PROSPECTUS SUPPLEMENT
The following information supplements the attached prospectus of Mission West
Properties, Inc. dated November 27, 1998.
On December 28, 1998, the Company's shareholders approved or ratified all of the
following transactions:
o A private placement of 6,495,058 shares of the Company's Common Stock
for $4.50 per share to a group of accredited investors.
o Ratification of the Company's becoming the sole general partner and
acquiring approximately 12.11% of the total partnership interests in
the Operating Partnerships and to approve other related matters.
o Approval of the issuance of up to 93,398,705 shares of Common Stock
issuable upon the redemption or exchange of 93,398,705 units of
limited partnership interests held by or issuable to the limited
partners in the four limited partnerships, including 33,919,072 units
issuable upon the acquisition of certain pending development projects
from Mr. Berg and certain of his affiliates.
o Approval of the acquisition by the Company of the right to acquire,
through the Operating Partnership, certain commercial R&D pending
building developments consisting of approximately 1.02 million
rentable square feet from Mr. Berg and certain of his affiliates, and
the acquisition of an option with respect to future developments on
land currently held by Mr. Berg and certain of his affiliates.
o Approval of the reincorporation of the Company under the laws of the
State of Maryland through a merger with Mission West Properties, Inc.,
a Maryland corporation, a newly formed wholly owned subsidiary of the
Company.
The Company has completed the sale of 6,495,058 shares of Common Stock, no par
value, to accredited investors and has received total cash proceeds of
approximately $28,328,000. All of the proceeds of the sale of the Common Stock
have been used to repay principal owed by the Company under four demand notes
payable to the Operating Partnerships.
On December 29, 1998 the Company entered into the following agreements:
o Exchange Rights Agreement with all of the existing limited partners in
the Operating Partnerships.
o Pending Projects Acquisition Agreement with Mr. Berg and certain of
his affiliates.
o Berg Land Holdings Option Agreement with Mr. Berg and certain of his
affiliates.
Also, on December 30, 1998, the Company merged into its wholly owned subsidiary,
Mission West Properties, Inc., and thereby reincorporated under the laws of the
State of Maryland. Existing stock certificates held by the Company's
stockholders will continue to represent shares of Common Stock, par value
$0.001, of the new corporation and stockholders do not need to submit them in
exchange.
Separately, the Company's management has determined with its tax advisors that
neither the Company nor its stockholders will derive significant benefits from
an election to become a real estate investment trust ("REIT") for federal and
state income tax purposes with respect to the Company's tax year ended December
31, 1998. Instead, the Company will elect REIT status for its 1999 tax year.
Additionally, the Company's board of directors has decided not to declare any
dividends on the Company's Common Stock with respect to the year ending December
31, 1998.
The Company's current outside directors are John Bolger, Lawrence Helzel and
William Hasler. Mr. Bolger is a private investor and former CFO of Cisco
Systems. Mr. Helzel, a private investor, is a member of the Pacific Stock
Exchange and serves as a director for Pacific Gateway Properties, a publicly
traded real estate company. Mr. Hasler is a former Dean of the Haas School of
Business, University of California, Berkeley and is currently Co-CEO of Aphton
Corporation, a publicly trades bio-pharmaceutical company.
The Board of Directors has established an Audit Committee, whose current members
are John Bolger and William Hasler, a Compensation Committee whose current
members are John Bolger and Lawrence Helzel, and an Independent Directors
Committee, who current members are John Bolger, Lawrence Helzel and William
Hasler.
Bradley Perkins, Vice President and General Counsel, will resign from the
Company effective January 8, 1999 to return to the semiconductor industry. At
this time, the Company does not plan to replace Mr. Perkins.
Mission West Properties intends to operate as a self-managed, self-administered
and fully integrated REIT engaged in the management, leasing, marketing,
development and acquisition of commercial R & D properties, primarily located in
the Silicon Valley portion of the San Francisco Bay Area. Currently, the Company
manages 71 properties totaling approximately 4.51 million square feet.
