in accordance with its original request for filing or (c) the date on
which the Registration Statement ceases to be effective.
5. Expenses.
--------
<PAGE>
-8-
The Company shall bear all Registration Expenses incurred in connection
with the registration of the Registrable Shares pursuant to this Agreement,
except that each Holder shall be responsible for any brokerage or underwriting
commissions and taxes of any kind (including, without limitation, transfer
taxes) with respect to any disposition, sale or transfer of Registrable Shares
sold by it and for any legal, accounting and other expenses incurred by it.
6. Indemnification by the Company.
------------------------------
The Company agrees to indemnify each of the Holders and their respective
officers, directors, employees, agents, representatives and affiliates, and each
person or entity, if any, that controls a Holder within the meaning of the
Securities Act, and each other person or entity, if any, subject to liability
because of his, her or its connection with a Holder (each, an "Indemnitee"),
against any and all losses, claims, damages, actions, liabilities, costs and
expenses (including without limitation reasonable fees, expenses and
disbursements of attorneys and other professionals), joint or several, arising
out of or based upon any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any Registration
Statement or Prospectus, or upon any untrue or alleged untrue statement of
material fact contained in the Registration Statement or any Prospectus, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, that the
Company shall not be liable to such Indemnitee or any person who participates as
an underwriter in the offering or sale of Registrable Shares or any other
person, if any, who controls such underwriter within the meaning of the
Securities Act, in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Statement or in any such
Prospectus in reliance upon and in conformity with information regarding such
Indemnitee or its plan of distribution or ownership interests which was
furnished to the Company in writing for use in connection with the Registration
Statement or the Prospectus contained therein by such Indemnitee or (ii) such
Holder's failure to send or give a copy of the final, amended or supplemented
prospectus furnished to the Holder by the Company at or prior to the time such
action is required by the Securities Act to the person claiming an untrue
statement or alleged untrue statement or omission or alleged omission if such
statement or omission was corrected in such final, amended or supplemented
prospectus.
7. Covenants of Holders.
--------------------
Each of the Holders hereby agrees (a) to cooperate with the Company and
to furnish to the Company all such information concerning its plan of
distribution and ownership interests with respect to its Registrable Shares in
connection with the preparation of a Registration Statement with respect to such
Holder's Registrable Shares and any filings
<PAGE>
-9-
with any state securities commissions as the Company may reasonably request, (b)
to deliver or cause delivery of the Prospectus contained in such Registration
Statement (other than an Issuance Registration Statement) to any purchaser of
the shares covered by such Registration Statement from the Holder and (c) to
indemnify the Company, its officers, directors, employees, agents,
representatives and affiliates, and each person, if any, who controls the
Company within the meaning of the Securities Act, and each other person, if any,
subject to liability because of his connection with the Company, against any and
all losses, claims, damages, actions, liabilities, costs and expenses arising
out of or based upon (i) any untrue statement or alleged untrue statement of
material fact contained in either such Registration Statement or the Prospectus
contained therein, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, if and to the extent that such statement or omission occurs from
reliance upon and in conformity with written information regarding the Holder,
its plan of distribution or its ownership interests, which was furnished to the
Company by the Holder for use therein unless such statement or omission was
corrected in writing to the Company not less than three (3) business days prior
to the date of the final prospectus (as supplemented or amended, as the case may
be) or (ii) the failure by the Holder to deliver or cause to be delivered the
Prospectus contained in such Registration Statement (as amended or supplemented
if applicable) furnished by the Company to the Holder to any purchaser of the
shares covered by such Registration Statement from the Holder through no fault
of the Company. The liability of the Holders under the preceding indemnity shall
be several and not joint.
8. Suspension of Registration Requirement: Restriction on Sales.
------------------------------------------------------------
(a) The Company shall promptly notify each Holder of, and confirm
in writing, the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement with respect to such Holder's
Registrable Shares or the initiation of any proceedings for that purpose. The
Company shall use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such a Registration Statement at the earliest
possible moment.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation under this Agreement to cause a Registration
Statement and any filings with any state securities commission to become
effective or to amend or supplement a Registration Statement shall be suspended
in the event and during such period as unforeseen circumstances exist (including
without limitation (i) an underwritten primary offering by the Company if the
Company is advised by the underwriters that the sale of Registrable Shares under
the Registration Statement would impair the pricing or commercial practicality
of the primary offering or (ii) pending negotiations relating to, or
consummation of, a transaction or the occurrence of an event that would require
additional disclosure of material information by the Company in the Registration
Statement or such filing, as to which the Company has a bona fide business
<PAGE>
-10-
purpose for preserving confidentiality or which renders the Company unable to
comply with SEC requirements) (such unforeseen circumstances being hereinafter
referred to as a "Suspension Event") that would make it impractical or
unadvisable to cause the Registration Statement or such filings to become
effective or to amend or supplement the Registration Statement, but such
suspension shall continue only for so long as such event or its effect is
continuing. The Company shall notify the Holders of the existence and, in the
case of circumstances referred to in clause (i) of this Section 8(b), nature of
any Suspension Event.
(c) Each Holder of Registrable Shares agrees, if requested by the
Company in the case of a Company-initiated non-underwritten offering, or if
requested by the managing underwriter or underwriters in a Company-initiated
underwritten offering, not to effect any public sale or distribution of any of
the securities of the Company, including a sale pursuant to Rule 144, during the
15-day period prior to, and during the 60-day period beginning on, the date of
effectiveness of the registration statement relating to such Company-initiated
offering.
9. Black-Out Period.
----------------
Each Holder agrees that, following the effectiveness of any Registration
Statement (except an Issuance Registration Statement) relating to Registrable
Shares of such Holder, such Holder will not effect any sales of the Registrable
Shares pursuant to the Registration Statement or any filings with any state
Securities Commission at any time after such Holder has received notice from the
Company to suspend sales as a result of the occurrence or existence of any
Suspension Event or so that the Company may correct or update the Registration
Statement or such filing. The Holder may recommence effecting sales of the
Shares pursuant to the Registration Statement or such filings following further
notice to such effect from the Company, which notice shall be given by the
Company not later than five (5) business days after the conclusion of any such
Suspension Event.
10. Additional Shares.
-----------------
The Company, at its option, may register, under any Registration
Statement and any filings with any state securities commissions filed pursuant
to this Agreement, any number of unissued Common Shares of the Company or any
Common Shares of the Company owned by any other shareholder or shareholders of
the Company.
11. Contribution.
------------
If the indemnification provided for in Sections 6 and 7 is unavailable
to an indemnified party with respect to any losses, claims, damages, actions,
liabilities, costs or expenses referred to therein or is insufficient to hold
the indemnified party harmless as contemplated therein, then the indemnifying
party, in lieu of indemnifying such
<PAGE>
-11-
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, actions,
liabilities, costs or expenses in such proportion as is appropriate to reflect
the relative fault of the Company, on the one hand, and the Indemnitee, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, actions, liabilities, costs or expenses as well as
any other relevant equitable considerations. The relative fault of the Company,
on the one hand, and of the Indemnitee, on the other hand, shall be determined
by reference to, among other factors, whether the untrue or alleged untrue
statement of a material fact or omission to state a material fact relates to
information supplied by the Company or by the Indemnitee and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that in no event shall
the obligation of any indemnifying party to contribute under this Section 11
exceed the amount that such indemnifying party would have been obligated to pay
by way of indemnification if the indemnification provided for under Sections 6
or 7 hereof had been available under the circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph.
Notwithstanding the provisions of this Section 11, no Holder shall be
required to contribute any amount in excess of the amount by which the gross
proceeds from the sale of Shares exceeds the amount of any damages that the
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.
12. No Other Obligation to Register.
-------------------------------
Except as otherwise expressly provided in this Agreement, the Company
shall have no obligation to the Holders to register the Registrable Shares under
the Securities Act.
13. Amendments and Waivers.
----------------------
The provisions of this Agreement may not be amended, modified, or
supplemented or waived without the prior written consent of the Company and
Holders holding in excess of two-thirds of the aggregate of all Shares and Units
held by Holders.
14. Notices.
-------
Except as set forth below, all notices and other communications provided
for or permitted hereunder shall be in writing and shall be deemed to have been
duly given if
<PAGE>
-12-
delivered personally or sent by telex or telecopier, registered or certified
mail (return receipt requested), postage prepaid or courier or overnight
delivery service to the respective parties at the following addresses (or at
such other address for any party as shall be specified by like notice, provided
that notices of a change of address shall be effective only upon receipt
thereof), and further provided that in case of directions to amend the
Registration Statement pursuant to Section 3(g) or Section 7, a Holder must
confirm such notice in writing by overnight express delivery with confirmation
of receipt:
<PAGE>
-13-
If to the Company: Boston Properties, Inc.
8 Arlington Street
Boston, Massachusetts 02116
Attn: Douglas T. Linde, Senior
Vice President
Telecopy: (617) 536-4562
with a copy to: Goodwin, Procter & Hoar LLP
Exchange Place Boston
Boston, Massachusetts 02109
Attn: Gilbert G. Menna, P.C.
Telecopy: (617) 523-1231
and with a copy to: Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
Attn: Peter Van, Esq.
Telecopy: (617) 951-8736
If to the Holder: Reservoir Place Limited Partnership Associates
c/o Donald Tofias & Co., LLC
1601 Trapelo Road
Waltham, MA 02451-7333
Attn: Donald Tofias
Telecopy: (781) 890-1512
with a copy to: Mintz Levin Cohn Ferris Glovsky & Popeo PC
One Financial Center
Boston, MA 02109
Attn: Christopher H. Milton, Esq.
Telecopy: (617) 542-2241
In addition to the manner of notice permitted above, notices given pursuant to
Sections 3, 8 and 9 hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.
15. Successors and Assigns.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and their respective successors and assigns. This Agreement may not be
assigned by any Holder and any attempted assignment hereof by any Holder will be
void and of no effect and shall terminate all obligations of the Company
hereunder; provided, that any Holder may assign
<PAGE>
-14-
its rights hereunder to any person to whom such Holder may Dispose of Units
pursuant to Section 2(b) hereof, including any pledgee described in clause (v)
of Section 2(b).
16. Counterparts.
------------
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
17. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
wholly within said State.
18. Severability.
------------
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
19. Entire Agreement.
----------------
This Agreement is intended by the parties as a final expression of
their agreement and intended to be the complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
such subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
<PAGE>
-15-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
BOSTON PROPERTIES, INC.
By: /s/ Douglas T. Linde
-------------------------------------
Name: Douglas T. Linde
Title: Senior Vice President
RESERVOIR PLACE LIMITED
PARTNERSHIP ASSOCIATES
By: DT Real Estate, Inc., a
Massachusetts corporation, its
sole General Partner
By: /s/ Donald Tofias, President
-------------------------------------
Name: Donald Tofias
Title: President and Treasurer
<PAGE>
SCHEDULE A
Permitted Distributees
DT Real Estate, Inc.
c/o Donald Tofias
1601 Trapelo Road
Waltham, MA 02154
Tofias Family General Partnership
c/o Donald Tofias & Co., LLC
1601 Trapelo Road
Waltham, MA 02154
Medfield Industrial Park Limited Partnership
c/o Julius Tofias & Company, L.L.C.
Shovel Shop Square
P.O. Box 420
North Easton, MA 02356
ABT Real Estate Limited Partnership
c/o Julius Tofias & Company, L.L.C.
Shovel Shop Square
P.O. Box 420
North Easton, MA 02356
Donald Tofias and Susan W. Tofias
c/o Donald Tofias & Co., LLC
1601 Trapelo Road
Waltham, MA 02154
<PAGE>
RESERVOIR PLACE
FIRST AMENDMENT TO REGISTRATION
RIGHTS AND LOCK-UP AGREEMENT
This First Amendment is made as of November 24, 1998 by Boston
Properties, Inc., a Delaware corporation (the "Company"), and each of the
undersigned Permitted Distributees desiring to become parties to that certain
Registration Rights and Lock-Up Agreement entered into on November 3, 1998 (the
"Registration Rights Agreement") by the Company and Reservoir Place Limited
Partnership Associates, a Massachusetts limited partnership, as the "Holder"
named therein, in connection with the contribution and conveyance of property to
Boston Properties Limited Partnership, a Delaware limited partnership (the
"Operating Partnership"), pursuant to that certain Real Estate Contribution and
Exchange Agreement dated August 7, 1998, as amended (the "Contribution
Agreement"), between the Operating Partnership and the Holder named in the
Registration Rights Agreement. All capitalized terms used herein and not defined
shall have the respective meanings ascribed to such terms in the Registration
Rights Agreement.
WHEREAS, concurrently herewith, each of the undersigned are being
admitted as Additional Limited Partners (as such terminology is defined in the
Operating Partnership) in connection with the receipt by each of the undersigned
of certain Units of the Operating Partnership being distributed concurrently
herewith to the undersigned as Permitted Distributees under the Registration
Rights Agreement; and
WHEREAS, the undersigned desire to obtain the Company's consent to
each of the undersigned becoming parties to the Registration Rights of
Agreement;
NOW, THEREFORE, in consideration of each of the undersigned being
admitted as Additional Limited Partners to the Operating Partnership, and the
mutual agreements set forth in the Registration Rights Agreement to which the
undersigned are becoming parties, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. With respect to any Units held by the undersigned which were
originally issued pursuant to the Contribution Agreement, each of the
undersigned, by executing and delivering this First Amendment to the
Registration Rights Agreement, hereby agrees with the Company to be bound by all
of the terms and conditions of the Registration Rights Agreement applicable to a
Holder of Units thereunder, including, without limitation, those provisions and
conditions set forth in Section 2 of the Registration Rights Agreement.
2. In consideration of the agreements herein made by each of the
undersigned, the Company hereby consents to the distribution by the Holder
originally
<PAGE>
named in the Registration Rights Agreement of certain of such Units to the
undersigned, and the Company agrees that the provisions of the Registration
Rights Agreement shall from and after the date hereof inure to the benefit of
each of the undersigned as a Holder.
3. This First Amendment may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to the Registration Rights Agreement as of the date first above
written.
TOFIAS FAMILY GENERAL PARTNERSHIP, a
Massachusetts general partnership
By: /s/ Donald Tofias, Partner
---------------------------
Donald Tofias, Partner
DT REAL ESTATE, INC., a Massachusetts
corporation
By: /s/ Donald Tofias, President
-----------------------------
Name: Donald Tofias
Title: President
MEDFIELD INDUSTRIAL PARK LIMITED
PARTNERSHIP, a Massachusetts limited
partnership
By: ABT Inc., a Massachusetts
corporation, its General Partner
By: /s/ Arnold B. Tofias
--------------------
Name: Arnold B. Tofias
Title: President
<PAGE>
ABT REAL ESTATE LIMITED PARTNERSHIP,
Massachusetts limited partnership
By: ABT Inc., a Massachusetts
corporation, its General Partner
By: /s/ Arnold B. Tofias
----------------------------------
Name: Arnold B. Tofias
Title: President
BOSTON PROPERTIES, INC.
By: /s/ Douglas T. Linde
----------------------------------------
Name: Douglas T. Linde
Title: Senior Vice President
