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filed with the Securities and Exchange Commission on June 11, 2007
Registration No. 333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
BioMed Realty Trust, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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| Maryland
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20-1142292 |
| (State or Other Jurisdiction of
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(I.R.S. Employer |
| Incorporation or Organization)
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Identification Number) |
17140 Bernardo Center Drive, Suite 222
San Diego, California 92128
(858) 485-9840
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Alan D. Gold
Chairman, President and Chief Executive Officer
BioMed Realty Trust, Inc.
17140 Bernardo Center Drive, Suite 222
San Diego, California 92128
(858) 485-9840
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Craig M. Garner, Esq.
Latham & Watkins LLP
12636 High Bluff Drive, Suite 400
San Diego, California 92130
(858) 523-5400
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.
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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.
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If this Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement of the same offering.
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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. o
If this Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following
box. þ
If this Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Proposed Maximum |
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Amount of |
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Amount to be |
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Offering Price Per |
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Aggregate |
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Registration |
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Title of Securities Being Registered |
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Registered |
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Unit |
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Offering Price |
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Fee |
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Common Stock, par value $0.01 per
share
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5,000,000(1)
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27.65 |
(2) |
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138,250,000 |
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4,245 |
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Pursuant to Rule 416 under the Securities Act, such number of shares of common stock registered
hereby shall include an indeterminable number of shares of common stock that may be issued in
connection with a stock split, stock dividend, recapitalization or similar event. No additional
consideration will be received for the common stock, and therefore no registration fee is required
pursuant to Rule 457(i) under the Securities Act. |
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The proposed maximum offering price per unit with respect to the 5,000,000 shares being
registered pursuant to this Registration Statement is $27.65, estimated solely for the purpose of
computing the registration fee, pursuant to Rule 457(a) under the Securities Act, and, in
accordance with Rule 457(c) under the Securities Act, based on the average of the high and low
reported sale prices of our common stock on the New York Stock
Exchange on June 8, 2007. |
PROSPECTUS
BioMed Realty Trust, Inc.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
5,000,000 Shares
Common Stock
We have adopted a dividend reinvestment and stock purchase plan to provide both existing
stockholders and interested new investors a convenient and cost-effective method to purchase shares
of our common stock. Stockholders and other investors may begin participating in the plan by
completing a plan enrollment form and returning it to The Bank of New York, as plan agent, who will
administer the plan. Our common stock is listed on the New York Stock Exchange under the symbol
“BMR.” On June 8, 2007, the closing price of our
common stock was $27.85.
Some of the significant features of the plan are as follows:
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If you are an existing stockholder, you may purchase additional shares of common stock
by automatically reinvesting all or any part of the cash dividends paid on your shares of
common stock. There is no minimum or maximum limitation on the amount of dividends you may
reinvest in the plan. |
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If you are an existing stockholder, you may purchase additional shares of common stock
by making optional cash purchases of between $100 and $10,000 in any calendar month.
Optional cash purchases of our common stock in excess of this maximum may only be made with
our prior written consent. |
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If you are not an existing stockholder, you may make an initial cash purchase of common
stock of at least $100 with a maximum of $10,000. Initial optional cash purchases of our
common stock in excess of this maximum may only be made with our prior written consent. |
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We may sell newly issued shares directly to the plan agent or instruct the plan agent to
purchase shares in the open market or in privately negotiated transactions, or elect a
combination of these alternatives. |
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You can purchase shares of our common stock without brokerage fees, commissions or
charges. We will bear the expenses for open market purchases. |
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The purchase price for newly issued shares of common stock purchased directly from us
will be the market price less a discount ranging from 0% to 5%, determined from time to
time by us in accordance with the plan. The discount is initially set at 0%, but we may
adjust that discount in our discretion at any time. This discount applies to either
optional cash purchases or reinvested dividends. However, no discount will be available for
common stock purchased in the open market or in privately negotiated transactions. |
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Holders of shares in broker or nominee names may participate in the plan by instructing
their brokers or nominees to reinvest dividends and make optional cash purchases on their
behalf. |
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You may also make automatic monthly investments by authorizing electronic funds to be
transferred from your banking or checking accounts. You may make an electronic fund
transfer for as little as $100 per month, after the initial investment, but in no case for
more than $10,000 per month. |
Participation in the plan is entirely voluntary, and you may terminate your participation at
any time. If you do not choose to participate in the plan you will continue to receive cash
dividends, as declared, in the usual manner.
To assist us in complying with certain federal income tax requirements applicable to real
estate investment trusts, or REITs, our charter contains certain restrictions relating to the
ownership and transfer of our stock, including an ownership limit of 9.8% on our common stock. See
“Restrictions on Ownership and Transfer” beginning on page 17 of this prospectus.
You should consider the risks that we have described in “Risk Factors” on page 1 before
investing in our securities.
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. Any representation to the contrary is a criminal offense.
The
date of this prospectus is June 11, 2007
TABLE OF CONTENTS
References in this prospectus to “we,” “our,” “us” and “our company” refer to BioMed Realty
Trust, Inc., a Maryland corporation, BioMed Realty, L.P., and any of our other subsidiaries. BioMed
Realty, L.P. is a Maryland limited partnership of which we are the sole general partner and to
which we refer in this prospectus as our operating partnership.
You should rely only on the information contained in this prospectus or incorporated by
reference herein. We have not authorized anyone to provide you with information or make any
representation that is different. If anyone provides you with different or inconsistent
information, you should not rely on it. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the registered securities to which they
relate, and this prospectus does not constitute an offer to sell or the solicitation of an offer to
buy securities in any jurisdiction where, or to any person to whom, it is unlawful to make such an
offer or solicitation. You should not assume that the information contained in this prospectus is
correct on any date after the date of this prospectus, even though this prospectus is delivered or
shares are sold pursuant to this prospectus at a later date. Since the date of the prospectus
contained in this registration statement, our business, financial condition, results of operations
and prospects may have changed.
BIOMED REALTY TRUST
We are a REIT focused on acquiring, developing, owning, leasing and managing laboratory and
office space for the life science industry. We were formed on April 30, 2004 and commenced
operations after completing the initial public offering, or IPO, of our common stock in August
2004. Our tenants primarily include biotechnology and pharmaceutical companies, scientific research
institutions, government agencies and other entities involved in the life science industry. Our
properties are generally located in markets with well-established reputations as centers for
scientific research, including Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania
and New York/New Jersey.
As of March 31, 2007, we owned or had interests in 57 properties, consisting of 93 buildings
with approximately 7.9 million rentable square feet of laboratory and office space. Our operating
portfolio included 6.6 million rentable square feet that was 94.8% leased to 106 tenants at March
31, 2007. The remaining 1.3 million square feet of space was available for redevelopment. In
addition, we had properties under construction that will total approximately 1.2 million rentable
square feet following completion and undeveloped land that we estimate can support up to 1.2
million rentable square feet of laboratory and office space.
Our principal offices are located at 17140 Bernardo Center Drive, Suite 222, San Diego,
California 92128. Our telephone number at that location is (858) 485-9840. Our website is located
at www.biomedrealty.com. The information found on, or otherwise accessible through, our website is
not incorporated into, and does not form a part of, this prospectus or any other report or document
we file with or furnish to the Securities and Exchange Commission.
RISK FACTORS
Investment in any securities offered pursuant to this prospectus involves risks. You should
carefully consider the risk factors incorporated by reference to our most recent Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q and the other information contained in this
prospectus, as updated by our subsequent filings under the Securities Exchange Act of 1934, as
amended, or the Exchange Act, before acquiring any of such securities. The occurrence of any of
these risks might cause you to lose all or part of your investment in the offered securities.
Please also refer to the section below entitled “Forward-Looking Statements.”
ABOUT THIS PROSPECTUS
This prospectus is part of an automatic shelf registration statement that we filed with the
Securities and Exchange Commission as a “well-known seasoned issuer” as defined in Rule 405 under
the Securities Act of 1933, as amended, or the Securities Act, using a “shelf” registration
process. This prospectus provides you with a general description of our common stock that we may
sell pursuant to the dividend reinvestment and stock purchase plan, or the plan. As permitted by
the rules and regulations of the Securities and Exchange Commission, this prospectus omits various
information, exhibits, schedules and undertakings included in the registration statement. You
should read this prospectus together with additional information described below under the heading
“Where You Can Find More Information” before you decide whether to invest in our common stock.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy any document we file with the Securities
and Exchange Commission at the public reference room of the Securities and Exchange Commission, 100
F Street, N.E., Washington, D.C. 20549. Information about the operation of the public reference
room may be obtained by calling the Securities and Exchange Commission at 1-800-SEC-0330. Copies of
all or a portion of the registration statement can be obtained from the public reference room of
the Securities and Exchange Commission upon payment of prescribed fees. Our Securities and Exchange
Commission filings, including our registration statement, are also available to you on the
Securities and Exchange Commission’s website at http://www.sec.gov.
We have filed with the Securities and Exchange Commission a registration statement on Form
S-3, of which this prospectus is a part, including exhibits, schedules and amendments filed with,
or incorporated by reference in, this registration statement, under the Securities Act with respect
to the securities registered hereby. This prospectus does not contain all of the information set
forth in the registration statement and exhibits and schedules to the registration statement. For
further information with respect to our company and the securities registered hereby, reference is
made to the registration statement, including the exhibits to the registration statement.
Statements contained in this prospectus as to the contents of any contract or other document
referred to in, or incorporated by reference in, this prospectus are not necessarily complete and,
where that contract is an exhibit to the registration statement, each statement is qualified in all
respects by the exhibit to which the reference relates. Copies of the registration statement,
including the
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exhibits and schedules to the registration statement, may be examined without charge at the
public reference room of the Securities and Exchange Commission, 100 F Street, N.E., Washington,
D.C. 20549. Information about the operation of the public reference room may be obtained by calling
the Securities and Exchange Commission at 1-800-SEC-0330. Copies of all or a portion of the
registration statement can be obtained from the public reference room of the Securities and
Exchange Commission upon payment of prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to “incorporate by reference” the information
we file with the Securities and Exchange Commission, which means that we can disclose important
information to you by referring to those documents. The information incorporated by reference is an
important part of this prospectus. The incorporated documents contain significant information about
us, our business and our finances. Any information contained in this prospectus or in any document
incorporated or deemed to be incorporated by reference in this prospectus will be deemed to have
been modified or superseded to the extent that a statement contained in this prospectus, in any
other document we subsequently file with the Securities and Exchange Commission that also is
incorporated or deemed to be incorporated by reference in this prospectus modifies or supersedes
the original statement. Any statement so modified or superseded will not be deemed, except as so
modified or superseded, to be a part of this prospectus. We incorporate by reference the following
documents we filed with the Securities and Exchange Commission:
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our Annual Report on Form 10-K for the year ended December 31, 2006, |
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, |
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our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2007, |
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our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 17, 2007, |
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our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2007, |
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our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 6, 2007, |
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our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 2, 2007, |
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our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 16, 2007, |
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the description of our common stock included in our registration statement on Form 8-A
filed with the Securities and Exchange Commission on July 30, 2004, and |
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all documents filed by us with the Securities and Exchange Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus
and prior to the termination of the offering of the underlying securities. |
To the extent that any information contained in any current report on Form 8-K, or any exhibit
thereto, was furnished to, rather than filed with, the Securities and Exchange Commission, such
information or exhibit is specifically not incorporated by reference in this prospectus.
We will provide without charge to each person, including any beneficial owner, to whom a
prospectus is delivered, on written or oral request of that person, a copy of any or all of the
documents we are incorporating by reference into this prospectus, other than exhibits to those
documents unless those exhibits are specifically incorporated by reference into those documents. A
written request should be addressed to BioMed Realty Trust, Inc., 17140 Bernardo Center Drive,
Suite 222, San Diego, California 92128, Attention: Secretary.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents that we incorporate by reference herein contain
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act and Section 21E of the Exchange Act). Also,
documents we subsequently file with the Securities and Exchange Commission and incorporate by
reference will contain forward-looking statements. In particular, statements pertaining to our
capital resources, portfolio performance and results of operations contain forward-looking
statements. Likewise, our statements regarding anticipated growth in our funds from operations and
anticipated market conditions, demographics and results of operations are forward-looking
statements. Forward-looking statements involve numerous risks and uncertainties, and you should not
rely on them as predictions of future events. Forward-looking
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statements depend on assumptions, data or methods which may be incorrect or imprecise, and we
may not be able to realize them. We do not guarantee that the transactions and events described
will happen as described (or that they will happen at all). You can identify forward-looking
statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,”
“should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates”
or the negative of these words and phrases or similar words or phrases. You can also identify
forward-looking statements by discussions of strategy, plans or intentions. The following factors,
among others, could cause actual results and future events to differ materially from those set
forth or contemplated in the forward-looking statements:
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adverse economic or real estate developments in the life science industry or in our target markets, |
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general economic conditions, |
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our ability to compete effectively, |
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defaults on or non-renewal of leases by tenants, |
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increased interest rates and operating costs, |
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our failure to obtain necessary outside financing, |
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our ability to successfully complete real estate acquisitions, developments and dispositions, |
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risks and uncertainties affecting property development and construction, |
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our failure to successfully operate acquired properties and operations, |
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our failure to maintain our status as a REIT, |
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government approvals, actions and initiatives, including the need for compliance with environmental requirements, |
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financial market fluctuations, and |
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changes in real estate and zoning laws and increases in real property tax rates. |
While forward-looking statements reflect our good faith beliefs, they are not guarantees of
future performance. We disclaim any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. For a further discussion of
these and other factors that could impact our future results, performance or transactions, see the
section above entitled “Risk Factors,” including the risks incorporated therein from our most
recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as updated by our future
filings.
USE OF PROCEEDS
We will receive the net proceeds from any sale of common stock purchased by the plan agent
directly from us. We intend to use these proceeds for general corporate and working capital
purposes, including the repayment of outstanding indebtedness under our existing $500.0 million
revolving credit facility. The precise amount and timing of the application of the net proceeds
will depend upon our capital requirements and the availability of other funds. We will not receive
any proceeds from purchases of common stock by the plan agent in the open market or in privately
negotiated transactions.
As of May 31, 2007, we had $151.4 million outstanding under our $500.0 million revolving
credit facility. These borrowings were used to fund property acquisitions and for other general
corporate and working capital purposes. This revolving credit facility matures on June 27, 2009 and
bears interest at a floating rate equal to, at our option, either (1) reserve adjusted LIBOR plus a
spread which ranges from 110 to 160 basis points, depending on our leverage, or (2) the higher of
(a) the prime rate then in effect plus a spread which ranges from 0 to 25 basis points and (b) the
federal funds rate then in effect plus a spread which ranges from 50 to 75 basis points, in each
case, depending on our leverage. As of May 31, 2007, the weighted-average interest rate on this
revolving credit facility was 6.52%. We may, at our option, extend the maturity of this revolving
credit facility to June 27, 2010 after satisfying certain conditions and paying an extension fee.
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THE PLAN
The following description of the dividend reinvestment and stock purchase plan is set
forth in a question and answer format. In addition to reading this description, we encourage you to
read and consider the plan, which we have filed as an exhibit to the registration statement which
includes this prospectus, and the information contained in the documents identified under the
headings “Where You Can Find More Information” and “Incorporation of Certain Documents by
Reference” elsewhere in this prospectus.
1. What is the purpose of the plan?
The purpose of the plan is to provide our stockholders and other investors with a convenient
and economical method of purchasing shares of our common stock and/or investing all or a portion of
their cash dividends in additional shares of our common stock without paying any brokerage
commission or service charge.
The plan also provides us with a means of raising additional capital if we elect to
directly sell newly issued shares of common stock.
2. What are the benefits of the plan?
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There are no fees or brokerage commissions on purchases, and we will bear the expenses for open market purchases. |
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Participation is voluntary and automatic. All or any part of your quarterly stock dividends may be reinvested. |
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The automatic reinvestment of dividends will enable you to add to your investment in our
company in a timely and systematic fashion. |
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In addition to being able to reinvest your dividends, if you are an existing
stockholder, you may purchase additional shares of our common stock by making optional cash
purchases of between $100 and $10,000 per calendar month. These optional cash purchases may
be made occasionally or at regular intervals, subject to the restrictions described above.
You may make optional cash purchases even if dividends on your shares are not being
reinvested under the plan. We may waive the maximum in our sole discretion and permit a
larger investment. |
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If you are not presently one of our stockholders, you may become a participant in the
plan by making an initial cash investment in our common stock of not less than $100 and not
more than $10,000. We may waive this maximum, in our sole discretion, and permit a larger
investment. |
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The purchase price for newly issued shares of our common stock purchased directly from
us either through dividend reinvestment or optional cash purchases may be issued at a
discount from the market price. We will periodically establish a discount rate ranging from
0% to 5%. The discount is initially set at 0%, but we may adjust that discount in our
discretion at any time. |
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You may purchase fractional shares of our common stock under the plan. This means that
you may fully invest your dividends and any optional cash purchases. Dividends will be paid
on the fractional shares of our common stock which also may be reinvested in additional
shares. |
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You may direct the plan agent to transfer, at any time and at no cost to you, all or a
portion of your shares in the plan to a plan account for another person. |
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You can avoid the need for safekeeping of certificates for shares of common stock
credited to your plan account and may submit to the plan’s agent, for safekeeping,
certificates held by you and registered in your name. You do not have to worry about the
stock certificates for your shares of common stock issued under the plan being lost or
stolen or wonder where they are located. |
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You or any other person that is a holder of record of shares of our common stock may
direct the plan agent to sell or transfer all or a portion of your shares held in the plan. |
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You will receive periodic statements reflecting all current activity in your plan
accounts, including purchases, sales and latest balances, to simplify your record keeping. |
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3. What are the disadvantages of the plan?
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Cash dividends that you reinvest will be treated for federal income tax purposes as a
distribution received by you on the date we pay dividends and may create a liability for
the payment of income tax without providing you with immediate cash to pay this tax when it
becomes due. |
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We may, without giving you prior notice, change our determination as to whether the plan
agent will purchase shares of our common stock directly from us or in the open market or in
privately negotiated transactions from third parties which will affect whether such shares
will be sold to you at a discount. We will not, however, change our determination more than
once in any three-month period. |
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No interest will be paid by us or the plan agent on dividends or optional cash payments
held pending reinvestment or investment. |
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You will not know the actual number of shares purchased in any month on your behalf
under the plan until after the applicable investment date. |
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You will have limited control regarding the timing of sales under the plan. Because the
plan agent will effect sales under the plan only as soon as practicable after it receives
instructions from you, you may not be able to control the timing of sales as you might for
investments made outside the plan. The market price of the shares of our common stock may
fluctuate between the time the plan agent receives an investment instruction and the time
at which the shares of our common stock are sold. Sales of common stock credited to your
account will involve a nominal fee per transaction to be deducted from the proceeds of the
sale by the plan agent, in addition to any brokerage commissions and transfer taxes on the
sales. |
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Because purchases under the plan are only made as of the dividend payment date, in the
case of dividends, or the applicable investment date, in the case of optional cash
purchases, you have no control regarding the timing of your purchases under the plan. No
discount will be available for shares acquired in the open market or in privately
negotiated transactions. While a discount from market prices of up to 5% may be established
for a particular month for shares purchased directly from us, a discount for one month will
not insure the availability of a discount or the same discount in future months. Each month
we may, without giving you prior notice, change or eliminate the discount. Further, in no
event may we issue shares at a price less than 95% of the average of the high and low price
of our common stock on the New York Stock Exchange, or NYSE, on the date of issuance,
including, for this purpose, any fees, brokerage commissions or other expenses we bear on
behalf of plan participants. |
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Because the purchase price for common stock purchased directly from us under the plan is
based on the 10-day average of the average of the high and low NYSE prices on each of the
10 trading days immediately preceding the applicable investment date, it is possible that
the actual purchase price you pay for common stock purchased under the plan may be higher
than the amount for which the common stock could have been purchased in the open market on
the investment date. |
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Shares deposited in a plan account may not be pledged until the shares are withdrawn
from the plan. |
Your investment in the shares of common stock held in your account is no different than a
direct investment in shares of our common stock. You bear the risk of loss and the benefits of gain
from market price changes for all of your shares of common stock. NEITHER WE NOR THE PLAN AGENT CAN
ASSURE YOU THAT SHARES OF OUR COMMON STOCK PURCHASED UNDER THE PLAN WILL, AT ANY PARTICULAR TIME,
BE WORTH MORE OR LESS THAN THE AMOUNT YOU PAID FOR THEM.
4. Who will administer the plan?
The plan will be administered by our transfer agent and registrar, The Bank of New York. We
may designate a successor administrator as agent. The plan agent acts as agent for you, keeps
records of your accounts, sends you regular account statements, and performs other duties relating
to the plan. Common stock purchased for you under the plan will be held by the plan agent and may
be registered in the name of the plan agent or its nominee on your behalf, unless and until you
request that a stock certificate for all or part of the shares be issued, as more fully described
under Question 22, “Will certificates be issued for share purchases?”
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The address for the plan agent concerning any inquiries is:
The Bank of New York
c/o Investor Relations Department
P.O. Box 11258
Church Street Station
New York, New York 10286-1258
The address for the plan agent concerning any financial transaction processing, including
enrollments, sales, withdrawals, deposits and optional cash payment, is:
The Bank of New York
Dividend Reinvestment Services
P.O. Box 1958
Newark, New Jersey 07101-7924
You may also contact the plan agent by telephone for general inquiries at the following
number. Please note that most transactions can be conducted over the telephone using the plan
agent’s automated telephone system. Using the automated telephone system to issue certificates and
sell plan shares provides private and automated transactions.
Telephone Number: (800) 524-4458
You may also contact the plan agent via e-mail at the following address:
shareowners@bankofny.com. The plan agent’s website provides on-line transactions at the following
address: www.stockbny.com.
Unless directed otherwise by The Bank of New York, purchases and sales under the plan
usually will be made through a broker affiliated with The Bank of New York (“Affiliated Broker”).
The Affiliated Broker will receive brokerage commissions from these transactions.
We may remove the plan agent, or the plan agent may resign, upon 30 calendar days’ prior
written notice.
5. Who is eligible to participate?
Any stockholder whose shares of common stock are registered on our stock transfer books
in his or her name, also referred to as a “registered holder,” or any stockholder whose shares of
common stock are registered in a name other than his or her name, for example, in the name of a
broker, bank or other nominee, also referred to as a “beneficial owner,” may participate in the
plan. If you are a registered holder, you may participate in the plan directly. If you are a
beneficial owner, you must either become a registered holder by having those shares transferred so
that they are registered under your name or you must make arrangements with your broker, bank or
other nominee to participate in the plan on your behalf.
In addition, if you are an interested investor who is not a stockholder, you may
participate in the plan by making an initial optional cash purchase of common stock of not less
than $100 or more than $10,000, unless we approve in writing your request for a waiver of this
limit. See Question 15, “May a stockholder request a waiver of the purchase limitation?”
Your right to participate in the plan is not transferable to another person apart from
your transfer of the underlying shares of common stock. We reserve the right to exclude from
participation in the plan anyone who utilizes the plan to engage in short-term trading activities
that cause aberrations in the trading volume of our common stock.
If you reside in a jurisdiction in which your participation in the plan would be
unlawful, you will not be eligible to participate in the plan.
6. Are there limitations on participation in the plan other than those described
above?
Foreign Law Restrictions. You may not participate in the plan if it would be unlawful for
you to do so in the jurisdiction where you are a citizen or reside. If you are a citizen or
resident of a country other than the United States, you should confirm that by participating in the
plan you will not violate local laws governing, among other things, taxes, currency and exchange
controls, stock registration and foreign investments.
REIT Qualification Restrictions. In order for us to maintain our qualification as a REIT, not
more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by
five or fewer individuals (as defined in the Internal Revenue Code
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of 1986, as amended, or the Code, to include certain entities). We may terminate, by written
notice at any time, any participant’s individual participation in the plan if such participation
would be in violation of the restrictions contained in our charter or bylaws, as amended from time
to time. These restrictions prohibit any stockholder, directly or indirectly, from actually or
beneficially owning more than 9.8% in value of our outstanding stock or more than 9.8% in value or
in number of shares, whichever is more restrictive, of (i) our outstanding common stock or (ii) our
outstanding Series A cumulative redeemable preferred stock, or Series A preferred stock. Any
attempted transfer or acquisition of capital stock that would create a direct or indirect ownership
of capital stock in excess of these limits or otherwise result in our disqualification as a REIT
will result in the automatic transfer of such capital stock to a trust for a charitable
beneficiary. Our charter provides that capital stock subject to this limitation is subject to
various rights that we have to enforce this limitation. This summary of the ownership limitation is
qualified in its entirety by reference to our charter. We reserve the right to invalidate any
purchases made under the plan that we determine, in our sole discretion, may violate the 9.8%
ownership limits. Any grant of a request for waiver of the maximum monthly optional cash purchase
will not be deemed to be a waiver of such ownership limits.
Exclusion from Plan for Short-Term Trading or Other Practices. You should not use the plan to
engage in short-term trading activities that could change the normal trading volume of the common
stock. If you do engage in short-term trading activities, we may prevent you from participating in
the plan. We reserve the right to modify, suspend or terminate participation in the plan, by
otherwise eligible holders of common stock, in order to eliminate practices which we determine, in
our sole discretion, are not consistent with the purposes or operation of the plan or which may
adversely affect the price of the common stock.
7. How do I enroll in the plan and become a participant?
You must complete and sign the dividend reinvestment and stock purchase plan enrollment
form and return it to the plan agent. We have enclosed an enrollment form and postage-paid envelope
with the prospectus for this purpose. Also, you may obtain an enrollment form at any time by
requesting one from the plan agent at the address and telephone number set forth above. If you
register shares in more than one name (e.g., joint tenants, trustees), all registered holders of
those shares must sign the enrollment form exactly as their names appear on the account
registration. If your securities are registered in the name of a broker, bank or other nominee, you
must contact the broker, bank or nominee and request that they complete an enrollment form on your
behalf.
If you are an interested investor who is not presently one of our stockholders, but
desire to become a participant by making an initial investment in common stock, you may join the
plan by completing an enrollment form and forwarding it, together with the initial investment in
U.S. funds by check payable to the plan agent, to the plan agent at the address on the enrollment
form.
8. What does the enrollment form provide?
The enrollment form appoints the plan’s agent as your agent for purposes of the plan and
directs the plan agent to apply to the purchase of additional shares of common stock all of the
cash dividends on the specified number of shares of common stock owned by you on the applicable
record date and designated by you to be reinvested through the plan. The enrollment form also
directs the plan agent to purchase additional shares of common stock with any optional cash
purchases that you may elect to make.
While the enrollment form directs the plan agent to reinvest cash dividends on all shares
enrolled in the plan, you may also elect “partial dividend reinvestment” or “optional cash
purchases only.” You may change the dividend reinvestment option at any time by submitting a newly
executed enrollment form to the plan agent or by writing to the plan agent. If you do not make an
election on your enrollment form, the plan agent will reinvest all dividends paid on your shares.
Any change in the number of shares with respect to which the plan agent is authorized to reinvest
dividends must be received by the plan agent prior to the record date for a dividend to permit the
new number of shares to apply to that dividend. For each method of dividend reinvestment, cash
dividends will be reinvested on all shares other than those designated for payment of cash
dividends in the manner specified above until you specify otherwise or withdraw from the plan
altogether, or until the plan is terminated.
9. When will my participation in the plan begin?
You may join the plan at any time.
Your participation in the dividend reinvestment portion of the plan will commence on the
next date we pay dividends as declared by our board of directors, provided the plan agent receives
your enrollment form on or before the record date for the payment of the dividend. We have
historically paid dividends on or about the 15th calendar day of each January, April,
July and October, with the record date typically occurring 15 days prior to the dividend payment
date. We cannot assure you that we will pay dividends according to this schedule in the future or
at all, and nothing contained in the plan obligates us to do so. The plan does not represent a
guarantee of future dividends.
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Your participation in the optional cash purchase portion of the plan will commence on the
next investment date, which will be the 26th day of the calendar month (unless the 26th calendar
day is a Saturday, Sunday or bank holiday, in which case the investment date will be the first
business day following the 26th calendar day of that month); provided your enrollment form and
sufficient funds to be invested are received on or before the business day immediately prior to the
investment date. Should the funds to be invested arrive after the applicable optional cash
investment due date, those funds will be held without interest until they can be invested on the
next investment date unless you request a refund from the plan agent.
Once enrolled, you will remain enrolled until you discontinue participation or until we
terminate the plan.
10. How do I get a refund of an optional cash purchase if I change my mind?
You may obtain a refund of any optional cash purchase payment not yet invested by
requesting, in writing, the plan agent to refund your payment. The plan agent must receive your
request not later than five business days prior to the next investment date. If the plan agent
receives your request later than the specified date, your cash purchase payment will be applied to
the purchase of shares of common stock.
11. Will I be paid interest on funds held for optional cash purchases prior to
investment?
You will not be paid interest on funds you send to the plan agent for optional cash
purchases. Consequently, we strongly suggest that you deliver funds to the plan agent to be used
for investment in optional cash purchases shortly prior to but not after the applicable optional
cash investment due date so that they are not held over to the following investment date. If you
have any questions regarding the applicable investment dates or the dates as of which funds should
be delivered to the plan agent, you should write or telephone the plan agent at the address and
telephone number included above.
You should be aware that because investments under the plan are made as of specified
dates, you may lose any advantage that you otherwise might have from being able to control the
timing of an investment. Neither we nor the plan agent can assure you a profit or protect you
against a loss on shares of common stock purchased under the plan.
12. How many shares may be purchased by a participant during any month or year?
Reinvested dividends are not subject to any minimum or maximum.
Optional cash purchases are subject to a minimum investment of $100 and a maximum
investment of $10,000 in any calendar month.
Initial optional cash purchases by investors that are not yet one of our stockholders are
subject to a minimum of $100 and a maximum of $10,000.
The maximums for optional cash purchases may be waived by us in our sole and absolute
discretion. You may request a waiver of such maximums by submitting a request for waiver which we
must receive at least five business days prior to the investment date as described in Question 15,
“May a stockholder request a waiver of the purchase limitation?”
Optional cash purchase amounts of less than $100, and, unless the maximum is waived, any
optional cash purchases that exceed the maximum of $10,000 per calendar month, will be returned to
you without interest.
13. At what price will shares be purchased?
Reinvested dividends. The purchase price for each share of common stock acquired
through the plan by the reinvestment of dividends will be equal to:
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in the case of newly issued shares of common stock, the average of the high and low
prices on the NYSE on the applicable date we pay dividends less a discount ranging from 0%
to 5%, currently set at 0%, provided, that if no trades of our common stock are reported on
the NYSE on the date we pay dividends, the plan agent shall apply such reinvested dividends
on the next trading day on which there are trades of our common stock reported on the NYSE;
or |
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in the case of open market or privately negotiated transactions, the average of the
purchase price of all shares purchased by the plan agent with reinvested dividends for the
applicable date we pay dividends. |
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Optional cash purchases under the maximum thresholds. The price of shares acquired through
the plan as a result of optional cash purchases of $10,000 or less, will be equal to:
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in the case of newly issued shares of common stock, the 10-day average of the average of
the high and low NYSE prices on each of the 10 trading days immediately preceding the
applicable investment date, less a discount ranging from 0% to 5%, currently set at 0%; or |
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in the case of open market purchases or privately negotiated transactions, the average
of the purchase price of all shares purchased by the plan agent on the applicable
investment date. |
Optional cash purchases made above the $10,000 maximum limit with our permission. If
we elect to allow you to purchase in excess of $10,000 in any calendar month, the price will be
equal to the greater of:
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the 10-day average of the average of the high and low NYSE prices on each of the 10
trading days immediately preceding the applicable investment date, less a discount ranging
from 0% to 5%, currently set at 0%; or |
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the average of the high and low NYSE prices on the investment date, less a discount
ranging from 0% to 5%, currently set at 0%. See Question 14, “Are there limitations that
apply to optional cash purchases made in excess of the maximum limit?” All shares of common
stock purchased in excess of the maximum limit will be newly issued, and no shares will be
acquired from open market purchases or privately negotiated transactions. |
Maximum discount applicable to all dividend reinvestments and optional cash purchases of
newly issued shares. Whether you are reinvesting dividends or making optional cash purchases, you
may not purchase shares of our common stock on any particular trading day for an amount, less any
brokerage commissions, trading fees and any other costs of purchase paid by us, which is less than
95% of the average of the high and low NYSE prices on that particular trading day. In the event
that shares would be purchased for an amount, less any brokerage commissions, trading fees and
other costs, which is below 95% of this average, your purchase price, less any brokerage
commissions, trading fees and other costs, will equal 95% of the average of the high and low NYSE
prices on that day.
14. Are there limitations that apply to optional cash purchases made in excess of
the maximum limit?
We will consider requests for optional cash purchases in excess of $10,000 on a
case-by-case basis and approve or deny each request in our sole discretion based on a number of
factors. See Question 15, “May a stockholder request a waiver of the purchase limitation?” All
requests for a waiver must include your representation to us that:
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you are not purchasing shares to engage in arbitrage activities; |
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you have not sold and will not sell shares of our common stock (including short sales)
during the 10-day period immediately prior to the investment date; and |
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you are not engaging in an unlawful distribution of our common stock or engaging in
underwriting activities as defined under applicable law. |
As a condition to granting any requests for a waiver of the purchase limitation, we may
require that you make additional representations to us relating to your beneficial interest in our
securities, your trading activity in our common stock and your intention with respect to the shares
you purchase pursuant to your request for a waiver of the purchase limitation.
15. May a stockholder request a waiver of the purchase limitation?
You may make optional cash purchases in excess of $10,000 during any calendar month only
pursuant to a request for waiver approved by us in our sole and absolute discretion. A request for
waiver should be sent to us by facsimile (858) 485-9843, Attention: Chief Financial Officer, by
2:00 p.m. Pacific Time, at least five business days prior to the investment date. In the event that
a request for waiver is received by us after this date, the waiver will not be approved for that
investment date and your optional cash purchase will be limited to $10,000 for that investment
date. If your request for a waiver is not timely, or if we deny your request for a waiver, the plan
agent will refund the entire amount without interest thereon. The request for waiver should not be
sent to the plan agent. The request for waiver form will be furnished by us or the plan agent at
the address and telephone number referenced above in Question 4, “Who will administer the plan?” We
have sole and absolute discretion to grant any approval for optional cash purchases in excess of
the allowable maximum amounts.
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In deciding whether to approve a request for waiver, we will consider relevant factors,
including, but not limited to:
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the extent and nature of your participation in the plan; |
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our need for additional funds; |
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the attractiveness of obtaining the additional funds through the sale of common stock
under the plan as compared to other sources of funds; |
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the purchase price likely to apply to any sale of common stock; and |
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the aggregate amount of optional cash purchases for which requests for waiver have been submitted by all participants. |
If requests for waiver are submitted for any investment date for an aggregate amount in
excess of the amount we are then willing to accept, we may honor those requests by any method that
we determine to be appropriate. With regard to optional cash purchases made pursuant to a request
for waiver, the plan does not provide for a predetermined maximum limit on the amount that you may
invest or on the number of shares that may be purchased. We reserve the right to modify, suspend or
terminate participation in the plan for any reason whatsoever including the elimination of
practices that are not consistent with the purposes of the plan.
Any person who acquires shares of common stock through the plan and resells them shortly
before or after acquiring them may be considered to be an underwriter within the meaning of the
Securities Act. We have no arrangements or understandings, formal or informal, with any person
relating to a distribution of shares to be received pursuant to the plan by such persons. See “Plan
of Distribution.”
16. How and when will we determine whether shares of common stock will be newly
issued or purchased in the market, and how and when will we establish a discount?
We may, without prior notice to you, change our determination as to whether common stock
will be purchased by the plan agent directly from us, in the open market or in privately negotiated
transactions from third parties or in a combination of both, in connection with the purchase of
shares of common stock from reinvested dividends or from optional cash purchases. We will not,
however, change our determination more than once in any three-month period.
You may not be able to depend on the availability of a market discount regarding shares
acquired from newly issued company stock. While a discount from market prices of up to 5% may be
established, the discount is subject to change from time to time and is also subject to
discontinuance at our discretion at any time. We will not, however, change our determination more
than once in any three-month period.
Not later than three business days prior to the investment date for the applicable month,
you may obtain the discount applicable to the next investment date by telephoning us at (858)
485-9840. We will not offer a discount for common stock purchased in the open market or in
privately negotiated transactions.
17. How many shares are being sold under the plan?
The plan agent may purchase shares (1) in the open market or privately negotiated
purchases or (2) from our authorized but unissued shares of common stock, or a combination of both.
There is no limit on the number of shares that the plan agent may purchase in the open market or
pursuant to privately negotiated purchases, and initially 5,000,000 shares of common stock have
been authorized to be newly issued and sold under the plan.
However, shares of common stock purchased by the plan agent for optional cash purchases made
above the $10,000 maximum limit with our permission must be acquired from newly issued common stock
and may not be acquired from open market purchases or privately negotiated transactions. See
Question 13, “At what price will shares be purchased?”
Because we presently expect to continue the plan indefinitely, we expect to authorize
additional shares from time to time as necessary for purposes of the plan.
18. When will shares be acquired under the plan?
If we elect to provide shares for the plan through newly issued stock, shares will be
credited to your account as follows:
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if you are an existing stockholder reinvesting some or all of your dividends
automatically, shares will be issued and credited to your account as of the applicable date
we pay dividends; provided, that if no trades of our common stock are reported on
the NYSE on the date we pay dividends, the plan agent shall apply such reinvested dividends
on the next trading day on which there are trades of our common stock reported on the NYSE;
or |
10
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if you are making optional cash purchases, shares will be issued and credited to your
account as of the applicable investment date. Shares will generally be made available
within three business days following the investment date. |
If we elect to acquire shares for the plan through the open market or in privately
negotiated transactions, the plan agent will purchase the shares as soon as practicable on the
applicable date we pay dividends or the applicable investment date, in the case of the reinvestment
of dividends and optional cash purchases, respectively. The date these shares will be deemed
acquired and credited to your account will be the date we pay dividends or the investment date.
We intend to make quarterly distributions to our stockholders in amounts sufficient to
maintain our qualification as a REIT under the Code. All distributions will be made by us at the
discretion of our board of directors and will depend upon our earnings and financial condition, the
amount of distributions necessary to maintain our REIT status and those other factors as our board
of directors may deem relevant. There can be no assurance as to the declaration or payment of a
dividend, and nothing contained in the plan obligates us to declare or pay any dividend on our
common stock. The plan does not represent a guarantee of future dividends.
19. How are optional cash purchases made?
All plan participants are eligible to request optional cash purchases at any time. Other
interested investors that are not one of our stockholders are also eligible to make an initial
investment in common stock through an optional cash purchase by submitting an enrollment form.
You can make an optional cash investment when joining the plan by enclosing a check with
the enrollment form. Thereafter, optional cash investments should be accompanied by the transaction
request form located at the bottom of your statement or transaction advice. Using this form
expedites the purchase and ensures proper posting of the shares to your account. Replacement
statements may be requested by contacting the plan agent’s Shareholder Service Center at (800)
524-4458.
Individuals who elect to make monthly purchases may do so by check or by Electronic Funds
Transfer, or EFT. If the second option is chosen your optional cash investment will be deducted
from your checking or savings account on the 26th day of the calendar month (unless the 26th
calendar day is a Saturday, Sunday or bank holiday, in which case your optional cash investment
will be deducted on the first business day following the 26th calendar day of that month).
Optional cash payments may also be made by check drawn on a U.S. bank, in U.S. currency,
payable to “The Bank of New York – BioMed Realty Trust, Inc.” Mail the transaction request form
attached to the bottom of your statement along with your check to the plan administrator using the
address indicated on page 6 . Third party checks will not be accepted and will be returned to
sender.
In the event that an optional cash investment check is returned unpaid for any reason or
your designated bank account for EFT does not have sufficient funds for your authorized monthly
deduction, the plan agent will immediately remove from your account any shares already purchased
upon the prior credit for such funds. The plan agent will thereupon be entitled to sell any such
shares to satisfy any uncollected amounts. If the net proceeds of the sale of such shares are
insufficient to satisfy the balance of the uncollected amounts, the plan agent reserves the right
to sell such additional shares from your account as may be necessary to satisfy the uncollected
balance.
It is your responsibility to immediately notify The Bank of New York of any change in EFT
information as it relates to your authorized monthly deductions. Changes to EFT information must be
submitted to The Bank of New York in writing. Participants may call (800) 524-4458 and request a
new EFT enrollment form.
Participants will be charged a fee of $20.00 for returned checks and failed automatic EFT
investments.
Optional cash purchases should be received by the plan agent at least one business day
prior to the investment date. All optional cash purchases made in excess of the plan limit with our
permission may be made only by wire transfer to the account referenced on the waiver form.
Inquiries regarding other forms of payments and all other written inquiries should be directed to
the plan agent at the address referenced herein.
11
20. What are the federal income tax consequences of participating in the plan?
If you reinvest dividends, you will still be treated for federal income tax purposes as
having received a dividend on the dividend payment date. If you reinvest dividends, you will be
liable for the payment of any income tax on the dividends despite not receiving cash to satisfy the
tax liability. In addition, for reinvested dividends and optional cash purchases, you will be
treated as having received a constructive distribution, which may give rise to additional tax
liability, to the extent you purchase shares at a discount or we pay brokerage commissions on your
behalf. See “Certain Federal Income Tax Consequences.”
21. What if I have more than one account?
For purposes of the limitations discussed in this prospectus, we may aggregate all
optional cash purchases for you if you have more than one account which uses the same social
security or taxpayer identification number. If you are unable to supply a social security or
taxpayer identification number, your participation may be limited by us to only one plan account.
Also for the purpose of these limitations, all plan accounts that we believe to be under common
control or management or to have common ultimate beneficial ownership may be aggregated. Unless we
have determined that reinvestment of dividends and optional cash purchases for each account would
be consistent with the purposes of the plan, we will have the right to aggregate all of these
accounts and to return, without interest, any amounts in excess of the investment limitations.
22. Will certificates be issued for share purchases?
Share certificates will not be issued unless a request is made to the plan agent. All
shares purchased pursuant to the plan may be held together in the name of the plan agent or its
nominee and credited to each individual account in “book-entry” form. This service protects against
the loss, theft, or destruction of certificates evidencing shares. Upon your request, upon your
withdrawal from the plan or upon termination of the plan, the plan agent will have certificates
issued and delivered for all full shares credited to your account. Certificates will be issued only
in the same names as those enrolled in the plan. In no event will certificates for fractional
shares be issued.
23. May I add shares of common stock to my account by transferring stock
certificates that I possess?
You may send to the plan for safekeeping all common stock certificates which you hold.
The safekeeping of shares offers the advantage of protection against loss, theft or destruction of
certificates as well as convenience, if and when shares are sold through the plan. All shares
represented by certificates will be kept for safekeeping in “book-entry” form and combined with any
full and fractional shares then held by the plan for you. To deposit certificates for safekeeping
under the plan, you must submit the transaction request form attached to the bottom of your
statement. Stock certificates and the transaction request form as well as all other transaction
processing should be directed to the plan agent at:
The Bank of New York
Dividend Reinvestment Services
P.O. Box 1958
Newark, New Jersey 07101-7924
All written inquiries about the safekeeping service or otherwise should be directed to
the plan agent at:
The Bank of New York
c/o Investor Relations Department
P.O. Box 11258
Church Street Station
New York, New York 10286-1258
24. What reports will be sent to participants in the plan?
Unless you participate in the plan through a broker, bank or nominee, you will receive from
the plan agent a detailed statement of your account following each dividend payment and when there
is purchase activity in your account. These detailed statements will show total cash dividends
received, optional cash purchases made, shares purchased, including fractional shares, and price
paid per share in such year, and the total shares held in the plan. You should keep these
statements to determine the tax basis for shares purchased pursuant to the plan.
12
If the purchase involves dividend reinvestment, then the statement will also show your
total distribution and the amount of your dividend that was reinvested in shares of common stock.
In addition, the plan agent will send to you a copy of the annual report, proxy statements and
federal income tax information for reporting distributions in addition to any other reports that it
may send as it sees fit.
The plan agent will send a statement following any sale activity in your account. In this
statement, you will receive a check with a Form 1099-B and information regarding the trade such as
sale price, shares sold, fees, net dollars and taxes, if any. The sale will be recapped on your
quarterly dividend statement.
Both statements for purchases and sales will contain year-to-date summary information.
You should keep these statements to determine the tax basis for shares purchased pursuant to the
plan. Any participant that participates in the plan through a broker, bank or nominee, should
contact that party for a similar statement.
25. How may I withdraw from the plan?
You may terminate participation in the plan by submitting to the plan agent the
transaction request form attached to the bottom of your statement. After the plan agent receives
the termination notice, dividends will be sent to you in the usual manner and no further optional
cash purchases may be made until and unless you re-enroll in the plan. Notice of termination must
be received by the plan agent at least one business day before an investment date. Once termination
has been effected, the plan agent will issue to you a certificate for all whole shares held under
the plan or transfer the shares in accordance with your directions. Alternatively, you may specify
in the termination notice that some or all of the shares be sold. Any fractional shares held in
your account under the plan at the time of termination will be converted to cash at the average
price the plan agent obtains for all shares sold on that particular trading day, net of any
brokerage commissions. If you dispose of all shares represented by certificates registered in your
name on our books but do not give notice of termination under the plan, the plan agent will
continue to reinvest dividends on shares held in your account under the plan until otherwise
directed. If the request is received on or after the record date for a dividend, any cash dividend
paid on that account will be reinvested for the account. The request will then be processed as soon
as practicable after the dividend is reinvested and the additional shares are credited to your
account. There will be no cost to you with respect to termination of your reinvestment of dividends
through the plan other than the applicable sales fee with respect to any shares sold.
If your plan account balance falls below one full share, the plan agent reserves the
right to liquidate and remit the proceeds, less any applicable fees, to you at your address of
record and to terminate your participation in the plan. We may also terminate the plan or your
participation in the plan after written notice in advance mailed to you at the address appearing on
the plan agent’s records. Participants whose participation in the plan has been terminated will
receive certificates for whole shares held in their accounts or may have their shares transferred
in accordance with their directions, and a check for the cash value of any fractional share held in
any plan account so terminated less any applicable fees.
26. What happens if I sell or transfer shares of stock or acquire additional
shares of stock?
You may instruct the plan agent to sell some or all of your shares held in your account
by notifying the plan agent by using the form included with account statements. Please note that
your sale order will not be executed on the day your order is placed. You should therefore
anticipate a difference between the price of the stock on the date you place the order and the
price at which the shares are sold.
Sale order via interactive voice response system. The plan agent’s recommended method
for placing sale orders is via the Interactive Voice Response system, or IVR. To place a sale
order, telephone the Shareholder Service Center at (800) 524-4458 and enter your social security
number or taxpayer identification number at the prompt. Daily sale orders are generally accepted
until 6:00 p.m. Eastern Time. Sale orders placed via the IVR before 6:00 p.m. generally will be
sold within two business days and in most cases will be sold on the same or the next business day.
Sales placed after 6:00 p.m. will be considered received the next business day. Sales are subject
to stock exchange holidays, early closings and black-out periods imposed by us.
Sale order by mail. You may use the stub from the plan statement that you receive from
The Bank of New York to sell your shares. You must complete and sign the stub and mail the
instructions to the plan agent. All listed participants must sign the instruction form. Sale orders
received by mail will be executed by the plan agent promptly after receipt.
The plan agent will sell shares through an Affiliated Broker, as soon as practicable
after receipt of a proper notice. Shares to be sold may be commingled with those of other
participants requesting sale of their shares, and the proceeds to each participant will be based on
the average price for all shares sold by the plan agent during the day of sale. You should
understand that the price of the common stock may go down as well as up between the date a request
to sell is received and the date the sale is executed. The plan does not offer the ability for you
to specify either the dates or the prices at which shares are to be sold through the plan agent.
13
There is a transaction fee for selling shares through the plan agent in addition to your
pro rata share of trading fees or brokerage commissions.
If you have elected to have dividends automatically reinvested in the plan and
subsequently sell or transfer all or any part of the shares registered in your name, automatic
reinvestment will continue as long as shares are registered in your name or held for you by the
plan agent or until termination of enrollment. Similarly, if you have elected the full or partial
dividend reinvestment option under the plan and subsequently acquire additional shares registered
in your name, dividends paid on the shares will automatically be reinvested until termination of
enrollment. If, however, you have elected the optional cash purchases only option and subsequently
acquire additional shares that are registered in your name, dividends paid on the shares will not
be automatically reinvested under the plan unless you change your enrollment to indicate your
desire to reinvest dividends.
27. How may I transfer all or a part of my shares held in the plan to another
person?
You may transfer ownership of all or part of your shares held in the plan through gift,
private sale or otherwise, by mailing to the plan agent at the address listed in Question 4, “Who
will administer the plan?” a properly executed stock assignment, along with a letter with specific
instructions regarding the transfer and a Substitute Form W-9 (Certification of Taxpayer
Identification Number) completed by the transferee. Requests for transfer of shares held in the
plan are subject to the same requirements as the transfer of common stock certificates, including
the requirement of a medallion signature guarantee on the stock assignment. The plan agent will
provide you with the appropriate forms upon request. If you have any stock certificates bearing a
restrictive legend in your account, the plan agent will comply with the provisions of the
restrictive legend before effecting a sale or transfer of the restricted shares. All transfers will
be subject to the limitations on ownership and transfer provided in our charter which are
summarized below and which are incorporated into this prospectus by reference.
28. How will my shares be voted?
For any meeting of stockholders, you will receive proxy materials in order to vote all
shares held by the plan for your account. All shares will be voted as designated by you or may be
voted in person at the meeting of stockholders. If no instructions or executed proxies are
received, the shares will not be voted. If you hold your shares through a broker, bank or nominee,
that person will receive the proxy materials and you will need to contact that person in order to
vote your shares.
29. Who pays the expenses of the plan?
We will pay all day-to-day costs of the administration of the plan. You will only be
responsible for a transaction fee and your pro rata share of trading fees and any brokerage
commissions associated with your sales of shares of common stock attributable to you under the
plan. We will pay for all fees and commissions associated with your purchases under the plan.
30. What are our or the plan agent’s responsibilities under the plan?
Neither we, any of our agents nor the plan agent will be liable for any act done in good
faith or for any good faith omission to act, including, without limitation, any claims of liability
arising out of (1) a failure to terminate a participant’s account upon the participant’s death or
adjudication of incompetence prior to the receipt of notice in writing of the death or adjudication
of incompetence, (2) the prices at which shares are purchased or sold for the benefit of a
participant’s account, (3) the times when purchases are made or (4) fluctuations in the market
value of the common stock. Neither we, any of our agents nor the plan agent has any duties,
responsibilities or liabilities except as expressly set forth in the plan or as imposed by
applicable laws, including, without limitation, federal securities laws. None of our directors, officers, employees or stockholders will have
any personal liability under the plan. We, any of our agents and the plan agent will be entitled
to rely on completed forms and the proof of due authority to participate in the plan, without
further responsibility of investigation or inquiry. You should recognize that we cannot assure a
profit or protect against a loss on the shares purchased by you under the plan and we take no
position on whether you should participate in the plan.
31. What happens if we issue a stock dividend or subscription rights, declare a
stock split or make any other distribution in respect of shares of our common stock?
You will automatically receive a credit to your plan account for any stock dividend,
stock split or other distribution in respect of our shares of common stock that we may declare. In
the event that we make available to the holders of our common stock subscription rights to purchase
additional shares of common stock or other securities, the plan agent will sell the rights accruing
to all shares held by the plan agent for participants and will apply the net proceeds of the sale
to the purchase of common stock with the next monthly optional cash purchase. If you do not want
the plan agent to sell the rights and invest the proceeds, you can notify the plan agent by
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submitting an updated enrollment form and you can request distribution of subscription or
other purchase rights directly to yourself. In the event these rights are not saleable or
detachable, the plan will hold the rights for your benefit.
This will permit you to personally exercise, transfer or sell the rights on the shares.
The processing of dividend reinvestments or optional cash purchases may be curtailed or suspended
until the completion of any stock dividend, stock split or other distribution.
32. May shares in my account be pledged?
You may not pledge shares credited to your or any other participant’s account and any
purported pledge will be void. If you wish to pledge shares, those shares must be withdrawn from
the plan.
33. May the plan be changed or terminated?
We may amend, modify, suspend or terminate the plan at any time. You will be notified by
the plan agent in writing of any substantial modifications made to the plan. Any amendment may
include an appointment by the plan agent in its place of a successor agent under the terms and
conditions set forth herein, in which event we are authorized to pay the successor for the account
of each participant, all dividends and distributions payable on common stock held by the
participant under the plan for application by the successor as provided herein. Notwithstanding the
foregoing, this action will not have any retroactive effect that would prejudice your interests.
34. Are there any risks associated with the plan?
Your investment in shares held in your plan account is no different from your investment in
shares held directly. Neither we nor the plan agent can assure you a profit or protect you against
a loss on the shares that you purchase. You bear the risk of any loss and enjoy the benefits of any
gain from market price changes with respect to such shares. You should read carefully the risk
factors described in our Securities and Exchange Commission filings before investing in our common
stock. See “Risk Factors” on page 1 of this prospectus.
35. How will you interpret and regulate the plan?
We will interpret, regulate and take any other action in connection with the plan that we deem
reasonably necessary to carry out the plan. We may adopt rules and regulations to facilitate the
administration of the plan. As a participant in the plan, you will be bound by any actions taken by
us or the plan agent.
36. What law governs the plan?
The plan will be governed by the laws of the State of Maryland, our state of
incorporation.
DESCRIPTION OF CAPITAL STOCK
This prospectus describes the general terms of our capital stock. For a more detailed
description of these securities, you should read the applicable provisions of the Maryland General
Corporation Law, or MGCL, and our charter and bylaws, as amended and supplemented from time to
time. Copies of our existing charter documents are filed with the Securities and Exchange
Commission and are incorporated by reference as exhibits to the registration statement of which
this prospectus is a part. See “Where You Can Find More Information” and “Incorporation of Certain
Documents by Reference.”
Common Stock
Our charter provides that we may issue up to 100,000,000 shares of our common stock, $0.01 par
value per share. Our charter authorizes our board of directors to amend our charter to increase or
decrease the number of authorized shares of any class or series without stockholder approval. As of
May 31, 2007, 65,463,439 shares of our common stock were issued and outstanding. Under Maryland
law, stockholders generally are not liable for the corporation’s debts or obligations.
All shares of our common stock offered hereby will be duly authorized, fully paid and
nonassessable. Subject to the preferential rights of any other class or series of stock and to the
provisions of our charter regarding the restrictions on transfer of stock, holders of shares of our
common stock are entitled to receive dividends on such stock if, as and when authorized by our
board of directors out of assets legally available therefor and declared by us and to share ratably
in the assets of our company legally available for distribution
15
to our stockholders in the event of our liquidation, dissolution or winding up after payment
of or adequate provision for all known debts and liabilities of our company.
Subject to the provisions of our charter regarding the restrictions on transfer of stock, each
outstanding share of our common stock entitles the holder to one vote on all matters submitted to a
vote of stockholders, including the election of directors and, except as provided with respect to
any other class or series of stock, the holders of such shares will possess the exclusive voting
power. There is no cumulative voting in the election of our directors, which means that the holders
of a majority of the outstanding shares of our common stock can elect all of the directors then
standing for election and the holders of the remaining shares will not be able to elect any
directors.
Holders of shares of our common stock have no preference, conversion, exchange, sinking fund,
redemption or appraisal rights and have no preemptive rights to subscribe for any securities of our
company. Subject to the provisions of our charter regarding the restrictions on transfer of stock,
shares of our common stock will have equal dividend, liquidation and other rights.
Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge,
sell all or substantially all of its assets, engage in a share exchange or engage in similar
transactions outside the ordinary course of business unless such action is advised by the board of
directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds
of the votes entitled to be cast on the matter unless a lesser percentage (but not less than a
majority of all of the votes entitled to be cast on the matter) is set forth in the corporation’s
charter. Our charter provides, except with respect to an amendment to the section relating to the
removal of directors and the corresponding reference in the general amendment provision, that the
foregoing items may be approved by a majority of the votes entitled to be cast on the matter.
However, Maryland law permits a corporation to transfer all or substantially all of its assets
without the approval of the stockholders of the corporation to one or more persons if all of the
equity interests of the person or persons are owned, directly or indirectly, by the corporation.
Because operating assets may be held by a corporation’s subsidiaries, as in our situation, this may
mean that our subsidiary can merge or transfer all of its assets without a vote of our
stockholders.
Our charter authorizes our board of directors to classify and reclassify any unissued shares
of our common stock into other classes or series of stock. Prior to issuance of shares of each
class or series, our board of directors is required by the MGCL and our charter to set, subject to
the provisions of our charter regarding the restrictions on transfer of stock, the terms,
preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends
or other distributions, qualifications and terms or conditions of redemption for each such class or
series.
Power to Increase Authorized Stock and Issue Additional Shares of Our Common Stock
We believe that the power of our board of directors to amend our charter to increase the
number of authorized shares of stock, to cause us to issue additional authorized but unissued
shares of our common stock and to classify or reclassify unissued shares of our common stock and
thereafter to cause us to issue such classified or reclassified shares of stock will provide us
with increased flexibility in structuring possible future financings and acquisitions and in
meeting other needs which might arise. The additional classes or series, as well as the common
stock, will be available for issuance without further action by our stockholders, unless
stockholder consent is required by applicable law or the rules of any stock exchange or automated
quotation system on which our securities may be listed or traded. Although our board of directors
does not intend to do so, it could authorize us to issue a class or series that could, depending
upon the terms of the particular class or series, delay, defer or prevent a transaction or a change
of control of our company that might involve a premium price for our stockholders or otherwise be
in their best interest.
Preferred Stock
Our charter provides that we may issue up to 15,000,000 shares of preferred stock, $0.01 par
value per share. Our charter authorizes our board of directors to amend the charter to increase or
decrease the number of authorized shares of any class or series without stockholder approval.
As of May 31, 2007, 9,200,000 shares of Series A preferred stock were issued and outstanding.
Dividends are cumulative on the Series A preferred stock from the date of original issuance in the
amount of $1.84375 per share each year, which is equivalent to 7.375% of the $25.00 liquidation
preference per share. Dividends on the Series A preferred stock are payable quarterly in arrears on
or about the 15th day of January, April, July and October of each year. Following a change in
control, if the Series A preferred stock is not listed on the NYSE, the American Stock Exchange or
NASDAQ, holders will be entitled to receive (when and as authorized by the board of directors and
declared by us), cumulative cash dividends from, but excluding, the first date on which both the
change of
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control and the delisting occurred at an increased rate of 8.375% per annum of the $25.00
liquidation preference per share (equivalent to an annual rate of $2.09375 per share) for as long
as the Series A preferred stock is not listed. The Series A preferred stock does not have a stated
maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon
liquidation, dissolution or winding up, the Series A preferred stock will rank senior to the common
stock with respect to the payment of distributions and other amounts. We are not allowed to redeem
the Series A preferred stock before January 18, 2012, except in limited circumstances to preserve
our status as a REIT. On or after January 18, 2012, we may, at our option, redeem the Series A
preferred stock, in whole or in part, at any time or from time to time, for cash at a redemption
price of $25.00 per share, plus all accrued and unpaid dividends on such Series A preferred stock
up to, but excluding the redemption date. Holders of the Series A preferred stock generally have no
voting rights except for limited voting rights if we fail to pay dividends for six or more
quarterly periods (whether or not consecutive) and in certain other circumstances. The Series A
preferred stock is not convertible into or exchangeable for any of our other property or
securities.
Our charter authorizes our board of directors to classify any unissued shares of preferred
stock and to reclassify any previously classified but unissued shares of any class or series. Prior
to issuance of shares of each class or series, our board of directors is required by the MGCL and
our charter to set the terms, preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or conditions of
redemption for each such class or series.
The issuance of preferred stock could adversely affect the voting power, dividend rights and
other rights of holders of our common stock. Although the board of directors does not have the
intention at this present time, it could establish a series of preferred stock, that could,
depending on the terms of the series, delay, defer or prevent a transaction or a change in control
of us that might involve a premium price for our common stock or otherwise be in the best interest
of the holders thereof. Management believes that the availability of preferred stock will provide
the company with increased flexibility in structuring possible future financing and acquisitions
and in meeting other needs that might arise.
Maryland law provides that no stockholders, including holders of preferred stock, shall be
personally liable for our acts and obligations and that our funds and property shall be the only
recourse for these acts or obligations.
Restrictions on Ownership and Transfer
To assist us in complying with certain federal income tax requirements applicable to REITs, we
have adopted certain restrictions relating to the ownership and transfer of our stock. See
“Restrictions on Ownership and Transfer.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock and preferred stock is The Bank of New
York.
RESTRICTIONS ON OWNERSHIP AND TRANSFER
The following summary with respect to restrictions on ownership and transfer of our stock sets
forth certain general terms and provisions of our charter documents. This summary does not purport
to be complete and is subject to and qualified in its entirety by reference to our charter
documents, as amended and supplemented from time to time. Copies of our existing charter documents
are filed with the Securities and Exchange Commission and are incorporated by reference as exhibits
to the registration statement of which this prospectus is a part. See “Where You Can Find More
Information” and “Incorporation of Certain Documents by Reference.”
In order for us to qualify as a REIT under the Code, our stock must be beneficially owned by
100 or more persons during at least 335 days of a taxable year of twelve months (other than the
first year for which an election to be a REIT has been made) or during a proportionate part of a
shorter taxable year. Also, not more than 50% of the value of our outstanding shares of stock may
be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year (other than the first year for which an
election to be a REIT has been made).
Our charter contains restrictions on the amount of shares of our stock that a person may own.
No person may acquire or hold, directly or indirectly, in excess of 9.8% in value of the aggregate
of our outstanding shares of capital stock. In addition, no person may acquire or hold, directly or
indirectly, in excess of 9.8% (in value or in number of shares, whichever is more restrictive) of
(i) our outstanding shares of common stock or (ii) our outstanding Series A preferred stock.
17
Our charter further prohibits (1) any person from owning shares of our stock that would result
in our being “closely held” under Section 856(h) of the Code or otherwise cause us to fail to
qualify as a REIT and (2) any person from transferring shares of our stock if the transfer would
result in our stock being owned by fewer than 100 persons. Any person who acquires or intends to
acquire shares of our stock that may violate any of these restrictions, or who is the intended
transferee of shares of our stock which are transferred to a trust, as described below, is required
to give us immediate notice and provide us with such information as we may request in order to
determine the effect of the transfer on our status as a REIT. The above restrictions will not apply
if our board of directors determines that it is no longer in our best interests to continue to
qualify as a REIT.
Our board of directors may, in its sole discretion, waive the ownership limit with respect to
a particular stockholder if it:
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determines that such ownership will not cause any individual’s beneficial ownership of shares of our stock to violate the ownership limit or that any exemption from the ownership
limit will not jeopardize our status as a REIT, and |
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• |
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determines that such stockholder does not and will not own, actually or constructively,
an interest in a tenant of ours (or a tenant of any entity owned in whole or in part by us)
that would cause us to own, actually or constructively, more than a 9.9% interest (as set
forth in Section 856(d)(2)(B) of the Code) in such tenant or that any such ownership would
not cause us to fail to qualify as a REIT under the Code. |
As a condition of our waiver, our board of directors may require an opinion of counsel or an
Internal Revenue Service, or IRS, ruling satisfactory to our board of directors, and/or
representations or undertakings from the applicant with respect to preserving our REIT status.
Any attempted transfer of our stock which, if effective, would result in our stock being owned
by fewer than 100 persons will be null and void. Any attempted transfer of our stock which, if
effective, would result in violation of the ownership limits discussed above or in our being
“closely held” under Section 856(h) of the Code or otherwise failing to qualify as a REIT, will
cause the number of shares causing the violation (rounded up to the nearest whole share) to be
automatically transferred to a trust for the exclusive benefit of one or more charitable
beneficiaries, and the proposed transferee will not acquire any rights in the shares. The automatic
transfer will be deemed to be effective as of the close of business on the business day prior to
the date of the transfer. Shares of our stock held in the trust will be issued and outstanding
shares. The proposed transferee will not benefit economically from ownership of any shares of stock
held in the trust, will have no rights to dividends, to vote the shares, or to any other rights
attributable to the shares of stock held in the trust. The trustee of the trust will have all
voting rights and rights to dividends or other distributions with respect to shares held in the
trust. These rights will be exercised for the exclusive benefit of a charitable beneficiary. Any
dividend or other distribution paid prior to our discovery that shares of stock have been
transferred to the trust must be paid by the recipient to the trustee upon demand. Any dividend or
other distribution authorized but unpaid will be paid when due to the trustee. Any dividend or
distribution paid to the trustee will be held in trust for the charitable beneficiary. Subject to
Maryland law, the trustee will have the authority (1) to rescind as void any vote cast by the
proposed transferee prior to our discovery that the shares have been transferred to the trust and
(2) to recast the vote in accordance with the desires of the trustee acting for the benefit of the
charitable beneficiary. However, if we have already taken irreversible corporate action, then the
trustee will not have the authority to rescind and recast the vote.
Within 20 days of receiving notice from us that shares of our stock have been transferred to
the trust, the trustee will sell the shares to a person designated by the trustee, whose ownership
of the shares will not violate the above ownership limitations. Upon the sale, the interest of the
charitable beneficiary in the shares sold will terminate and the trustee will distribute the net
proceeds of the sale to the proposed transferee and to the charitable beneficiary as follows. The
proposed transferee will receive the lesser of (1) the price paid by the proposed transferee for
the shares or, if the proposed transferee did not give value for the shares in connection with the
event causing the shares to be held in the trust (e.g., a gift, devise or other similar
transaction), the market price of the shares on the day of the event causing the shares to be held
in the trust and (2) the price received by the trustee from the sale or other disposition of the
shares. Any net sale proceeds in excess of the amount payable to the proposed transferee will be
paid immediately to the charitable beneficiary. If, prior to our discovery that shares of our stock
have been transferred to the trust, the shares are sold by the proposed transferee, then (1) the
shares will be deemed to have been sold on behalf of the trust and (2) to the extent that the
proposed transferee received an amount for the shares that exceeds the amount he was entitled to
receive, the excess must be paid to the trustee upon demand.
In addition, shares of our stock held in the trust will be deemed to have been offered for
sale to us, or our designee, at a price per share equal to the lesser of (1) the price per share in
the transaction that resulted in the transfer to the trust (or, in the case of a devise
18
or gift, the market price at the time of the devise or gift) and (2) the market price on the
date we, or our designee, accept the offer. We will have the right to accept the offer until the
trustee has sold the shares. Upon a sale to us, the interest of the charitable beneficiary in the
shares sold will terminate and the trustee will distribute the net proceeds of the sale to the
proposed transferee.
All certificates representing shares of our stock will bear a legend referring to the
restrictions described above.
Every owner of 5% or more (or such lower percentage as required by the Code or the regulations
promulgated thereunder) of our stock, within 30 days after the end of each taxable year, is
required to give us written notice, stating his name and address, the number of shares of each
class and series of our stock which he beneficially owns and a description of the manner in which
the shares are held. Each such owner will provide us with such additional information as we may
request in order to determine the effect, if any, of his beneficial ownership on our status as a
REIT and to ensure compliance with the ownership limits. In addition, each stockholder will upon
demand be required to provide us with such information as we may request in good faith in order to
determine our status as a REIT and to comply with the requirements of any taxing authority or
governmental authority or to determine such compliance.
These ownership limits could delay, defer or prevent a transaction or a change in control that
might involve a premium price for our common stock or otherwise be in the best interest of our
stockholders.
DESCRIPTION OF THE
PARTNERSHIP AGREEMENT OF BIOMED REALTY, L.P.
The material terms and provisions of the Agreement of Limited Partnership of BioMed
Realty, L.P. which we refer to as the “partnership agreement” are summarized below. For more
detail, you should refer to the partnership agreement itself, a copy of which is incorporated by
reference as an exhibit to the registration statement of which this prospectus is a part. See
“Where You Can Fin More Information” and “Incorporation of Certain Documents by Reference.” For
purposes of this section, references to “we,” “our,” “us” and “our company” refer to BioMed Realty
Trust, Inc.
Management of Our Operating Partnership
Our operating partnership, BioMed Realty, L.P., is a Maryland limited partnership that
was formed on April 30, 2004. Our company is the sole general partner of our operating partnership,
and we conduct substantially all of our business in or through it. As sole general partner of our
operating partnership, we exercise exclusive and complete responsibility and discretion in its
day-to-day management and control. We can cause our operating partnership to enter into certain
major transactions including acquisitions, dispositions and refinancings, subject to limited
exceptions. The limited partners of our operating partnership may not transact business for, or
participate in the management activities or decisions of, our operating partnership, except as
provided in the partnership agreement and as required by applicable law. Some restrictions in the
partnership agreement restrict our ability to engage in a business combination as more fully
described in “ — Termination Transactions” below.
The limited partners of our operating partnership expressly acknowledged that we, as
general partner of our operating partnership, are acting for the benefit of our operating
partnership, the limited partners and our stockholders collectively. Our company is under no
obligation to give priority to the separate interests of the limited partners or our stockholders
in deciding whether to cause our operating partnership to take or decline to take any actions. If
there is a conflict between the interests of our stockholders on one hand and the limited partners
on the other, we will endeavor in good faith to resolve the conflict in a manner not adverse to
either our stockholders or the limited partners; provided, however, that for so long as we own a
controlling interest in our operating partnership, any conflict that cannot be resolved in a manner
not adverse to either our stockholders or the limited partners will be resolved in favor of our
stockholders. We are not liable under the partnership agreement to our operating partnership or to
any partner for monetary damages for losses sustained, liabilities incurred or benefits not derived
by limited partners in connection with such decisions, so long as we have acted in good faith.
The partnership agreement provides that substantially all of our business activities,
including all activities pertaining to the acquisition and operation of properties, must be
conducted through our operating partnership, and that our operating partnership must be operated in
a manner that will enable our company to satisfy the requirements for being classified as a REIT.
Transferability of Interests
Except in connection with a transaction described in “— Termination Transactions” below,
we, as general partner, may not voluntarily withdraw from our operating partnership, or transfer or
assign all or any portion of our interest in our operating partnership, without the consent of the
holders of a majority of the limited partnership interests (including our 95.3% limited
19
partnership interest therein) except for permitted transfers to our affiliates. Currently, any
transfer of units by the limited partners, except to us, as general partner, to an affiliate of the
transferring limited partner, to other original limited partners, to immediate family members of
the transferring limited partner, to a trust for the benefit of a charitable beneficiary, or to a
lending institution as collateral for a bona fide loan, subject to specified limitations, will be
subject to a right of first refusal by us and must be made only to “accredited investors” as
defined under Rule 501 of the Securities Act.
Capital Contributions
We contributed to our operating partnership all of the net proceeds of our IPO as our
initial capital contribution in exchange for a 91.5% partnership interest. Some of our directors,
executive officers and their affiliates contributed properties and assets to our operating
partnership and became limited partners and, together with other limited partners, initially owned
the remaining 8.5% limited partnership interest. As of March 31, 2007, we owned a 95.7% partnership
interest and other limited partners, including some of our directors, executive officers and their
affiliates, owned the remaining 4.3% partnership interest (including long term incentive plan
units).
The partnership agreement provides that we, as general partner, may determine that our
operating partnership requires additional funds for the acquisition of additional properties or for
other purposes. Under the partnership agreement, we are obligated to contribute the proceeds of any
offering of stock as additional capital to our operating partnership. Our operating partnership is
authorized to cause partnership interests to be issued for less than fair market value if we
conclude in good faith that such issuance is in the interests of our operating partnership.
The partnership agreement provides that we may make additional capital contributions,
including properties, to our operating partnership in exchange for additional partnership units. If
we contribute additional capital and receive additional partnership interests for the capital
contribution, our percentage interests will be increased on a proportionate basis based on the
amount of the additional capital contributions and the value of our operating partnership at the
time of the contributions. Conversely, the percentage interests of the other limited partners will
be decreased on a proportionate basis. In addition, if we contribute additional capital and receive
additional partnership interests for the capital contribution, the capital accounts of the partners
may be adjusted upward or downward to reflect any unrealized gain or loss attributable to the
properties as if there were an actual sale of the properties at the fair market value thereof.
Limited partners have no preemptive right or obligation to make additional capital contributions.
Our operating partnership could issue preferred partnership interests in connection with
acquisitions of property or otherwise. Any such preferred partnership interests would have priority
over common partnership interests with respect to distributions from our operating partnership,
including the partnership interests that our wholly owned subsidiaries own.
Amendments of the Partnership Agreement
Amendments to the partnership agreement may be proposed by us, as general partner, or by
limited partners owning at least 25% of the units held by limited partners.
Generally, the partnership agreement may be amended, modified or terminated only with the
approval of partners holding 50% of all outstanding units (including the units held by us as
general partner and as a limited partner). However, as general partner, we will have the power to
unilaterally amend the partnership agreement without obtaining the consent of the limited partners
as may be required to:
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add to our obligations as general partner or surrender any right or power granted to us
as general partner for the benefit of the limited partners, |
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reflect the issuance of additional units or the admission, substitution, termination or
withdrawal of partners in accordance with the terms of the partnership agreement, |
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set forth or amend the designations, rights, powers, duties and preferences of the
holders of any additional partnership interests issued by our operating partnership, |
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reflect a change of an inconsequential nature that does not adversely affect the limited
partners in any material respect, |
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cure any ambiguity, correct or supplement any provisions of the partnership agreement
not inconsistent with law or with other provisions of the partnership agreement, or make
other changes concerning matters under the partnership agreement that will not otherwise be
inconsistent with the partnership agreement or law, |
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satisfy any requirements, conditions or guidelines of federal or state law, |
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reflect changes that are reasonably necessary for us, as general partner, to maintain our status as a REIT, or |
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modify the manner in which capital accounts are computed. |
Amendments that would convert a limited partner’s interest into a general partner’s
interest, adversely affect the limited liability of a limited partner, alter a partner’s right to
receive any distributions or allocations of profits or losses or materially alter or modify the
redemption rights described below (other than a change to reflect the seniority of any distribution
or liquidation rights of any preferred units issued in accordance with the partnership agreement)
must be approved by each limited partner that would be adversely affected by such amendment;
provided that any such amendment does not require the unanimous consent of all the partners who are
adversely affected unless the amendment is to be effective against all adversely affected partners.
In addition, without the written consent of limited partners holding a majority of the units,
we, as general partner, may not do any of the following:
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take any action in contravention of an express prohibition or limitation contained in
the partnership agreement, |
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enter into or conduct any business other than in connection with our role as general
partner of our operating partnership and our operation as a public reporting company and as
a REIT, |
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acquire an interest in real or personal property other than through our operating
partnership or our subsidiary partnerships, |
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withdraw from our operating partnership or transfer any portion of our general
partnership interest, except to an affiliate, or |
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be relieved of our obligations under the partnership agreement following any permitted
transfer of our general partnership interest. |
Redemption/Exchange Rights
Limited partners who acquired units in our formation transactions have the right to
require our operating partnership to redeem part or all of their units for cash based upon the fair
market value of an equivalent number of shares of our common stock at the time of the redemption.
Alternatively, we may elect to acquire those units in exchange for shares of our common stock. Our
acquisition will be on a one-for-one basis, subject to adjustment in the event of stock splits,
stock dividends, issuance of stock rights, specified extraordinary distributions and similar
events. We presently anticipate that we will elect to issue shares of our common stock in exchange
for units in connection with each redemption request, rather than having our operating partnership
redeem the units for cash. With each redemption or exchange, we increase our company’s percentage
ownership interest in our operating partnership. Limited partners who hold units may exercise this
redemption right from time to time, in whole or in part, except when, as a consequence of shares of
our common stock being issued, any person’s actual or constructive stock ownership would exceed our
company’s ownership limits, or violate any other restriction as provided in our charter as
described under the section entitled “Restrictions on Ownership and Transfer.” In all cases, unless
we agree otherwise, no limited partner may exercise its redemption right for fewer than 1,000 units
or, if a limited partner holds fewer than 1,000 units, all of the units held by such limited
partner.
Issuance of Additional Units, Common Stock or Convertible Securities
As sole general partner, we have the ability to cause our operating partnership to issue
additional units representing general and limited partnership interests. These additional units may
include preferred limited partnership units. In addition, we may issue additional shares of our
common stock or convertible securities, but only if we cause our operating partnership to issue to
us partnership interests or rights, options, warrants or convertible or exchangeable securities of
our operating partnership having parallel designations, preferences and other rights, so that the
economic interests of our operating partnership’s interests issued are substantially similar to the
securities that we have issued.
Tax Matters
We are the tax matters partner of our operating partnership. We have authority to make
tax elections under the Code on behalf of our operating partnership.
Allocations of Net Income and Net Losses to Partners
The net income or net loss of our operating partnership generally will be allocated to
us, as the general partner, and to the limited partners in accordance with our respective
percentage interests in our operating partnership. However, in some cases losses
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may be disproportionately allocated to partners who have guaranteed debt of our operating
partnership. The allocations described above are subject to special allocations relating to
depreciation deductions and to compliance with the provisions of Sections 704(b) and 704(c) of the
Code and the associated Treasury regulations. See “Material Federal Income Tax Considerations — Tax
Aspects of Our Operating Partnership, the Subsidiary Partnerships and the Limited Liability
Companies.”
Operations and Distributions
The partnership agreement provides that we, as general partner, will determine and
distribute the net operating cash revenues of our operating partnership, as well as the net sales
and refinancing proceeds, in such amount as determined by us in our sole discretion, quarterly, pro
rata in accordance with the partners’ percentage interests.
The partnership agreement provides that our operating partnership will assume and pay
when due, or reimburse us for payment of all costs and expenses relating to the operations of, or
for the benefit of, our operating partnership.
Termination Transactions
The partnership agreement provides that our company may not engage in any merger,
consolidation or other combination with or into another person, sale of all or substantially all of
our assets or any reclassification or any recapitalization or change in outstanding shares of our
equity interests, each a termination transaction, unless in connection with a termination
transaction either:
(1) all limited partners will receive, or have the right to elect to receive, for each
unit an amount of cash, securities, or other property equal to the product of:
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the number of shares of our common stock into which each unit is then exchangeable, and |
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the greatest amount of cash, securities or other property paid to the holder of one
share of our common stock in consideration of one share of our common stock in the
termination transaction, |
provided that, if, in connection with a termination transaction, a purchase, tender or
exchange offer is made to and accepted by the holders of more than 50% of the outstanding shares of
our common stock, each holder of units will receive, or will have the right to elect to receive,
the greatest amount of cash, securities, or other property which such holder would have received
had it exercised its redemption right and received shares of our common stock in exchange for its
units immediately prior to the expiration of such purchase, tender or exchange offer and accepted
such purchase, tender or exchange offer, or
(2) the following conditions are met:
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substantially all of the assets of the surviving entity are held directly or indirectly
by our operating partnership or another limited partnership or limited liability company
that is the surviving partnership of a merger, consolidation or combination of assets with
our operating partnership, |
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the holders of units own a percentage interest of the surviving partnership based on the
relative fair market value of the net assets of our operating partnership and the other net
assets of the surviving partnership immediately prior to the consummation of the
transaction, |
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the rights, preferences and privileges of such unit holders in the surviving partnership
are at least as favorable as those in effect immediately prior to the consummation of the
transaction and as those applicable to any other limited partners or non-managing members
of the surviving partnership, and |
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the limited partners may redeem their interests in the surviving partnership for either
the consideration available to the common limited partners pursuant to the first paragraph
in this section, or if the ultimate controlling person of the surviving partnership has
publicly traded common equity securities, shares of those common equity securities, at an
exchange ratio based on the relative fair market value of those securities and our common
stock. |
Term
Our operating partnership will continue in full force and effect until December 31, 2104,
or until sooner dissolved in accordance with its terms or as otherwise provided by law.
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Indemnification and Limitation of Liability
To the extent permitted by applicable law, the partnership agreement requires our
operating partnership to indemnify us, as general partner, and our officers, directors, employees,
agents and any other persons we may designate from and against any and all claims arising from
operations of our operating partnership in which any indemnitee may be involved, or is threatened
to be involved, as a party or otherwise, unless it is established that:
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the act or omission of the indemnitee was material to the matter giving rise to the
proceeding and either was committed in bad faith, fraud or was the result of active and
deliberate dishonesty, |
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the indemnitee actually received an improper personal benefit in money, property or
services, or |
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in the case of any criminal proceeding, the indemnitee had reasonable cause to believe
that the act or omission was unlawful. |
Similarly, we, as general partner of our operating partnership, and our officers,
directors, agents or employees, are not liable or accountable to our operating partnership for
losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or
mistakes of fact or law or any act or omission so long as we acted in good faith.
CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS
The following summary of certain provisions of Maryland law and of our charter and bylaws is
subject to and qualified in its entirety by reference to Maryland law and our charter and bylaws,
copies of which are exhibits to the registration statement of which this prospectus is a part. See
“Where You Can Find More Information.”
Our Board of Directors
Our charter and bylaws provide that our board of directors may establish the number of
directors of our company as long as the number is not fewer than the minimum required under the
MGCL nor, unless our bylaws are amended, more than 15. Any vacancy may be filled, at any regular
meeting or at any special meeting called for that purpose, by a majority of the remaining
directors.
Pursuant to our charter, each of our directors is elected by our stockholders to serve until
the next annual meeting and until his or her successor is duly elected and qualifies. Holders of
shares of our common stock will have no right to cumulative voting in the election of directors.
Consequently, at each annual meeting of stockholders, the holders of a majority of the shares of
our common stock will be able to elect all of our directors.
Removal of Directors
Our charter provides that a director may be removed only by the affirmative vote of at least
two-thirds of the votes entitled to be cast generally in the election of directors. This provision,
when coupled with the provision in our bylaws authorizing our board of directors to fill vacant
directorships, precludes stockholders from removing incumbent directors and filling the vacancies
created by such removal with their own nominees.
Business Combinations
Maryland law prohibits “business combinations” between us and an interested stockholder or an
affiliate of an interested stockholder for five years after the most recent date on which the
interested stockholder becomes an interested stockholder. These business combinations include a
merger, consolidation, share exchange or, in certain circumstances specified in the statute, an
asset transfer, issuance or transfer by us of equity securities, liquidation plan or
reclassification of equity securities. Maryland law defines an interested stockholder as:
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any person who beneficially owns 10% or more of the voting power of our stock, or |
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an affiliate or associate of ours who, at any time within the two-year period prior to
the date in question, was the beneficial owner of 10% or more of the voting power of our
then-outstanding voting stock. |
A person is not an interested stockholder if our board of directors approved in advance the
transaction by which the person otherwise would have become an interested stockholder. However, in
approving a transaction, our board of directors may provide that
its approval is subject to compliance, at or after the time of approval, with any terms and
conditions determined by our board of directors.
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After the five-year prohibition, any business combination between us and an interested
stockholder or an affiliate of an interested stockholder generally must be recommended by our board
of directors and approved by the affirmative vote of at least:
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80% of the votes entitled to be cast by holders of our then-outstanding shares of voting
stock, and |
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two-thirds of the votes entitled to be cast by holders of our voting stock other than
stock held by the interested stockholder with whom or with whose affiliate the business
combination is to be effected or stock held by an affiliate or associate of the interested
stockholder. |
These super-majority vote requirements do not apply if our common stockholders receive a
minimum price, as defined under Maryland law, for their stock in the form of cash or other
consideration in the same form as previously paid by the interested stockholder for its stock.
The statute permits various exemptions from its provisions, including business
combinations that are approved or exempted by the board of directors before the time that the
interested stockholder becomes an interested stockholder. Our board of directors has adopted a
resolution exempting any business combination between us and any person from the business
combination provisions of the MGCL, provided such business combination is first approved by our
board of directors (including a majority of the directors who are not affiliates or associates of
such person). However, this resolution may be altered or repealed in whole or in part at any time.
We can provide no assurance that our board of directors will not amend or rescind this
resolution in the future. If this resolution is repealed, or our board of directors does not
otherwise approve a business combination, the business combination statute may discourage others
from trying to acquire control of us and increase the difficulty of consummating any offer.
Control Share Acquisitions
The MGCL provides that “control shares” of a Maryland corporation acquired in a “control share
acquisition” have no voting rights except to the extent approved at a special meeting of
stockholders by the affirmative vote of two-thirds of the votes entitled to be cast on the matter.
Shares owned by the acquiring person, or by officers or by directors who are our employees, are
excluded from shares entitled to vote on the matter. “Control shares” are voting shares of stock
which, if aggregated with all other such shares of stock previously acquired by the acquiror or in
respect of which the acquiror is able to exercise or direct the exercise of voting power (except
solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in
electing directors within one of the following ranges of voting power:
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one-tenth or more but less than one-third, |
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one-third or more but less than a majority, or |
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a majority or more of all voting power. |
Control shares do not include shares the acquiring person is then entitled to vote as a result of
having previously obtained stockholder approval. A “control share acquisition” means the
acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon satisfaction of
certain conditions (including an undertaking to pay expenses), may compel our board of directors to
call a special meeting of stockholders to be held within 50 days of demand to consider the voting
rights of the shares. If no request for a meeting is made, the corporation may itself present the
question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person does not
deliver an acquiring person statement as required by the statute, then, subject to certain
conditions and limitations, the corporation may redeem any or all of the control shares (except
those for which voting rights have previously been approved) for fair value determined, without
regard to the absence of voting rights for the control shares, as of the date of the last control
share acquisition by the acquiror or of any meeting of stockholders at which the voting rights of
such shares are considered and not approved. If voting rights for control shares are approved at a
stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to
vote, all other stockholders may
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exercise appraisal rights. The fair value of the shares as determined for purposes of such
appraisal rights may not be less than the highest price per share paid by the acquiror in the
control share acquisition.
The control share acquisition statute does not apply (1) to shares acquired in a merger,
consolidation or share exchange if the corporation is a party to the transaction or (2) to
acquisitions approved or exempted by the charter or bylaws of the corporation.
Our bylaws contain a provision exempting from the control share acquisition statute any
and all acquisitions by any person of our common stock. We can provide no assurance that our board
of directors will not amend or eliminate such provision in the future. Should this happen, the
control share acquisition statute may discourage others from trying to acquire control of us and
increase the difficulty of consummating any offer.
Other Anti-Takeover Provisions of Maryland Law
Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity
securities registered under the Exchange Act and with at least three independent directors to elect
to be subject to any or all of five provisions:
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a classified board, |
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a two-thirds vote requirement to remove a director, |
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a requirement that the number of directors be fixed only by the vote of the directors, |
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a requirement that a vacancy on the board be filled only by the remaining directors and
for the remainder of the full term of the directorship in which the vacancy occurred, and |
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a majority requirement for the calling of a special meeting of stockholders. |
A corporation can elect into this statute by provision in its charter or bylaws or
by a resolution of its board of directors. Furthermore, a corporation can elect to be subject to
the above provisions regardless of any contrary provisions in the charter or bylaws.
Through provisions in our charter and bylaws unrelated to Subtitle 8, (1) vacancies on
the board may be filled by the remaining directors, (2) the number of directors may be fixed only
by the vote of the directors and (3) a two-thirds vote is required to remove any director from the
board.
Amendment to Our Charter and Bylaws
Our charter may generally be amended only if declared advisable by our board of directors
and approved by the affirmative vote of the stockholders entitled to cast at least a majority of
all the votes entitled to be cast on the matter under consideration. However, the provision
regarding director removal and the corresponding amendment provision may be amended only if advised
by the board of directors and approved by the affirmative vote of the stockholders entitled to cast
not less than two-thirds of all of the votes entitled to be cast on the matter. Our bylaws provide
that only our board of directors may amend or repeal our bylaws or adopt new laws.
Advance Notice of Director Nominations and New Business
Our bylaws provide that with respect to an annual meeting of stockholders, nominations of
persons for election to our board of directors and the proposal of business to be considered by
stockholders may be made only:
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pursuant to our notice of the meeting, |
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by or at the direction of our board of directors, or |
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by a stockholder who is a stockholder of record both at the time of giving the
stockholder’s notice required by our bylaws and at the time of the meeting, who is entitled
to vote at the meeting and who has complied with the advance notice procedures set forth in
our bylaws. |
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With respect to special meetings of stockholders, only the business specified in our
company’s notice of meeting may be brought before the meeting of stockholders and nominations of
persons for election to our board of directors may be made only:
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by or at the direction of our board of directors, or |
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provided that our board of directors has determined that directors will be elected at
such meeting, by a stockholder who is a stockholder of record both at the time of giving
the stockholder’s notice required by our bylaws and at the time of the meeting, who is
entitled to vote at the meeting and has complied with the advance notice provisions set
forth in our bylaws. |
Generally, under our bylaws, a stockholder seeking to nominate a director or bring other
business before our annual meeting of stockholders must deliver a notice to our secretary not later
than the close of business on the 90th day nor earlier than the 120th day prior to the first
anniversary of the date of mailing of the notice to stockholders for the prior year’s annual
meeting. For a stockholder seeking to nominate a candidate for our board of directors, the notice
must describe various matters regarding the nominee, including name, address, occupation and number
of shares held, and other specified matters. For a stockholder seeking to propose other business,
the notice must include a description of the proposed business, the reasons for the proposal and
other specified matters.
Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws
The provisions of our charter on removal of directors and the advance notice provisions
of the bylaws could delay, defer or prevent a transaction or a change of control of our company
that might involve a premium price for our common stockholders or otherwise be in their best
interest. Likewise, if our company’s board of directors were to rescind the resolution exempting
business combinations from the business combination provisions of the MGCL (or does not otherwise
approve a business combination) or if the provision in the bylaws opting out of the control share
acquisition provisions of the MGCL were rescinded, these provisions of the MGCL could have similar
anti-takeover effects.
Ownership Limit
Our charter provides that no person or entity may actually or beneficially own, or be
deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than
9.8% in value of the aggregate of our outstanding shares of capital stock or more than 9.8% in
value or number of shares, whichever is more restrictive, of the outstanding shares of (i) our
common stock or (ii) our series A preferred stock. We refer to this restriction as the “ownership
limit.” For a more detailed description of this restriction and the constructive ownership rules,
see “Restrictions on Ownership and Transfer.”
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the material United States federal income tax
consequences to U.S. participants of participating in the plan, as well as considerations regarding
our election to be taxed as a REIT and the ownership and disposition of our common stock offered by
this prospectus. This summary is for general information only and is not tax advice This summary
is based on current law, including:
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the Code; |
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current, temporary and proposed Treasury regulations promulgated under the Code; |
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the legislative history of the Code; |
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current administrative interpretations and practices of the Internal Revenue Service, or IRS; and |
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court decisions; |
in each case, as of the date of this prospectus. In addition, the administrative interpretations
and practices of the IRS include its practices and policies as expressed in private letter rulings
which are not binding on the IRS except with respect to the particular taxpayers who requested and
received those rulings. Future legislation, Treasury regulations, administrative interpretations
and practices and/or court decisions may adversely affect the tax considerations described in this
prospectus. Any such change could apply retroactively to transactions preceding the date of the
change. We have not requested and do not intend to request a ruling from the IRS that we qualify
as a REIT or regarding the tax consequences associated with participating in the plan, and the
statements in this prospectus are not binding on the IRS or any court. Thus, we can provide no
assurance that the tax considerations contained in this summary will not be challenged by the IRS
or will be sustained by a court if so challenged. This summary does not discuss any state, local
or foreign tax consequences associated with the participation in the plan, the ownership, sale or
other disposition of our stock or our election to be taxed as a REIT.
You are urged to consult your tax advisors, regarding the specific tax consequences to you of:
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participation in the plan; |
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the acquisition, ownership, and/or sale or other disposition of the common stock offered
under this prospectus, including the federal, state, local, foreign and other tax
consequences; |
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our election to be taxed as a REIT for federal income tax purposes; and |
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potential changes in the applicable tax laws. |
This summary deals only with holders who hold our common stock as a “capital asset”
(generally, property held for investment within the meaning of Section 1221 of the Code). Your tax
treatment will vary depending on your particular situation, and this discussion does not address
all the tax consequences that may be relevant to you in light of your particular circumstances.
State, local and foreign income tax laws may differ substantially from the corresponding federal
income tax laws, and this discussion does not purport to describe any aspect of the tax laws of any
state, local or foreign jurisdiction. In addition, this discussion does not address the tax
consequences relevant to persons who receive special treatment under the United States federal
income tax law, including, without limitation:
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financial institutions, banks and thrifts; |
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insurance companies; |
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tax-exempt organizations; |
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“S” corporations; |
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traders in securities that elect to mark to market; |
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partnerships or other pass-through entities or persons holding our common stock through
a partnership or other pass-through entity; |
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holders subject to the alternative minimum tax; |
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regulated investment companies and REITs; |
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foreign corporations or partnerships, and persons who are not residents or citizens of the United States; |
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broker-dealers or dealers in securities or currencies; |
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United States expatriates; |
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persons that are “non-U.S. stockholders,” as defined below, except as specifically provided below; |
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persons holding our common stock as a hedge against currency risks or as a position in a straddle; or |
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United States persons whose functional currency is not the United States dollar. |
Participation in the Plan by U.S. Participants
The following summary describes certain United States federal income tax consequences of
participating in the plan to U.S. participants. When we use the term “U.S. participant,” we mean a
participant in the plan who, for United States federal income tax purposes is:
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a citizen or resident of the United States; |
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a corporation or other entity created or organized in or under the laws of the United
States or of any State thereof or in the District of Columbia; |
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an estate the income of which is subject to United States federal income taxation
regardless of its source; or |
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a trust whose administration is subject to the primary supervision of a United States
court and which has one or more United States persons who have the authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to the extent
provided in the Treasury regulations, certain trusts in existence on August 20, 1996, and
treated as United States persons prior to this date that elect to continue to be treated as
United States persons, shall also be considered U.S. participants. |
Distributions you receive on shares of our common stock you hold in the plan and that are
reinvested in newly issued shares will be treated for federal income tax purposes as a taxable
stock distribution to you. Accordingly, you will receive taxable dividend income in an amount
equal to the fair market value of the shares of our common stock that you receive on the date we
make distributions (to the extent we have current or accumulated earnings and profits for federal
income tax purposes). We intend to take the position that the fair market value of the newly
issued shares purchased with reinvested distributions equals the average of the high and low NYSE
prices of our common stock on the date we make such distributions. The treatment described above
will apply to you whether or not the shares are issued to you at a discount. On the other hand, we
intend to take the position that distributions you receive on shares of our common stock you hold
in the plan that are reinvested in shares of our common stock purchased by the agent in the open
market or in privately negotiated transactions are treated for federal income tax purposes as a
taxable dividend to you in an amount equal to the purchase price of such shares (to the extent that
we have current or accumulated earnings and profits for federal income tax purposes).
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Your statement of account will show the fair market value of the common stock purchased with
reinvested distributions on the applicable date we make distributions. You also will receive a
Form 1099-DIV after the end of the year which will show for the year your total dividend income,
your amount of any return of capital distribution and your amount of any capital gain dividend.
The IRS has indicated in certain private letter rulings that a participant in both the
dividend reinvestment and optional cash purchase portions of a plan similar to our plan who makes
an optional cash purchase under the plan will be treated as having received a distribution equal to
the excess, if any, of the fair market value on the investment date of the common shares over the
amount of the optional cash payment made by the participant. Certain other private letter rulings
have held that a participant in only the optional cash purchase portion of a plan who makes an
optional cash purchase of shares under the plan at a discount will not be treated as having
received a distribution. We presently intend to take the position that a holder who makes an
optional cash purchase of common shares under the plan will be treated as having received a
distribution equal to the excess, if any, of the fair market value on the investment date of the
common shares, including any discount, over the amount of the optional cash payment made by the
participant. We also intend to take the position that the fair market value for such determination
will be equal to the average of the high and low NYSE prices of our common stock on the applicable
investment date. Any such distribution would result in taxable dividend income, reduced basis in
the shares of common stock, capital gain or some combination thereof, under the rules described
above.
Under the plan, we will bear any trading fees or brokerage commissions related to the
acquisition of, but not the sale of, shares of our common stock. The IRS has held in certain
private letter rulings that brokerage commissions paid by a corporation with respect to open market
purchases on behalf of participants in a dividend reinvestment plan or pursuant to the optional
cash purchase features of a plan were to be treated as constructive distributions to participants
who were shareholders of the corporation. In these rulings the IRS determined that the payment of
these fees or commissions was subject to income tax in the same manner as distributions and
includable in the participant’s cost basis of the shares purchased. Accordingly, to the extent
that we pay brokerage commissions with respect to any open market or privately negotiated purchases
made with reinvested dividends or optional cash purchases by the agent, we presently intend to take
the position that shareholder participants received their proportionate amount of the commissions
as distributions in addition to the amounts described above. We intend to take the position that
administrative expenses of the plan paid by us are not constructive distributions to you.
Your tax basis in your common shares acquired under the dividend reinvestment features of the
plan generally will equal the total amount of distributions you are treated as receiving, as
described above. Your tax basis in your common shares acquired through an optional cash purchase
under the plan generally will equal the total amount of any distributions you are treated as
receiving, as described above, plus the amount of the optional cash payment. Your holding period
for the shares of our common stock acquired under the plan will begin on the day following the date
such shares were purchased for your account. Consequently, shares of our common stock purchased in
different quarters will have different holding periods.
You will not realize any gain or loss when you receive certificates for whole shares of our
common stock credited to your account, either upon your request, when you withdraw from the plan or
if the plan terminates. However, you will recognize gain or loss when whole shares of our common
stock or rights applicable to our common stock acquired under the plan are sold or exchanged. You
will also recognize gain or loss when you receive a cash payment for a fractional share of our
common stock credited to your account when you withdraw from the plan or if the plan terminates.
The amount of your gain or loss will equal the difference between the amount you receive for your
shares or fractional shares of our common stock or rights applicable to common stock, net of any
costs of sale paid by you, and your tax basis of such shares.
Taxation of Our Company
General. We elected to be taxed as a REIT under Sections 856 through 860 of the Code,
commencing with our taxable year ended December 31, 2004. We believe that we have been organized
and have operated in a manner that has allowed us to qualify for taxation as a REIT under the Code
commencing with our taxable year ended December 31, 2004, and we intend to continue to be organized
and operate in this manner. However, qualification and taxation as a REIT depend upon our ability
to meet the various qualification tests imposed under the Code, including through our actual annual
operating results, asset composition, distribution levels and diversity of stock ownership.
Accordingly, no assurance can be given that we have been organized and have operated, or will
continue to be organized and operated, in a manner so as to qualify or remain qualified as a REIT.
See “— Failure to Qualify.”
The sections of the Code and the corresponding Treasury regulations that relate to
qualification and operation as a REIT are highly technical and complex. The following sets forth
the material aspects of the sections of the Code that govern the federal income tax treatment of a
REIT and its stockholders. This summary is qualified in its entirety by the applicable Code
provisions, relevant rules
and regulations promulgated under the Code, and administrative and judicial interpretations of
the Code and these rules and regulations.
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Latham & Watkins LLP has acted as our tax counsel in connection with the registration of our
common stock pursuant to this prospectus and our election to be taxed as a REIT. In connection
with the registration statement of which this prospectus is a part, Latham & Watkins LLP has
rendered an opinion to us to the effect that, commencing with our taxable year ending December 31,
2004, we have been organized and have operated in conformity with the requirements for
qualification as a REIT under the Code, and our proposed method of operation will enable us to
continue to meet the requirements for qualification and taxation as a REIT under the Code. It must
be emphasized that this opinion was based on various assumptions and representations as to factual
matters, including representations made by us in a factual certificate provided by one of our
officers. In addition, this opinion was based upon our factual representations set forth in this
prospectus. Moreover, our qualification and taxation as a REIT depend upon our ability to meet the
various qualification tests imposed under the Code which are discussed below, including through
actual annual operating results, asset composition, distribution levels and diversity of stock
ownership, the results of which have not been and will not be reviewed by Latham & Watkins LLP.
Accordingly, no assurance can be given that our actual results of operation for any particular
taxable year will satisfy those requirements. Latham & Watkins LLP has no obligation to update its
opinion subsequent to its date. Further, the anticipated income tax treatment described in this
prospectus may be changed, perhaps retroactively, by legislative, administrative or judicial action
at any time. See “— Failure to Qualify.”
Provided we qualify for taxation as a REIT, we generally will not be required to pay federal
corporate income taxes on our net income that is currently distributed to our stockholders. This
treatment substantially eliminates the “double taxation” that ordinarily results from investment in
a C corporation. A C corporation generally is required to pay tax at the corporate level. Double
taxation means taxation once at the corporate level when income is earned and once again at the
stockholder level when that income is distributed. We will, however, be required to pay federal
income tax as follows:
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First, we will be required to pay tax at regular corporate rates on any undistributed
REIT taxable income, including undistributed net capital gains. |
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Second, we may be required to pay the “alternative minimum tax” on our items of tax
preference under some circumstances. |
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Third, if we have (1) net income from the sale or other disposition of “foreclosure
property” held primarily for sale to customers in the ordinary course of business or (2)
other nonqualifying income from foreclosure property, we will be required to pay tax at the
highest corporate rate on this income. Foreclosure property generally is defined as
property we acquired through foreclosure or after a default on a loan secured by the
property or a lease of the property. |
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Fourth, we will be required to pay a 100% tax on any net income from prohibited
transactions. Prohibited transactions are, in general, sales or other taxable dispositions
of property, other than foreclosure property, held primarily for sale to customers in the
ordinary course of business. |
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Fifth, if we fail to satisfy the 75% gross income test or the 95% gross income test, as
described below, but have otherwise maintained our qualification as a REIT because certain
other requirements are met, we will be required to a pay a tax equal to (1) the greater of
(a) the amount by which 75% of our gross income exceeds the amount qualifying under the 75%
gross income test, and (b) the amount by which 95% of our gross income (90% for our taxable
year ended December 31, 2004) exceeds the amount qualifying under the 95% gross income
test, multiplied by (2) a fraction intended to reflect our profitability. |
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Sixth, if we fail to satisfy any of the REIT asset tests (other than a de minimis
failure of the 5% or 10% asset tests), as described below, due to reasonable cause and not
due to willful neglect, and we nonetheless maintain our REIT qualification because of
specified cure provisions, we will be required to pay a tax equal to the greater of $50,000
or the highest corporate tax rate multiplied by the net income generated by the
nonqualifying assets that caused us to fail such test. |
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Seventh, if we fail to satisfy any provision of the Code that would result in our
failure to qualify as a REIT (other than a violation of the REIT gross income tests or
certain violations of the asset tests described below) and the violation is due to
reasonable cause and not due to willful neglect, we may retain our REIT qualification but
we will be required to pay a penalty of $50,000 for each such failure. |
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Eighth, we will be required to pay a 4% excise tax to the extent we fail to distribute
during each calendar year at least the sum of (1) 85% of our REIT ordinary income for the
year, (2) 95% of our REIT capital gain net income for the year, and (3) any undistributed
taxable income from prior periods. |
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Ninth, if we acquire any asset from a corporation which is or has been a C corporation
in a transaction in which the basis of the asset in our hands is determined by reference to
the basis of the asset in the hands of the C corporation, and we subsequently recognize
gain on the disposition of the asset during the ten-year period beginning on the date on
which we acquired the asset, then we will be required to pay tax at the highest regular
corporate tax rate on this gain to the extent of the excess of (1) the fair market value of
the asset over (2) our adjusted basis in the asset, in each case determined as of the date
on which we acquired the asset. The results described in this paragraph with respect to the
recognition of gain assume that the C corporation will refrain from making an election to
receive different treatment under existing Treasury regulations on its tax return for the
year in which we acquire an asset from the C corporation. |
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Tenth, we will be required to pay a 100% tax on any “redetermined rents,” “redetermined
deductions” or “excess interest.” In general, redetermined rents are rents from real
property that are overstated as a result of services furnished to our tenants by a “taxable
REIT subsidiary” of ours. Redetermined deductions and excess interest represent amounts
that are deducted by our taxable REIT subsidiary for amounts paid to us that are in excess
of the amounts that would have been deducted based on arm’s-length negotiations. See “—
Penalty Tax.” |
Requirements for Qualification as a Real Estate Investment Trust. The Code defines a “REIT”
as a corporation, trust or association:
(1) that is managed by one or more trustees or directors;
(2) that issues transferable shares or transferable certificates to evidence its beneficial
ownership;
(3) that would be taxable as a domestic corporation, but for Sections 856 through 860 of the
Code;
(4) that is not a financial institution or an insurance company within the meaning of certain
provisions of the Code;
(5) that is beneficially owned by 100 or more persons;
(6) not more than 50% in value of the outstanding stock of which is owned, actually or
constructively, by five or fewer individuals, including specified entities, during the last
half of each taxable year; and
(7) that meets other tests, described below, regarding the nature of its income and assets
and the amount of its distributions.
The Code provides that conditions (1) to (4), inclusive, must be met during the entire taxable
year and that condition (5) must be met during at least 335 days of a taxable year of twelve
months, or during a proportionate part of a taxable year of less than twelve months. Conditions (5)
and (6) do not apply until after the first taxable year for which an election is made to be taxed
as a REIT. For purposes of condition (6), pension funds and other specified tax-exempt entities
generally are treated as individuals except that a “look-through” exception applies with respect to
pension funds.
We believe that we have been organized, have operated and have issued sufficient shares of
capital stock with sufficient diversity of ownership to allow us to satisfy conditions (1) through
(7) inclusive during the relevant time periods. In addition, our charter provides for restrictions
regarding the ownership and transfer of our shares that are intended to assist us in continuing to
satisfy the share ownership requirements described in (5) and (6) above. These stock ownership and
transfer restrictions are described in “Restrictions on Ownership and Transfer” in this prospectus.
These restrictions, however, may not ensure that we will, in all cases, be able to satisfy the
share ownership requirements described in (5) and (6) above. If we fail to satisfy these share
ownership requirements, except as provided in the next sentence, our status as a REIT will
terminate. If, however, we comply with the rules contained in applicable Treasury regulations that
require us to ascertain the actual ownership of our shares and we do not know, or would not have
known through the exercise of reasonable diligence, that we failed to meet the requirement
described in condition (6) above, we will be treated as having met this requirement. See the
section below entitled “— Failure to Qualify.”
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In addition, we may not maintain our status as a REIT unless our taxable year is the calendar
year. We have and will continue to have a calendar taxable year.
Ownership of Interests in Partnerships, Limited Liability Companies and Qualified REIT
Subsidiaries. In the case of a REIT which is a partner in a partnership or a member in a limited
liability company treated as a partnership for federal income tax purposes, Treasury regulations
provide that the REIT will be deemed to own its proportionate share of the assets of the
partnership or limited liability company, as the case may be, based on its interest in partnership
capital, subject to special rules relating to the 10% asset test described below. Also, the REIT
will be deemed to be entitled to its proportionate share of the income of the entity. The assets
and gross income of the partnership or limited liability company retain the same character in the
hands of the REIT for purposes of Section 856 of the Code, including satisfying the gross income
tests and the asset tests. Thus, our pro rata share of the assets and items of income of our
operating partnership, including our operating partnership’s share of these items of any
partnership or limited liability company in which it owns an interest, are treated as our assets
and items of income for purposes of applying the requirements described in this prospectus,
including the REIT income and asset tests described below. A brief summary of the rules governing
the federal income taxation of partnerships and limited liability companies is set forth below in
“— Tax Aspects of Our Operating Partnership, the Subsidiary Partnerships and the Limited Liability
Companies.”
We have control of our operating partnership and the subsidiary partnerships and limited
liability companies and intend to continue to operate them in a manner consistent with the
requirements for our qualification as a REIT. In the future, we may be a limited partner or
non-managing member in a partnership or limited liability company. If such a partnership or limited
liability company were to take actions which could jeopardize our status as a REIT or require us to
pay tax, we could be forced to dispose of our interest in such entity. In addition, it is possible
that a partnership or limited liability company could take an action which could cause us to fail a
REIT income or asset test, and that we would not become aware of such action in time to dispose of
our interest in the partnership or limited liability company or take other corrective action on a
timely basis. In that case, we could fail to qualify as a REIT unless we were entitled to relief,
as described below. See “— Failure to Qualify.”
We may from time to time own and operate certain properties through wholly-owned subsidiaries
that we intend to be treated as “qualified REIT subsidiaries” under the Code. A corporation will
qualify as our qualified REIT subsidiary if we own 100% of its outstanding stock and we do not
elect with the subsidiary to treat it as a “taxable REIT subsidiary,” as described below. For
federal income tax purposes, a qualified REIT subsidiary is not treated as a separate corporation,
and all assets, liabilities and items of income, deduction and credit of a qualified REIT
subsidiary are treated as assets, liabilities and items of income, deduction and credit (as the
case may be) of the parent REIT for all purposes under the Code, including the REIT qualification
tests. Thus, in applying the federal income tax requirements described in this prospectus, any
corporation in which we own a 100% interest (other than a taxable REIT subsidiary) is ignored, and
all assets, liabilities, and items of income, deduction and credit of such corporation are treated
as our assets, liabilities and items of income, deduction, and credit. A qualified REIT subsidiary
is not required to pay federal income tax, and our ownership of the stock of a qualified REIT
subsidiary will not violate the restrictions on ownership of securities described below under “—
Asset Tests.”
Ownership of Interests in Taxable REIT Subsidiaries. A taxable REIT subsidiary is a
corporation other than a REIT in which a REIT directly or indirectly holds stock, and that has made
a joint election with the REIT to be treated as a taxable REIT subsidiary. A taxable REIT
subsidiary also includes any corporation, other than a REIT, with respect to which a taxable REIT
subsidiary owns securities possessing more than 35% of the total voting power or value. Other than
some activities relating to lodging and health care facilities, a taxable REIT subsidiary may
generally engage in any business, including the provision of customary or non-customary services to
tenants of its parent REIT. A taxable REIT subsidiary is subject to federal income tax as a regular
C corporation. In addition, a taxable REIT subsidiary may be prevented from deducting interest on
debt funded directly or indirectly by its parent REIT if certain tests regarding the taxable REIT
subsidiary’s debt to equity ratio and interest expense are not satisfied. A REIT’s ownership of
securities of taxable REIT subsidiaries will not be subject to the 10% or 5% asset tests described
below. See “Asset Tests.”
We currently hold an interest in one taxable REIT subsidiary and may acquire securities in
additional taxable REIT subsidiaries in the future.
Income Tests. We must satisfy two gross income requirements annually to maintain our
qualification as a REIT. First, in each taxable year, we must derive directly or indirectly at
least 75% of our gross income, excluding gross income from prohibited transactions, from
investments relating to real property or mortgages on real property, including “rents from real
property” and, in certain circumstances, interest, or from certain types of temporary investments.
Second, in each taxable year, we must derive at least 95% of our gross income, excluding gross
income from prohibited transactions and certain hedges of indebtedness, from the real property
investments described above, or from dividends, interest and gain from the sale or disposition of
stock or securities, or from
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any combination of the foregoing. For these purposes, the term “interest” generally does not
include any amount received or accrued, directly or indirectly, if the determination of all or some
of the amount depends in any way on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term “interest” solely by reason of
being based on a fixed percentage or percentages of receipts or sales.
Rents we receive from a tenant will qualify as “rents from real property” for the purpose of
satisfying the gross income requirements for a REIT described above only if all of the following
conditions are met:
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The amount of rent must not be based in any way on the income or profits of any person.
However, an amount we receive or accrue generally will not be excluded from the term “rents
from real property” solely because it is based on a fixed percentage or percentages of
receipts or sales; |
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We, or an actual or constructive owner of 10% or more of our capital stock, must not
actually or constructively own 10% or more of the interests in the tenant, or, if the
tenant is a corporation, 10% or more of the voting power or value of all classes of stock
of the tenant. Rents we receive from such a tenant that is also our taxable REIT
subsidiary, however, will not be excluded from the definition of “rents from real property”
as a result of this condition if at least 90% of the space at the property to which the
rents relate is leased to third parties, and the rents paid by the taxable REIT subsidiary
are substantially comparable to rents paid by our other tenants for comparable space.
Whether rents paid by a taxable REIT subsidiary are substantially comparable to rents paid
by other tenants is determined at the time the lease with the taxable REIT subsidiary is
entered into, extended, and modified, if such modification increases the rents due under
such lease. Notwithstanding the foregoing, however, if a lease with a “controlled taxable
REIT subsidiary” is modified and such modification results in an increase in the rents
payable by such taxable REIT subsidiary, any such increase will not qualify as “rents from
real property.” For purposes of this rule, a “controlled taxable REIT subsidiary” is a
taxable REIT subsidiary in which we own stock possessing more than 50% of the voting power
or more than 50% of the total value; |
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Rent attributable to personal property, leased in connection with a lease of real
property, is not greater than 15% of the total rent received under the lease. If this
requirement is not met, then the portion of the rent attributable to personal property will
not qualify as “rents from real property”; and |
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We generally must not operate or manage the property or furnish or render services to
our tenants, subject to a 1% de minimis exception and except as provided below. We may,
however, perform services that are “usually or customarily rendered” in connection with the
rental of space for occupancy only and are not otherwise considered “rendered to the
occupant” of the property. Examples of these services include the provision of light, heat,
or other utilities, trash removal and general maintenance of common areas. In addition, we
may employ an independent contractor from whom we derive no revenue to provide customary
services, or a taxable REIT subsidiary, which may be wholly or partially owned by us, to
provide both customary and non-customary services to our tenants without causing the rent
we receive from those tenants to fail to qualify as “rents from real property.” Any amounts
we receive from a taxable REIT subsidiary with respect to the taxable REIT subsidiary’s
provision of noncustomary services will, however, be nonqualifying income under the 75%
gross income test and, except to the extent received through the payment of dividends, the
95% gross income test. |
We generally do not intend, and as a general partner of our operating partnership, do not
intend to permit our operating partnership, to take actions we believe will cause us to fail to
satisfy the rental conditions described above. However, we may intentionally fail to satisfy some
of these conditions to the extent we conclude, based on the advice of our tax counsel, the failure
will not jeopardize our tax status as a REIT. In addition, with respect to the limitation on the
rental of personal property, we have not obtained appraisals of the real property and personal
property leased to tenants. Accordingly, there can be no assurance that the IRS will agree with our
determinations of value.
Income we receive that is attributable to the rental of parking spaces at the properties will
constitute rents from real property for purposes of the REIT gross income tests if certain services
provided with respect to the parking facilities are performed by independent contractors from whom
we derive no income, either directly or indirectly, or by a taxable REIT subsidiary, and certain
other conditions are met. We believe that the income we receive that is attributable to parking
facilities meets these tests and, accordingly, will constitute rents from real property for
purposes of the REIT gross income tests.
From time to time, we enter into hedging transactions with respect to one or more of our
assets or liabilities. Our hedging activities may include entering into interest rate swaps, caps,
and floors, options to purchase these items, and futures and forward
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contracts. Any income we derive from a hedging transaction will be nonqualifying for purposes
of the 75% gross income test. Except to the extent provided by Treasury regulations, however,
income from a hedging transaction entered into prior to January 1, 2005, including gain from the
sale or disposition of such a transaction, will be qualifying income for purposes of the 95% gross
income test, but only to the extent that the transaction hedges indebtedness incurred or to be
incurred by us to acquire or carry real estate assets. Income from such a hedging transaction
entered into on or after January 1, 2005 that is clearly identified as such as specified in the
Code will not constitute gross income for purposes of the 95% gross income test, and therefore will
be exempt from this test. The term “hedging transaction,” as used above, generally means any
transaction we enter into in the normal course of our business primarily to manage risk of interest
rate changes or fluctuations with respect to borrowings made or to be made by us. To the extent
that we do not properly identify such transactions as hedges or hedge with other types of
financial instruments, the income from those transactions is not likely to be treated as qualifying
income for purposes of the gross income tests. We intend to structure our hedging transactions in a
manner that does not jeopardize our status as a REIT.
To the extent our taxable REIT subsidiary pays dividends, we generally will derive our
allocable share of such dividend income through our interest in our operating partnership. Such
dividend income will qualify under the 95%, but not the 75%, REIT gross income test. We will
monitor the amount of the dividend and other income from our taxable REIT subsidiary and we will
take actions intended to keep this income, and any other nonqualifying income, within the
limitations of the REIT income tests. While we expect these actions will prevent a violation of the
REIT income tests, we cannot guarantee that such actions will in all cases prevent such a
violation.
If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year,
we may nevertheless qualify as a REIT for the year if we are entitled to relief under certain
provisions of the Code. Commencing with our taxable year beginning January 1, 2005, we generally
may make use of the relief provisions if:
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following our identification of the failure to meet the 75% or 95% gross income tests
for any taxable year, we file a schedule with the IRS setting forth each item of our gross
income for purposes of the 75% or 95% gross income tests for such taxable year in
accordance with Treasury regulations to be issued; and |
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our failure to meet these tests was due to reasonable cause and not due to willful
neglect. |
It is not possible, however, to state whether in all circumstances we would be entitled to the
benefit of these relief provisions. For example, if we fail to satisfy the gross income tests
because nonqualifying income that we intentionally accrue or receive exceeds the limits on
nonqualifying income, the IRS could conclude that our failure to satisfy the tests was not due to
reasonable cause. If these relief provisions do not apply to a particular set of circumstances, we
will not qualify as a REIT. As discussed above in “— Taxation of Our Company — General,” even if
these relief provisions apply, and we retain our status as a REIT, a tax would be imposed with
respect to our nonqualifying income. We may not always be able to comply with the gross income
tests for REIT qualification despite our periodic monitoring of our income.
Prohibited Transaction Income. Any gain that we realize on the sale of property held as
inventory or otherwise held primarily for sale to customers in the ordinary course of business,
including our share of any such gain realized by our operating partnership, either directly or
through its subsidiary partnerships and limited liability companies, will be treated as income from
a prohibited transaction that is subject to a 100% penalty tax. This prohibited transaction income
may also adversely affect our ability to satisfy the income tests for qualification as a REIT.
Under existing law, whether property is held as inventory or primarily for sale to customers in the
ordinary course of a trade or business is a question of fact that depends on all the facts and
circumstances surrounding the particular transaction. Our operating partnership intends to hold its
properties for investment with a view to long-term appreciation, to engage in the business of
acquiring, developing and owning its properties and to make occasional sales of the properties as
are consistent with our operating partnership’s investment objectives. We do not intend to enter
into any sales that are prohibited transactions. However, the IRS may successfully contend that
some or all of the sales made by our operating partnership or its subsidiary partnerships or
limited liability companies are prohibited transactions. We would be required to pay the 100%
penalty tax on our allocable share of the gains resulting from any such sales.
Penalty Tax. Any redetermined rents, redetermined deductions or excess interest we generate
will be subject to a 100% penalty tax. In general, redetermined rents are rents from real property
that are overstated as a result of services furnished by our taxable REIT subsidiary to any of our
tenants, and redetermined deductions and excess interest represent amounts that are deducted by a
taxable REIT subsidiary for amounts paid to us that are in excess of the amounts that would have
been deducted based on arm’s-length
negotiations. Rents we receive will not constitute redetermined rents if they qualify for the
safe harbor provisions contained in the Code.
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From time to time, our taxable REIT subsidiary may provide services to our tenants. We intend
to set the fees paid to our taxable REIT subsidiary for such services at arm’s length rates,
although the fees paid may not satisfy the safe harbor provisions described above. These
determinations are inherently factual, and the IRS has broad discretion to assert that amounts paid
between related parties should be reallocated to clearly reflect their respective incomes. If the
IRS successfully made such an assertion, we would be required to pay a 100% penalty tax on the
excess of an arm’s length fee for tenant services over the amount actually paid.
Asset Tests. At the close of each calendar quarter of our taxable year, we must also satisfy
four tests relating to the nature and diversification of our assets. First, at least 75% of the
value of our total assets must be represented by real estate assets, cash, cash items and
government securities. For purposes of this test, the term “real estate assets” generally means
real property (including interests in real property and interests in mortgages on real property)
and shares (or transferable certificates of beneficial interest) in other REITs, as well as any
stock or debt instrument attributable to the investment of the proceeds of a stock offering or a
public offering of debt with a term of at least five years, but only for the one-year period
beginning on the date we receive such proceeds.
Second, not more than 25% of the value of our total assets may be represented by securities,
other than those securities includable in the 75% asset test.
Third, of the investments included in the 25% asset class, and except for investments in other
REITs, our qualified REIT subsidiaries and our taxable REIT subsidiaries, the value of any one
issuer’s securities may not exceed 5% of the value of our total assets, and we may not own more
than 10% of the total vote or value of the outstanding securities of any one issuer. Solely for
purposes of the 10% value test, however, certain securities including, but not limited to “straight
debt” securities having specified characteristics, loans to an individual or an estate, obligations
to pay rents from real property and any securities issued by a REIT, are disregarded as securities.
In addition, commencing with our taxable year beginning January 1, 2005, solely for purposes of
the 10% value test, the determination of our interest in the assets of a partnership or limited
liability company in which we own an interest will be based on our proportionate interest in any
securities issued by the partnership or limited liability company, excluding for this purpose
certain securities described in the Code.
Fourth, not more than 20% of the value of our total assets may be represented by the
securities of one or more taxable REIT subsidiaries.
To the extent that we own an interest in an issuer that does not qualify as a REIT, a
qualified REIT subsidiary, or a taxable REIT subsidiary, we believe that the value of the
securities of any such issuer has not exceeded 5% of the total value of our assets. Moreover, with
respect to each issuer in which we own an interest that does not qualify as a qualified REIT
subsidiary or a taxable REIT subsidiary, we believe that our ownership of the securities of any
such issuer has complied with the 10% voting securities limitation and the 10% value limitation. We
believe that the value of our taxable REIT subsidiary does not exceed, and believe that in the
future it will not exceed, 20% of the aggregate value of our gross assets. No independent
appraisals have been obtained to support these conclusions. In addition, there can be no assurance
that the IRS will agree with our determinations of value.
The asset tests described above must be satisfied at the close of each quarter of our taxable
year in which we (directly or through our operating partnership) acquire securities in the
applicable issuer, increase our ownership of securities of such issuer (including as a result of
increasing our interest in our operating partnership or other partnerships and limited liability
companies which own such securities), or acquire other assets. For example, our indirect ownership
of securities of each issuer will increase as a result of our capital contributions to our
operating partnership or as limited partners exercise their redemption/exchange rights. After
initially meeting the asset tests at the close of any quarter, we will not lose our status as a
REIT for failure to satisfy the asset tests at the end of a later quarter solely by reason of
changes in asset values. If we fail to satisfy an asset test because we acquire securities or other
property during a quarter, including as a result of an increase in our interest in our operating
partnership, we may cure this failure by disposing of sufficient nonqualifying assets within 30
days after the close of that quarter. We believe that we have maintained and intend to maintain
adequate records of the value of our assets to ensure compliance with the asset tests. If we fail
to cure any noncompliance with the asset tests within the 30 day cure period, we would cease to
qualify as a REIT unless we are eligible for certain relief provisions discussed below.
Certain relief provisions may be available to us if we discover a failure to satisfy the asset
tests described above after the 30 day cure period. Under these provisions, we will be deemed to
have met the 5% and 10% asset tests if the value of our nonqualifying assets (1) does not exceed
the lesser of (a) 1% of the total value of our assets at the end of the applicable quarter or (b)
$10,000,000,
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and (2) we dispose of the nonqualifying assets or otherwise satisfy such tests within
(a) six months after the last day of the quarter in which the failure to satisfy the asset tests is
discovered or (b) the period of time prescribed by Treasury regulations to be issued. For
violations of any of the asset tests due to reasonable cause and not due to willful neglect and
that are, in the case of the 5% and 10% asset tests, in excess of the de minimis exception
described above, we may avoid disqualification as a REIT after the 30 day cure period by taking
steps including (1) the disposition of sufficient nonqualifying assets, or the taking of other
actions, which allow us to meet the asset tests within (a) six months after the last day of the
quarter in which the failure to satisfy the asset tests is discovered or (b) the period of time
prescribed by Treasury regulations to be issued, (2) paying a tax equal to the greater of (a)
$50,000 or (b) the highest corporate tax rate multiplied by the net income generated by the
nonqualifying assets, and (3) disclosing certain information to the IRS.
Although we believe that we have satisfied the asset tests described above and plan to take
steps to ensure that we satisfy such tests for any calendar quarter with respect to which retesting
is to occur, there can be no assurance that we will always be successful, or a reduction in our
operating partnership’s overall interest in an issuer will not be required. If we fail to timely
cure any noncompliance with the asset tests in a timely manner, and the relief provisions described
above are not available, we would cease to qualify as a REIT. See “— Failure to Qualify” below.
Annual Distribution Requirements. To maintain our qualification as a REIT, we are required to
distribute dividends, other than capital gain dividends, to our stockholders in an amount at least
equal to the sum of:
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90% of our “REIT taxable income;” and |
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90% of our after-tax net income, if any, from foreclosure property; minus |
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the excess of the sum of certain items of non-cash income over 5% of our “REIT taxable income.” |
For these purposes, our “REIT taxable income” is computed without regard to the dividends paid
deduction and our net capital gain. In addition, for purposes of this test, non-cash income means
income attributable to leveled stepped rents, original issue discount on purchase money debt,
cancellation of indebtedness or a like-kind exchange that is later determined to be taxable.
In addition, if we dispose of any asset we acquired from a corporation which is or has been a
C corporation in a transaction in which our basis in the asset is determined by reference to the
basis of the asset in the hands of that C corporation, within the ten-year period following our
acquisition of such asset, we would be required to distribute at least 90% of the after-tax gain,
if any, we recognize on the disposition of the asset, to the extent that gain does not exceed the
excess of (a) the fair market value of the asset, over (b) our adjusted basis in the asset, in each
case, on the date we acquired the asset.
We generally must pay, or be treated as paying, the distributions described above in the
taxable year to which they relate. At our election, a distribution will be treated as paid in a
taxable year if it is declared before we timely file our tax return for such year and paid on or
before the first regular dividend payment after such declaration, provided such payment is made
during the twelve-month period following the close of such year. These distributions are taxable to
our stockholders, other than tax-exempt entities, in the year in which paid. This is so even though
these distributions relate to the prior year for purposes of the 90% distribution requirement. The
amount distributed must not be preferential — i.e., every stockholder of the class of stock to
which a distribution is made must be treated the same as every other stockholder of that class, and
no class of stock may be treated other than according to its dividend rights as a class. To the
extent that we do not distribute all of our net capital gain, or distribute at least 90%, but less
than 100%, of our “REIT taxable income,” as adjusted, we will be required to pay tax on the
undistributed amount at regular corporate tax rates. We believe we have made, and intend to
continue to make timely distributions sufficient to satisfy these annual distribution requirements
and to minimize our corporate tax obligations. In this regard, the partnership agreement of our
operating partnership authorizes us, as general partner, to take such steps as may be necessary to
cause our operating partnership to distribute to its partners an amount sufficient to permit us to
meet these distribution requirements.
We expect that our REIT taxable income will be less than our cash flow because of depreciation
and other non-cash charges included in computing REIT taxable income. Accordingly, we anticipate
that we will generally have sufficient cash or liquid assets to enable us to satisfy the
distribution requirements described above. However, from time to time, we may not have sufficient
cash or other liquid assets to meet these distribution requirements due to timing differences
between the actual receipt of income and actual payment of deductible expenses, and the inclusion
of income and deduction of expenses in determining our taxable income. If these
timing differences occur, we may be required to borrow funds or pay dividends in the form of
taxable stock dividends in order to meet the distribution requirements.
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Under some circumstances, we may be able to rectify an inadvertent failure to meet the 90%
distribution requirements for a year by paying “deficiency dividends” to our stockholders in a
later year, which may be included in our deduction for dividends paid for the earlier year. Thus,
we may be able to avoid being taxed on amounts distributed as deficiency dividends. However, we
will be required to pay interest to the IRS based upon the amount of any deduction claimed for
deficiency dividends.
Furthermore, we will be required to pay a 4% excise tax to the extent we fail to distribute
during each calendar year, or in the case of distributions with declaration and record dates
falling in the last three months of the calendar year, by the end of January immediately following
such year, at least the sum of 85% of our REIT ordinary income for such year, 95% of our REIT
capital gain income for the year and any undistributed taxable income from prior periods. Any REIT
taxable income and net capital gain on which this excise tax is imposed for any year is treated as
an amount distributed during that year for purposes of calculating such tax.
For purposes of the distribution requirements and excise tax described above, distributions
declared during the last three months of the taxable year, payable to stockholders of record on a
specified date during such period and paid during January of the following year, will be treated as
paid by us and received by our stockholders on December 31 of the year in which they are declared.
Like-Kind Exchanges. We may dispose of properties in transactions intended to qualify as
like-kind exchanges under the Code. Such like-kind exchanges are intended to result in the deferral
of gain for federal income tax purposes. The failure of any such transaction to qualify as a
like-kind exchange could subject us to federal income tax, possibly including the 100% prohibited
transaction tax, depending on the facts and circumstances surrounding the particular transaction.
Failure to Qualify
Commencing with our taxable year beginning January 1, 2005, specified cure provisions are
available to us in the event that we discover a violation of a provision of the Code that would
result in our failure to qualify as a REIT. Except with respect to violations of the REIT income
tests and asset tests (for which the cure provisions are described above), and provided the
violation is due to reasonable cause and not due to willful neglect, these cure provisions
generally impose a $50,000 penalty for each violation in lieu of a loss of REIT status.
If we fail to qualify for taxation as a REIT in any taxable year, and the relief provisions do
not apply, we will be required to pay tax, including any applicable alternative minimum tax, on our
taxable income at regular corporate rates. Distributions to stockholders in any year in which we
fail to qualify as a REIT will not be deductible by us, and we will not be required to distribute
any amounts to our stockholders. As a result, we anticipate that our failure to qualify as a REIT
would reduce the cash available for distribution by us to our stockholders. In addition, if we fail
to qualify as a REIT, all distributions to stockholders will be taxable as regular corporate
dividends to the extent of our current and accumulated earnings and profits. In this event,
corporate distributees may be eligible for the dividends-received deduction. Unless entitled to
relief under specific statutory provisions, we will also be disqualified from taxation as a REIT
for the four taxable years following the year during which we lost our qualification. It is not
possible to state whether in all circumstances we would be entitled to this statutory relief.
Tax Aspects of Our Operating Partnership, the Subsidiary Partnerships and the Limited Liability
Companies
General. All of our investments are held indirectly through our operating partnership. In
addition, our operating partnership holds certain of its investments indirectly through subsidiary
partnerships and limited liability companies which we expect will be treated as partnerships (or
disregarded entities) for federal income tax purposes. In general, entities that are classified as
partnerships (or disregarded entities) for federal income tax purposes are “pass-through” entities
which are not required to pay federal income tax. Rather, partners or members of such entities are
allocated their shares of the items of income, gain, loss, deduction and credit of the entity, and
are potentially required to pay tax thereon, without regard to whether the partners or members
receive a distribution of cash from the entity. We include in our income our pro rata share of the
foregoing items for purposes of the various REIT income tests and in the computation of our REIT
taxable income. Moreover, for purposes of the REIT asset tests and subject to special rules
relating to the 10% asset test described above, we will include our pro rata share of the assets
held by our operating partnership, including its share of its subsidiary partnerships and limited
liability companies, based on our capital interest. See “— Taxation of Our Company.”
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Entity Classification. Our interests in our operating partnership and the subsidiary
partnerships and limited liability companies involve special tax considerations, including the
possibility that the IRS might challenge the status of one or more of these entities as a
partnership (or disregarded entity), as opposed to an association taxable as a corporation for
federal income tax purposes. If our operating partnership, or a subsidiary partnership or limited
liability company, were treated as an association, it would be taxable as a corporation and would
be required to pay an entity-level tax on its income. In this situation, the character of our
assets and items of gross income would change and could prevent us from satisfying the REIT asset
tests and possibly the REIT income tests. See “— Taxation of Our Company — Asset Tests” and “—
Income Tests.” This, in turn, could prevent us from qualifying as a REIT. See “— Failure to
Qualify” for a discussion of the effect of our failure to meet these tests for a taxable year. In
addition, a change in the tax status of our operating partnership’s or a subsidiary partnership’s
or limited liability company’s status might be treated as a taxable event. In that case, we might
incur a tax liability without any related cash distributions. We believe our operating partnership
and each of our other partnerships and limited liability companies will be classified as a
partnership or a disregarded entity for federal income tax purposes.
Allocations of Income, Gain, Loss and Deduction. The operating partnership agreement
generally provides that items of operating income and loss will be allocated to the holders of
units in proportion to the number of units held by each such unit holder. Certain limited partners
have agreed to guarantee debt of our operating partnership, either directly or indirectly through
an agreement to make capital contributions to our operating partnership under limited
circumstances. As a result of these guarantees or contribution agreements, and notwithstanding the
foregoing discussion of allocations of income and loss of our operating partnership to holders of
units, such limited partners could under limited circumstances be allocated a disproportionate
amount of net loss upon a liquidation of our operating partnership, which net loss would have
otherwise been allocable to us.
If an allocation of partnership income or loss does not comply with the requirements of
Section 704(b) of the Code and the Treasury regulations thereunder, the item subject to the
allocation will be reallocated in accordance with the partners’ interests in the partnership. This
reallocation will be determined by taking into account all of the facts and circumstances relating
to the economic arrangement of the partners with respect to such item. Our operating partnership’s
allocations of taxable income and loss are intended to comply with the requirements of Section
704(b) of the Code and the Treasury regulations promulgated thereunder.
Tax Allocations With Respect to the Properties. Under Section 704(c) of the Code, income,
gain, loss and deduction attributable to appreciated or depreciated property that is contributed to
a partnership in exchange for an interest in the partnership, must be allocated in a manner so that
the contributing partner is charged with the unrealized gain or benefits from the unrealized loss
associated with the property at the time of the contribution. The amount of the unrealized gain or
unrealized loss generally is equal to the difference between the fair market value or book value
and the adjusted tax basis of the contributed property at the time of contribution, as adjusted
from time to time. These allocations are solely for federal income tax purposes and do not affect
the book capital accounts or other economic or legal arrangements among the partners. Appreciated
property was contributed to our operating partnership in exchange for interests in our operating
partnership in connection with the formation transactions. The partnership agreement requires that
these allocations be made in a manner consistent with Section 704(c) of the Code. Treasury
regulations issued under Section 704(c) of the Code provide partnerships with a choice of several
methods of accounting for book-tax differences. We and our operating partnership have agreed to use
the “traditional method” for accounting for book-tax differences for the properties initially
contributed to our operating partnership. Under the traditional method, which is the least
favorable method from our perspective, the carryover basis of contributed interests in the
properties in the hands of our operating partnership (1) will or could cause us to be allocated
lower amounts of depreciation deductions for tax purposes than would be allocated to us if all
contributed properties were to have a tax basis equal to their fair market value at the time of the
contribution and (2) could cause us to be allocated taxable gain in the event of a sale of such
contributed interests or properties in excess of the economic or book income allocated to us as a
result of such sale, with a corresponding benefit to the other partners in our operating
partnership. An allocation described in (2) above might cause us or the other partners to recognize
taxable income in excess of cash proceeds in the event of a sale or other disposition of property,
which might adversely affect our ability to comply with the REIT distribution requirements. See “—
Taxation of Our Company — Requirements for Qualification as a Real Estate Investment Trust” and “—
Annual Distribution Requirements.” To the extent our depreciation is reduced, or our gain on sale
is increased, stockholders may recognize additional dividend income without an increase in
distributions.
Any property acquired by our operating partnership in a taxable transaction will initially
have a tax basis equal to its fair market value, and Section 704(c) of the Code will not apply.
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Taxation of Holders of Our Stock
The following summary describes certain of the United States federal income tax consequences
of owning and disposing of our stock.
Taxable U.S. Stockholders Generally. If you are a “U.S. Stockholder,” as defined below, this
section applies to you. Otherwise, the section, entitled “non-U.S. Stockholders,” applies to you.
Definition of U.S. Stockholder. A “U.S. Stockholder” is a beneficial holder of capital stock
or debt securities who is:
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a citizen or resident of the United States; |
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a corporation, or other entity created or organized in or under the laws of the United
States or of any state thereof or in the District of Columbia; |
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an estate the income of which is subject to United States federal income taxation
regardless of its source; or |
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a trust whose administration is subject to the primary supervision of a United States
court and which has one or more United States persons who have the authority to control all
substantial decisions of the trust. Notwithstanding the preceding sentence, to the extent
provided in the Treasury Regulations, certain trusts in existence on August 20, 1996, and
treated as United States persons prior to this date that elect to continue to be treated as
United States persons, shall also be considered U.S. Stockholders. |
Distributions Generally. Distributions out of our current or accumulated earnings and profits
will be treated as dividends and, other than with respect to capital gain dividends and certain
amounts that have previously been subject to corporate level tax, discussed below, will be taxable
to our taxable U.S. stockholders as ordinary income. See “— Tax Rates” below. As long as we qualify
as a REIT, these distributions will not be eligible for the dividends-received deduction in the
case of U.S. stockholders that are corporations. For purposes of determining whether distributions
to holders of our common stock are out of current or accumulated earnings and profits, our earnings
and profits will be allocated first to our outstanding preferred stock, if and when issued, and
then to our outstanding common stock.
To the extent that we make distributions on our common stock in excess of our current and
accumulated earnings and profits, these distributions will be treated first as a tax-free return of
capital to a U.S. stockholder. This treatment will reduce the U.S. stockholder’s adjusted tax basis
in its shares of our common stock by the amount of the distribution, but not below zero.
Distributions in excess of our current and accumulated earnings and profits and in excess of a U.S.
stockholder’s adjusted tax basis in its shares will be taxable as capital gains. Such gain will be
taxable as long-term capital gain if the shares have been held for more than one year. Dividends we
declare in October, November, or December of any year and which are payable to a stockholder of
record on a specified date in any of these months will be treated as both paid by us and received
by the stockholder on December 31 of that year, provided we actually pay the dividend on or before
January 31 of the following year. U.S. stockholders may not include in their own income tax returns
any of our net operating losses or capital losses.
Capital Gain Dividends. Dividends that we properly designate as capital gain dividends will be
taxable to our taxable U.S. stockholders as a gain from the sale or disposition of a capital asset,
to the extent that such gain does not exceed our actual net capital gain for the taxable year.
These gains may be taxable to non-corporate U.S. stockholders at a 15% or 25% rate. U.S.
stockholders that are corporations may, however, be required to treat up to 20% of some capital
gain dividends as ordinary income. If we properly designate any portion of a dividend as a capital
gain dividend then, except as otherwise required by law, we presently intend to allocate a portion
of the total capital gain dividends paid or made available to holders of all classes of our stock
for the year to the holders of our common stock in proportion to the amount that our total
dividends, as determined for United States federal income tax purposes, paid or made available to
the holders of such common stock for the year bears to the total dividends, as determined for
United States federal income tax purposes, paid or made available to holders of all classes of our
stock for the year.
Retention of Net Capital Gains. We may elect to retain, rather than distribute as a capital
gain dividend, all or a portion of our net capital gains. If we make this election, we would pay
tax on our retained net capital gains. In addition, to the extent we so elect, a U.S. stockholder
generally would:
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include its pro rata share of our undistributed net capital gains in computing its
long-term capital gains in its return for its taxable year in which the last day of our
taxable year falls, subject to certain limitations as to the amount that is includable; |
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be deemed to have paid the capital gains tax imposed on us on the designated amounts
included in the U.S. stockholder’s long-term capital gains; |
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receive a credit or refund for the amount of tax deemed paid by it; |
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increase the adjusted basis of its common stock by the difference between the amount of
includable gains and the tax deemed to have been paid by it; and |
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in the case of a U.S. stockholder that is a corporation, appropriately adjust its
earnings and profits for the retained capital gains in accordance with Treasury Regulations
to be promulgated by the IRS. |
Passive Activity Losses and Investment Interest Limitations. Distributions we make and gain
arising from the sale or exchange by a U.S. stockholder of our shares will not be treated as
passive activity income. As a result, U.S. stockholders generally will not be able to apply any
“passive losses” against this income or gain. A U.S. stockholder may elect to treat capital gain
dividends, capital gains from the disposition of stock and qualified dividend income as investment
income for purposes of computing the investment interest limitation, but in such case, the
stockholder will be taxed at ordinary income rates on such amount. Other distributions made by us,
to the extent they do not constitute a return of capital, generally will be treated as investment
income for purposes of computing the investment interest limitation.
Dispositions of Our Common Stock. If a U.S. stockholder sells or disposes of shares of our
common stock to a person other than us, it will recognize gain or loss for federal income tax
purposes in an amount equal to the difference between the amount of cash and the fair market value
of any property received on the sale or other disposition and the holder’s adjusted basis in the
shares for tax purposes. This gain or loss will be long-term capital gain or loss if the holder has
held the common stock for more than one year. If, however, a U.S. stockholder recognizes loss upon
the sale or other disposition of our common stock that it has held for six months or less, after
applying certain holding period rules, the loss recognized will be treated as a long-term capital
loss to the extent the U.S. stockholder received distributions from us which were required to be
treated as long-term capital gains.
Backup Withholding
We report to our U.S. stockholders and the IRS the amount of dividends paid during each
calendar year, and the amount of any tax withheld. Under the backup withholding rules, a
stockholder may be subject to backup withholding with respect to dividends paid unless the holder
is a corporation or comes within certain other exempt categories and, when required, demonstrates
this fact, or provides a 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 U.S. stockholder that does not provide us with its correct taxpayer identification number
may also be subject to penalties imposed by the IRS. Backup withholding is not an additional tax.
Any amount paid as backup withholding will be creditable against the stockholder’s federal income
tax liability. In addition, we may be required to withhold a portion of capital gain distributions
to any stockholders who fail to certify their non-foreign status. See “— Taxation of Non-U.S.
Stockholders.”
Tax Rates
The maximum tax rate for non-corporate taxpayers for (1) capital gains, including certain
“capital gain dividends,” has generally been reduced to 15% (although depending on the
characteristics of the assets which produced these gains and on designations which we may make,
certain capital gain dividends may be taxed at a 25% rate) and (2) “qualified dividend income” has
generally been reduced to 15%. In general, dividends payable by REITs are not eligible for the
reduced tax rate on corporate dividends, except to the extent that certain holding requirements
have been met and the REIT’s dividends are attributable to dividends received from taxable
corporations (such as its taxable REIT subsidiaries) or to income that was subject to tax at the
corporate/ REIT level (for example, if it distributed taxable income that it retained and paid tax
on in the prior taxable year). The currently applicable provisions of the United States federal
income tax laws relating to the 15% tax rate are currently scheduled to “sunset” or revert to the
provisions of prior law effective for taxable years beginning after December 31, 2010, at which
time the capital gains tax rate will be increased to 20% and the rate applicable to dividends will
be increased to the tax rate then applicable to ordinary income.
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Taxation of Tax-Exempt Stockholders
Dividend income from us and gain arising upon a sale of our common stock generally will not be
unrelated business taxable income to a tax-exempt stockholder, except as described below. This
income or gain will be unrelated business taxable income, however, if a tax-exempt stockholder
holds its shares as “debt-financed property” within the meaning of the Code or if the shares are
used in a trade or business of the tax-exempt stockholder. Generally, “debt-financed property” is
property, the acquisition or holding of which was financed through a borrowing by the tax-exempt
stockholder.
For tax-exempt stockholders which are social clubs, voluntary employee benefit associations,
supplemental unemployment benefit trusts, or qualified group legal services plans exempt from
federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) or (c)(20) of the Code,
respectively, income from an investment in our shares will constitute unrelated business taxable
income unless the organization is able to properly claim a deduction for amounts set aside or
placed in reserve for specific purposes so as to offset the income generated by its investment in
our shares. These prospective investors should consult their tax advisors concerning these “set
aside” and reserve requirements.
Notwithstanding the above, however, a portion of the dividends paid by a “pension-held REIT”
may be treated as unrelated business taxable income as to certain trusts that hold more than 10%,
by value, of the interests in the REIT. A REIT will not be a “pension-held REIT” if it is able to
satisfy the “not closely held” requirement without relying on the “look-through” exception with
respect to certain trusts or if such REIT is not “predominantly held” by “qualified trusts.” As a
result of limitations on the transfer and ownership of stock contained in our charter, we do not
expect to be classified as a “pension-held REIT,” and as a result, the tax treatment described in
this paragraph should be inapplicable to our stockholders. However, because our stock will be
publicly traded, we cannot guarantee that this will always be the case.
Taxation of Non-U.S. Stockholders
The preceding discussion does not address the rules governing United States federal income
taxation of the ownership and disposition of our common stock by persons that are non-U.S.
stockholders. In general, non-U.S. stockholders may be subject to special tax withholding
requirements on distributions from us and with respect to their sale or other disposition of our
common stock, except to the extent reduced or eliminated by an income tax treaty between the United
States and the non-U.S. stockholder’s country. A non-U.S. stockholder who is a stockholder of
record and is eligible for reduction or elimination of withholding must file an appropriate form
with us in order to claim such treatment. Non-U.S. stockholders should consult their tax advisors
concerning the United States federal income tax consequences to them of an acquisition of shares of
our common stock, including the United States federal income tax treatment of dispositions of
interests in and the receipt of distributions from us.
Other Tax Consequences
State, local and foreign income tax laws may differ substantially from the corresponding
federal income tax laws, and this discussion does not purport to describe any aspect of the tax
laws of any state, local or foreign jurisdiction. You should consult your tax advisor regarding the
effect of state and local tax laws with respect to our tax treatment as a REIT and on an investment
in our common stock.
PLAN OF DISTRIBUTION
Subject to the discussion below and in certain instances, we will distribute newly issued
shares of common stock sold under the plan. Unless directed otherwise by The Bank of New York,
purchases and sales under the plan usually will be made through an Affiliated Broker. You will
only be responsible for a transaction fee and your pro rata share of trading fees and any brokerage
commissions associated with your sales of shares of common stock attributable to you under the
plan. We will pay for all fees and commissions associated with your purchases under the plan.
We may sell common stock to owners of shares (including brokers or dealers) who, in connection
with any resales of such shares, may be deemed to be underwriters. These shares, including shares
acquired through waivers granted with respect to the stock purchase program of the plan, may be
resold in market transactions (including coverage of short positions) on any national security
exchange or automated quotation system on which common stock is traded or quoted, or in privately
negotiated transactions. Our common stock is listed on the NYSE under the symbol “BMR.” The
difference between the price owners who may be deemed to be underwriters pay us for shares of
common stock acquired under the plan, after deduction of the applicable discount, and the price at
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which such shares are resold, may be deemed to constitute underwriting commissions received by
these owners in connection with such transactions.
Pursuant to the plan, we may be requested to approve optional cash purchases in excess of
the allowable maximum amounts pursuant to requests for waiver on behalf of participants that may be
engaged in the securities business. In deciding whether to approve this request, we will consider
relevant factors including, but not limited to:
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the extent and nature of the participant’s participation in the plan; |
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our need for additional funds; |
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the attractiveness of obtaining the additional funds through the sale of common stock
under the plan as compared to other sources of funds; |
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the purchase price likely to apply to any sale of common stock; and |
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the aggregate amount of optional cash purchases for which requests for waiver have been submitted by all participants. |
Persons who acquire shares of common stock through the plan and resell them shortly after
acquiring them, including coverage of short positions, under some circumstances, may be
participating in a distribution of securities that would require compliance with Regulation M under
the Exchange Act and may be considered to be underwriters within the meaning of the Securities Act.
We will not extend to this person any rights or privileges other than those to which it would be
entitled as a participant, nor will we enter into any agreement with the person regarding the
person’s purchase of the shares or any resale or distribution thereof. We may, however, approve
requests for optional cash purchases by those persons in excess of allowable maximum limitations.
If requests are submitted for any investment date for an aggregate amount in excess of the amount
that we are willing to accept, we may honor the requests in order of receipt, pro rata or by any
other method which we determine to be appropriate.
Subject to the availability of common stock registered for issuance under the plan, there is
no total maximum number of shares that can be issued pursuant to the reinvestment of dividends.
From time to time, financial intermediaries may engage in positioning transactions in order to
benefit from the discount acquired through the reinvestment of dividends and optional cash payments
under the plan.
Common stock may not be available under the plan in all states. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any common stock or other
securities in any state or any other jurisdiction to any person to whom it is unlawful to make such
offer in such jurisdiction.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Latham & Watkins LLP, San Diego,
California. Venable LLP, Baltimore, Maryland, has issued an opinion to us regarding certain matters
of Maryland law.
EXPERTS
The consolidated balance sheets of BioMed Realty Trust, Inc. and subsidiaries as of December
31, 2006 and 2005, the related consolidated statements of income, stockholders’ equity and
comprehensive income of BioMed Realty Trust, Inc. and subsidiaries for the years ended December 31,
2006 and December 31, 2005 and the period from August 11, 2004 (commencement of operations) through
December 31, 2004, the related statements of income and owners’ equity of Inhale 201 Industrial
Road, L.P. for the period from January 1, 2004 through August 17, 2004, the related consolidated
statement of cash flows of BioMed Realty Trust, Inc. and subsidiaries for the years ended December
31, 2006 and December 31, 2005, the related consolidated and combined statement of cash flows of
BioMed Realty Trust, Inc. and subsidiaries and Inhale 201 Industrial Road, L.P. for the year ended
December 31, 2004, the related financial statement schedule III, management’s assessment of the
effectiveness of internal control over financial reporting as of December 31, 2006 and the
effectiveness of internal control over financial reporting as of December 31, 2006, of BioMed
Realty Trust, Inc. and subsidiaries, all incorporated in this prospectus by reference, have been so
incorporated in reliance upon the reports of KPMG LLP, independent registered public accounting
firm, appearing elsewhere (incorporated by reference) herein, and upon the authority of said firm
as experts in accounting and auditing.
42
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table itemizes the expenses incurred by us in connection with the issuance and
registration of the securities being registered hereunder. All amounts shown are estimates except
the Securities and Exchange Commission registration fee. We will pay all of the costs identified
below.
| |
|
|
|
|
SEC Registration Fee |
|
$ |
4,245 |
|
Printing and Engraving Expenses(1) |
|
$ |
10,000 |
|
Legal Fees and Expenses (1) |
|
$ |
50,000 |
|
Accounting Fees and Expenses(1) |
|
$ |
15,000 |
|
Miscellaneous(1) |
|
$ |
10,755 |
|
|
|
|
|
Total (1) |
|
$ |
90,000 |
|
|
|
|
|
|
|
|
| (1) |
|
Estimated. Actual amounts to be determined from time to time. |
Item 15. Indemnification of Directors and Officers.
Maryland law permits a Maryland corporation to include in its charter a provision limiting the
liability of its directors and officers to the corporation and its stockholders for money damages
except for liability resulting from (1) actual receipt of an improper benefit or profit in money,
property or services or (2) active and deliberate dishonesty established by a final judgment and
which is material to the cause of action. Our charter contains a provision which eliminates
directors’ and officers’ liability to the maximum extent permitted by Maryland law.
Our charter authorizes us, to the maximum extent permitted by Maryland law, to obligate
ourselves to indemnify and to pay or reimburse reasonable expenses in advance of final disposition
of a proceeding to (1) any present or former director or officer or (2) any individual who, while a
director or officer of our company and at our request, serves or has served another REIT,
corporation, partnership, joint venture, trust, employee benefit plan or any other enterprise as a
trustee, director, officer or partner of such REIT, corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise from and against any claim or liability to which such
individual may become subject or which such individual may incur by reason of his or her service in
such capacity. Our bylaws obligate us, to the maximum extent permitted by Maryland law, to
indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a
proceeding to (1) any present or former director or officer who is made, or threatened to be made,
a party to the proceeding by reason of his or her service in that capacity or (2) any individual
who, while a director or officer of our company and at our request, serves or has served another
REIT, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise as
a trustee, director, officer or partner and who is made, or threatened to be made, a party to the
proceeding by reason of his or her service in that capacity, against any claim or liability to
which he or she may become subject or may incur by reason of his or her status as a present or
former director or officer of the company. Our charter and bylaws also permit us to indemnify and
advance expenses to any individual who served a predecessor of our company in any of the capacities
described above and to any employee or agent of our company or a predecessor of our company.
Maryland law requires a corporation (unless its charter provides otherwise, which our charter
does not) to indemnify a director or officer who has been successful, on the merits or otherwise,
in the defense of any proceeding to which he or she is made, or threatened to be made, a party by
reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its
present and former directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with any proceeding to
which they may be made, or threatened to be made, a party by reason of their service in those or
other capacities unless it is established that (1) the act or omission of the director or officer
was material to the matter giving rise to the proceeding and (a) was committed in bad faith or (b)
was a result of active and deliberate dishonesty, (2) the director or officer actually received an
improper personal benefit in money, property or services or (3) in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act or omission was
unlawful. However, a Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation or if the director or officer was adjudged to be liable on the
basis of an improperly received personal benefit, unless in either case a court orders
indemnification and then only for expenses. Maryland law permits a corporation to advance
reasonable expenses to a director or officer upon the corporation’s receipt of (1) a written
affirmation by the director or officer of his or her good faith belief that he or she has met the
standard of conduct
II-1
necessary for indemnification and (2) a written undertaking by him or her or on his or her
behalf to repay the amount paid or reimbursed by us if it shall ultimately be determined that the
standard of conduct was not met.
We have entered into indemnification agreements with each of our executive officers and
directors whereby we agree to indemnify such executive officers and directors to the fullest extent
permitted by Maryland law against all expenses and liabilities, subject to limited exceptions. The
indemnification agreements require us to indemnify the director or officer party thereto, the
indemnitee, against all judgments, penalties, fines and amounts paid in settlement and all expenses
actually and reasonably incurred by the indemnitee or on his or her behalf in connection with a
proceeding other than one initiated by or on behalf of us. In addition, the indemnification
agreements require us to indemnify the indemnitee against all amounts paid in settlement and all
expenses actually and reasonably incurred by the indemnitee or on his or her behalf in connection
with a proceeding that is brought by or on behalf of us. In either case, the indemnitee is not
entitled to indemnification if it is established that one of the exceptions to indemnification
under Maryland law set forth above exists.
In addition, the indemnification agreements require us to advance reasonable expenses incurred
by the indemnitee within ten days of the receipt by us of a statement from the indemnitee
requesting the advance, provided the statement evidences the expenses and is accompanied by:
| |
• |
|
a written affirmation of the indemnitee’s good faith belief that he or she has met the
standard of conduct necessary for indemnification, and |
| |
| |
• |
|
an undertaking by or on behalf of the Indemnitee to repay the amount if it is ultimately
determined that the standard of conduct was not met. |
The indemnification agreements also provide for procedures for the determination of
entitlement to indemnification, including requiring such determination be made by independent
counsel after a change of control of us.
In addition, our directors and officers are indemnified for specified liabilities and expenses
pursuant to the partnership agreement of BioMed Realty, L.P., the partnership in which we serve as
sole general partner.
Insofar as the foregoing provisions permit indemnification of directors, officers or persons
controlling us for liability arising under the Securities Act, we have been informed that, in the
opinion of the Securities and Exchange Commission, this indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
Item 16. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this
registration statement on Form S-3:
| |
|
|
| Exhibit |
|
|
3.1
|
|
Articles of Amendment and Restatement of BioMed Realty Trust, Inc.(1) |
|
|
|
3.2
|
|
Amended and Restated Bylaws of BioMed Realty Trust, Inc.(1) |
|
|
|
3.3
|
|
Articles Supplementary Classifying BioMed Realty Trust, Inc.’s 7.375% Series A
Cumulative Redeemable Preferred Stock.(2) |
|
|
|
4.1
|
|
Form of Certificate for Common Stock of BioMed Realty Trust, Inc.(3) |
|
|
|
4.2
|
|
Form of Certificate for 7.375% Series A Cumulative Redeemable Preferred Stock of
BioMed Realty Trust, Inc.(2) |
|
|
|
5.1
|
|
Opinion of Venable LLP.(4) |
|
|
|
8.1
|
|
Opinion of Latham & Watkins LLP with respect to tax matters.(4) |
|
|
|
10.1
|
|
Fourth Amended and Restated Agreement of Limited Partnership of BioMed Realty,
L.P. dated as of January 18, 2007.(5) |
|
|
|
10.2
|
|
Dividend Reinvestment and Stock Purchase Plan.(4) |
|
|
|
23.1
|
|
Consent of Venable LLP (included in Exhibit 5.1).(4) |
|
|
|
23.2
|
|
Consent of Latham & Watkins LLP (included in Exhibit 8.1).(4) |
|
|
|
23.3
|
|
Consent of KPMG LLP, independent registered public accounting firm.(4) |
|
|
|
24.1
|
|
Power of Attorney (included on Signature Page).(4) |
|
|
|
99.1
|
|
Letter to Stockholders regarding
Dividend Reinvestment and Stock Purchase Plan.(4) |
II-2
|
|
|
| (1) |
|
Incorporated herein by reference to BioMed Realty Trust, Inc.’s Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on September 20, 2004. |
| |
| (2) |
|
Incorporated herein by reference to BioMed Realty Trust Inc.’s Registration Statement on Form
8-A filed with the Securities and Exchange Commission on January 17, 2007. |
| |
| (3) |
|
Incorporated herein by reference to BioMed Realty Trust, Inc.’s Registration Statement of
Form S-11, as amended (File No. 333-115204), filed with the Securities and Exchange Commission
on May 5, 2004. |
| |
| (4) |
|
Filed herewith. |
| |
| (5) |
|
Incorporated herein by reference to BioMed Realty Trust, Inc.’s Annual Report on Form 10-K
filed with the Securities and Exchange Commission on February 28, 2007. |
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended;
(ii) To reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section
do not apply if the information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the 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.
(4) That, for the purpose of determining liability under the Securities Act of 1933
to any purchaser:
(i) each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be
deemed to be part of the registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
(ii) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or
(b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the
II-3
information required by section 10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for
liability purposes of the issuer and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such document
immediately prior to such effective date.
(5) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating
to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of
the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its securities provided by
or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant pursuant to existing
provisions or arrangements whereby the registrant may indemnify a director, officer or controlling
person of the registrant against liabilities arising under the Securities Act, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than
for the payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
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 San Diego, State of California, on this
11th day of June 2007.
| |
|
|
|
|
|
|
| |
|
BIOMED REALTY TRUST, INC. |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Alan D. Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan D. Gold |
|
|
|
|
|
|
Chairman, President and Chief Executive Officer |
|
|
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Alan D. Gold and Gary A. Kreitzer, and each of them, with full power to act without the
other, such person’s true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in any and all
capacities, to sign this Registration Statement, and any and all pre-effective and post-effective
amendments thereto as well as any related registration statements (or amendment thereto) filed
pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as amended, and to file the
same, with exhibits and schedules thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing necessary or
desirable to be done in and about the premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed by the following persons in the capacities and on the dates indicated.
| |
|
|
|
|
| Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ Alan D. Gold
|
|
Chairman of the Board, President
|
|
June 11, 2007 |
|
|
and
Chief Executive Officer |
|
|
|
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
/s/ Kent Griffin
|
|
Chief Financial Officer
|
|
June 11, 2007 |
|
|
(Principal
Financial Officer) |
|
|
|
|
|
|
|
/s/ Greg Lubushkin
|
|
Vice President — Chief
|
|
June 11, 2007 |
|
|
Accounting
Officer (Principal |
|
|
|
|
Accounting Officer) |
|
|
|
|
|
|
|
/s/ Gary A. Kreitzer
|
|
Executive Vice President, General
|
|
June 11, 2007 |
|
|
Counsel,
Secretary and Director |
|
|
|
|
|
|
|
/s/ Barbara R. Cambon
|
|
Director
|
|
June 11, 2007 |
|
|
|
|
|
|
|
|
|
|
/s/ Edward A. Dennis
|
|
Director
|
|
June 11, 2007 |
|
|
|
|
|
|
|
|
|
|
/s/ Mark J. Riedy
|
|
Director
|
|
June 11, 2007 |
|
|
|
|
|
|
|
|
|
|
/s/ Theodore D. Roth
|
|
Director
|
|
June 11, 2007 |
|
|
|
|
|
|
|
|
|
|
/s/ M. Faye Wilson
|
|
Director
|
|
June 11, 2007 |
|
|
|
|
|
II-5
EXHIBIT INDEX
| |
|
|
| Exhibit |
|
|
3.1
|
|
Articles of Amendment and Restatement of BioMed Realty Trust, Inc.(1) |
|
|
|
3.2
|
|
Amended and Restated Bylaws of BioMed Realty Trust, Inc.(1) |
|
|
|
3.3
|
|
Articles Supplementary Classifying BioMed Realty Trust, Inc.’s 7.375% Series A
Cumulative Redeemable Preferred Stock.(2) |
|
|
|
4.1
|
|
Form of Certificate for Common Stock of BioMed Realty Trust, Inc.(3) |
|
|
|
4.2
|
|
Form of Certificate for 7.375% Series A Cumulative Redeemable Preferred Stock of
BioMed Realty Trust, Inc.(2) |
|
|
|
5.1
|
|
Opinion of Venable LLP.(4) |
|
|
|
8.1
|
|
Opinion of Latham & Watkins LLP with respect to tax matters.(4) |
|
|
|
10.1
|
|
Fourth Amended and Restated Agreement of Limited Partnership of BioMed Realty,
L.P. dated as of January 18, 2007.(5) |
|
|
|
10.2
|
|
Dividend Reinvestment and Stock Purchase Plan.(4) |
|
|
|
23.1
|
|
Consent of Venable LLP (included in Exhibit 5.1).(4) |
|
|
|
23.2
|
|
Consent of Latham & Watkins LLP (included in Exhibit 8.1).(4) |
|
|
|
23.3
|
|
Consent of KPMG LLP, independent registered public accounting firm.(4) |
|
|
|
24.1
|
|
Power of Attorney (included on Signature Page).(4) |
|
|
|
99.1
|
|
Letter to Stockholders regarding
Dividend Reinvestment and Stock Purchase Plan.(4) |
|
|
|
| (1) |
|
Incorporated herein by reference to BioMed Realty Trust, Inc.’s Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on September 20, 2004. |
| |
| (2) |
|
Incorporated herein by reference to BioMed Realty Trust Inc.’s Registration Statement on Form
8-A filed with the Securities and Exchange Commission on January 17, 2007. |
| |
| (3) |
|
Incorporated herein by reference to BioMed Realty Trust, Inc.’s Registration Statement of
Form S-11, as amended (File No. 333-115204), filed with the Securities and Exchange Commission
on May 5, 2004. |
| |
| (4) |
|
Filed herewith. |
| |
| (5) |
|
Incorporated herein by reference to BioMed Realty Trust, Inc.’s Annual Report on Form 10-K
filed with the Securities and Exchange Commission on February 28, 2007. |
II-6