0000912057-01-537841.txt : 20011119 0000912057-01-537841.hdr.sgml : 20011119 ACCESSION NUMBER: 0000912057-01-537841 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20011106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON PRIVATE FINANCIAL HOLDINGS INC CENTRAL INDEX KEY: 0000821127 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 042976299 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-72836 FILM NUMBER: 1776082 BUSINESS ADDRESS: STREET 1: 10 POST OFFICE SQ CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6175561900 MAIL ADDRESS: STREET 1: 10 POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: BOSTON PRIVATE BANCORP INC DATE OF NAME CHANGE: 19920703 S-3 1 a2062424zs-3.txt FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 6, 2001 REGISTRATION STATEMENT NO. 333- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- BOSTON PRIVATE FINANCIAL HOLDINGS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2976299 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR IDENTIFICATION NUMBER) ORGANIZATION)
-------------------------- TEN POST OFFICE SQUARE BOSTON, MASSACHUSETTS 02109 (617) 912-1900 (ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) -------------------------- TIMOTHY L. VAILL PRESIDENT AND CHIEF EXECUTIVE OFFICER Boston Private Financial Holdings, Inc. Ten Post Office Square Boston, Massachusetts 02109 (617) 912-1900 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF AGENT FOR SERVICE) -------------------------- COPIES OF ALL COMMUNICATIONS SHOULD BE SENT TO: WILLIAM P. MAYER, ESQ. Goodwin Procter LLP Exchange Place Boston, Massachusetts 02109-2881 (617) 570-1000 -------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / _____________________________________________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT TO BE AGGREGATE PRICE PER AGGREGATE OFFERING AMOUNT OF TITLE OF SHARES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE Common Stock, par value $1.00 per share................................ 226,236 shares $18.79 $4,250,975 $1,063
(1) Based upon the average of the high and low sale prices reported on the Nasdaq National Market on October 30, 2001 and estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) under the Securities Act of 1933. -------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE. PROSPECTUS 226,236 SHARES BOSTON PRIVATE FINANCIAL HOLDINGS, INC. COMMON STOCK (PAR VALUE $1.00 PER SHARE) The selling stockholders identified in this prospectus, and any of their pledgees, donees, transferees or other successors in interest, may offer to sell up to an aggregate of 226,236 shares of our common stock. The selling stockholders may sell their shares in any manner described in the "Plan of Distribution" section of this prospectus beginning on page 17. We are filing the registration statement of which this prospectus is a part at this time to fulfill a contractual obligation to do so, which we undertook at the time of the original issuance of these shares of common stock. Our common stock is traded under the symbol "BPFH" on The Nasdaq National Market. On November 5, 2001, the reported closing price for our common stock on The Nasdaq National Market was $21.13 per share. We will not receive any of the proceeds from the sale of these shares of common stock. We have agreed to bear all of the expenses in connection with the registration and sale of these shares of common stock other than underwriting discounts, if any, and selling commissions. See "Risk Factors" beginning on page 4 for a description of the risk factors that you should carefully consider before your invest in our common stock. ------------------------ NEITHER THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION, THE COMMISSIONER OF BANKS OF THE COMMONWEALTH OF MASSACHUSETTS, NOR THE FEDERAL DEPOSIT INSURANCE CORPORATION 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. ------------------------ OUR SHARES ARE NOT DEPOSIT ACCOUNTS OF ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ------------------------ THE DATE OF THIS PROSPECTUS IS , 2001 ------------------------ TABLE OF CONTENTS ------------------------
PAGE -------- Prospectus Summary.......................................... 2 Risk Factors................................................ 4 Special Note Regarding Forward-Looking Statements........... 11 Boston Private.............................................. 12 Use of Proceeds............................................. 14 Registration Rights......................................... 14 Selling Stockholders........................................ 15 Plan of Distribution........................................ 17 Available Information....................................... 19 Incorporation of Certain Documents by Reference............. 19 Experts..................................................... 20 Legal Matters............................................... 20
------------------------ Our address is Boston Private Financial Holdings, Inc., Ten Post Office Square, Boston, Massachusetts 02109 (telephone number (617) 912-1900). ------------------------ YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE INFORMATION THAT IS NOT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES. PROSPECTUS SUMMARY This summary highlights information contained in other parts of this prospectus. It does not contain all of the information that you should consider before investing in shares of our common stock. You should read the entire prospectus carefully. In this prospectus, the terms "Boston Private," "we," "us" and "our" refer to Boston Private Financial Holdings, Inc. Unless the context otherwise requires, "common stock" refers to the common stock, par value $1.00 per share, of Boston Private. DESCRIPTION OF BOSTON PRIVATE We are a Massachusetts corporation and a registered bank holding company under the Bank Holding Company Act of 1956. We are the parent holding company of Boston Private Bank & Trust Company, a wholly-owned bank subsidiary. Boston Private Bank & Trust Company is a trust company chartered in Massachusetts and the deposits of which are insured by the Federal Deposit Insurance Corporation. We conduct substantially all of our business through our wholly-owned subsidiaries, Boston Private Bank & Trust Company, Westfield Capital Management Company, Sand Hill Advisors, Inc., RINET Company, Inc. and Boston Private Value Investors, Inc. RECENT DEVELOPMENTS Recently, we entered into an agreement to merge with Borel Bank & Trust Company, a California state banking corporation based in San Mateo County in the State of California. After this merger, Borel Bank will operate as our wholly-owned subsidiary. Borel Bank conducts a commercial banking business which includes accepting demand, savings and time deposits and making commercial, real estate and consumer loans. Borel Bank also issues cashiers checks and sells money orders and traveler's checks and provides 24-hour automated teller services, bank-by-mail, courier and night depository services. Borel Bank offers various savings plans and provides safe deposit boxes as well as other customary banking services and facilities, except international operations. Additionally, Borel Bank offers trust services and provides a variety of other fiduciary services including management, advisory and administrative services to individuals. In June 2000, Borel Bank launched an on-line banking service that allows clients access to their accounts through the use of the Internet. The merger with Borel Bank will require the approval of both our stockholders and Borel Bank's stockholders, neither of which has been obtained as of the date of this prospectus, as well as several other regulatory approvals and other third-party approvals and consents. In the event that the merger is consummated, the stockholders of Borel Bank will receive shares of our common stock. These shares, subject to some limited exceptions, will be immediately available for sale in the public market. The number of shares to be issued in this transaction is not currently determinable, although under the current terms of the agreement with Borel Bank such shares are anticipated to be approximately 6,935,530 shares of our common stock. This transaction may not occur or may occur on terms substantially different from those currently proposed. THE OFFERING This prospectus relates to 226,236 shares of our common stock that may be offered for sale by the selling stockholders. We originally issued these shares of common stock in the merger of E.R. Taylor Investments, Inc. into Boston Private Value Investors on February 28, 2001 and the merger of Tuckernuck Partners, Inc., also known as Kanon Bloch Carre, into our subsidiary RINET Company on October 1, 2001. In each of those transactions, we granted registration rights to the selling stockholders. We are registering the common stock covered by this prospectus in order to fulfill our contractual obligations with regards to these registration rights. Registration of the common stock does not necessarily mean that all or any portion of such stock will be offered for sale by the selling stockholders. 2 We have agreed to bear the expenses of the registration of the common stock under federal and state securities laws but we will not receive any proceeds from the sale of any common stock offered under this prospectus. PLAN OF DISTRIBUTION The selling stockholders may sell the shares of common stock registered under this prospectus through agents or dealers, directly to one or more individuals, institutions or other purchasers or through any combination of these methods of sale. The distribution of the securities may be effected in one or more transactions at market prices then prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. See "Plan of Distribution." 3 RISK FACTORS AN INVESTMENT IN OUR COMMON STOCK INVOLVES VARIOUS RISKS. IN DECIDING WHETHER OR NOT TO INVEST IN OUR COMMON STOCK, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FATORS: WE MAY NOT BE ABLE TO ATTRACT AND RETAIN BANKING CUSTOMERS AT CURRENT LEVELS. Competition in the local banking industry coupled with our relatively small size may limit the ability of Boston Private Bank & Trust Company to attract and retain banking customers. Boston Private Bank & Trust Company faces competition from the following: - other banking institutions (including larger Boston and suburban commercial banking organizations), - savings banks, - credit unions, - other financial institutions, and - non-bank financial service companies serving eastern Massachusetts and adjoining areas. In particular, Boston Private Bank & Trust Company's competitors include several major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous banking locations and mount extensive promotional and advertising campaigns. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits and range and quality of services provided. Because Boston Private Bank & Trust Company maintains a smaller staff and has fewer financial and other resources than larger institutions with which it competes, it may be limited in its ability to attract customers. In addition, some of Boston Private Bank & Trust Company's current commercial banking customers may seek alternative banking sources as they develop needs for credit facilities larger than Boston Private Bank & Trust Company can accommodate. If Boston Private Bank & Trust Company is unable to attract and retain banking customers, it may be unable to continue its loan growth and its results of operations and financial condition may otherwise be negatively impacted. Because Boston Private Bank & Trust Company is currently our sole banking subsidiary, its financial performance contributes to substantial portion of our overall results of operations and financial condition. WE MAY NOT BE ABLE TO ATTRACT AND RETAIN INVESTMENT MANAGEMENT CLIENTS AT CURRENT LEVELS. Due to the intense competition, we and our investment management subsidiaries, Westfield Capital Management, Sand Hill Advisors and Boston Private Value Investors, as well as the investment management department of Boston Private Bank & Trust Company, may not be able to attract and retain investment management clients at current levels. In the investment management industry, we compete primarily with the following: - commercial banks and trust companies, - mutual fund companies, - investment advisory firms, - stock brokerage firms, - law firms, and - other financial services companies. 4 Competition is especially keen in our geographic market areas, because there are numerous well-established and successful investment management firms in New England and in Northern California. Many of our competitors have greater resources than we do. Our ability to successfully attract and retain investment management clients is dependent upon our ability to compete with competitors' investment products, level of investment performance, client services and marketing and distribution capabilities. If we are not successful in that regard, our results from operations and financial position may be negatively impacted. In addition, our ability to retain investment management clients may be impaired by the fact that our investment management contracts are typically short-term in nature. Substantially all of our investment management revenues are derived from investment management contracts which are terminable upon less then thirty (30) days notice. Most of our clients may withdraw funds from accounts under management, generally in their sole discretion. OUR STOCK PRICE MAY DECLINE IF WE ARE UNABLE TO COMPLETE OUR PROPOSED MERGER WITH BOREL BANK OR IF THE TERMS OF THE MERGER NEED TO BE MODIFIED TO CLOSE THE TRANSACTION. Our proposed merger with Borel Bank is subject to the receipt of several approvals and consents, including approvals from both our stockholders and the stockholders of Borel Bank as well as several regulatory approvals. In addition, Borel Bank has the right to terminate the transaction if the average price of our common stock declines below $14.238 over a defined measurement period prior to the closing of the transaction and the Philadelphia/KBW Bank Index outperforms our common stock price by fifteen percent (15%) over approximately the same period. If Borel Bank elects to terminate the transaction on this basis, we do have the right to increase the number of shares of our common stock to be issued to the current Borel Bank stockholders to complete the transaction. Our stock price may experience a substantial decline if we are unable to close this transaction for any reason or have to increase the number of shares of our common stock to be issued to close this transaction. UNANTICIPATED COSTS RELATING TO THE MERGER WITH BOREL BANK COULD REDUCE OUR FUTURE EARNINGS PER SHARE. We believe that we have reasonably estimated the likely costs of our proposed merger with Borel Bank. However, it is possible that unexpected transaction costs such as taxes, fees or professional expenses or unexpected future operating expenses such as increased personnel costs or increased taxes, as well as other types of unanticipated adverse developments, could have a material adverse effect on the results of our operations and financial condition after the merger. If unexpected costs are incurred, the merger could have a significant dilutive effect on our earnings per share. In other words, if the merger is completed and these unanticipated costs are incurred, we believe that the earnings per share of our common stock could be less than they would have been if the merger had not been completed. A LARGE DAMAGE AWARD IN A LAWSUIT PENDING AGAINST BOREL BANK COULD HAVE A SIGNIFICANT ADVERSE IMPACT ON OUR BUSINESS AND FINANCIAL CONDITION. Since 1984, Borel Bank has served as the trustee of a private trust which has been the subject of protracted litigation. During the last seven years there have been three actions filed in the Superior Court for San Mateo County, California by certain beneficiaries of the trust relating to the management and proposed sale of certain real property. These beneficiaries have claimed, among other things, that Borel Bank breached its fiduciary duties as the trustee. Borel Bank has prevailed in the first action and final judgment has been entered in its favor. Borel Bank has prevailed in the trial court in the second action; however, the appeals court has remanded that case to the trial court for limited further proceedings. The third case has been held in abeyance by the trial court for several years pending disposition of the first two matters. In their complaint in the third case, the plaintiffs claimed 5 $234,200,000 in damages, but the calculation of damages in the complaint is inconsistent with the total amounts claimed. Moreover, the plaintiffs have never substantiated nor provided any evidence of damages in such amounts. While the ultimate results of these proceedings cannot be predicted with certainty, at the present time, Borel Bank's management, based on consultation with legal counsel, believes there is no basis to conclude that liability with respect to these matters is probable and there is no basis for determining their potential impact, if any, on Borel Bank's business and financial condition. Adverse developments in these lawsuits could have a material adverse effect on the combined business and financial condition of Borel Bank and Boston Private following the completion of the proposed merger. DEFAULTS IN THE REPAYMENT OF LOANS MAY NEGATIVELY IMPACT OUR BUSINESS. Defaults in the repayment of loans by Boston Private Bank & Trust Company's customers may negatively impact our business. A borrower's default on its obligations under one or more of Boston Private Bank & Trust Company's loans may result in lost principal and interest income and increased operating expenses as a result of the allocation of management time and resources to the collection and work-out of the loan. In certain situations, where collection efforts are unsuccessful or acceptable work-out arrangements cannot be reached, Boston Private Bank & Trust Company may have to write off the loan in whole or in part. In such situations, Boston Private Bank & Trust Company may acquire any real estate or other assets, if any, which secure the loan through foreclosure or other similar available remedies. In such cases, the amount owed under the defaulted loan often exceeds the value of the assets acquired. Boston Private Bank & Trust Company's management periodically makes a determination of an allowance for loan losses based on available information, including the quality of its own loan portfolio, certain economic conditions, the value of the underlying collateral and the level of its non-accruing loans. Provisions to this allowance result in an expense for the period. If, as a result of general economic conditions or an increase in defaulted loans, management determines that additional increases in the allowance for loan losses are necessary, Boston Private Bank & Trust Company will incur additional expenses. In addition, bank regulatory agencies periodically review Boston Private Bank & Trust Company allowance for loan losses and the values it attributes to real estate acquired through foreclosure or other similar remedies. Such regulatory agencies may require Boston Private Bank & Trust Company to adjust its determination of the value for these items. These adjustments could negatively impact Boston Private Bank & Trust Company's results of operations or financial position. A DOWNTURN IN THE LOCAL ECONOMY OR REAL ESTATE MARKET COULD NEGATIVELY IMPACT OUR BANKING BUSINESS. A downturn in the local economy or real estate market could negatively impact our banking business. Because Boston Private Bank & Trust Company serves primarily individuals and smaller businesses located in eastern Massachusetts and adjoining areas, with a particular concentration in the greater Boston metropolitan area, the ability of Boston Private Bank & Trust Company customers to repay their loans is impacted by the economic conditions in these areas. In particular, current negative economic trends, including the possibility of a recession, increased unemployment and recently announced significant layoffs of employees located in New England, as well as increased economic uncertainty created by the September 11, 2001 terrorist attacks on the World Trade Center and the Pentagon, and the United States' war on terrorism in Afghanistan and elsewhere, will likely negatively impact businesses in those areas. We are currently uncertain as to the extent of such an impact or whether such an impact would harm our banking business. Boston Private Bank & Trust Company's commercial loans are generally concentrated in the following customer groups: - real estate developers and investors, 6 - financial service providers, - technology companies, - manufacturing and communications companies, - professional service providers, - general commercial and industrial companies, and - individuals. Boston Private Bank & Trust Company's commercial loans, with limited exceptions, are secured by either real estate, usually income producing residential and commercial properties, marketable securities or corporate assets usually, accounts receivable, equipment or inventory. Substantially all of Boston Private Bank & Trust Company's residential mortgage and home equity loans are secured by residential property in eastern Massachusetts. As a result, conditions in the real estate market specifically, and the Massachusetts economy generally, can materially impact the ability of Boston Private Bank & Trust Company's borrowers to repay their loans and affect the value of the collateral securing these loans. WE MAY BE UNABLE TO SUCCESSFULLY INTEGRATE BOREL BANK'S OPERATIONS AND RETAIN KEY BOREL BANK EMPLOYEES. The merger involves the integration of two companies, each with a separate emphasis, that have previously operated independently. The difficulties of combining the companies' operations include: - coordinating geographically separated organizations, - combining Borel Bank's business, which emphasizes commercial banking, with our business, which includes a greater percentage of investment management and trust operations, - combining different corporate cultures, and - retaining key employees. The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of the combined company's businesses and the loss of key personnel. The integration of the two companies will require the experience and expertise of certain key employees of Borel Bank that we expect to retain. There can be no assurances, however, that we will be successful in retaining these employees for the time period necessary to successfully integrate Borel Bank's operations with ours. The diversion of management's attention and any delays or difficulties encountered in connection with the merger and the integration of the two companies' operations could have an adverse effect on the business and results of operations of the combined company. IF THE MERGER IS NOT COMPLETED, WE WILL HAVE INCURRED SUBSTANTIAL EXPENSES WITHOUT REALIZING THE EXPECTED BENEFITS. We have incurred substantial expenses in connection with the proposed merger with Borel Bank. If the merger is not completed, we expect to incur approximately $980,000 to $2 million in merger related expenses excluding any termination fees, if applicable. These expenses may have a material adverse impact on the results of our operations and financial condition because we would not have realized the expected benefits of the merger. There can be no assurance that the merger will be completed. Even if the merger is completed, because the merger is being accounted for as a pooling of interests, we will record all merger-related expenses on the combined company's income statement for the quarter and the year in which the merger is completed, resulting in a significant reduction in actual earnings per share for those periods. 7 THE MERGER WITH BOREL BANK MAY NOT BE ABLE TO BE ACCOUNTED FOR AS A POOLING OF INTERESTS BUSINESS COMBINATION. We intend to account for the merger as a pooling of interests business combination and, as a condition to closing, each of Borel Bank and Boston Private anticipates receiving letters from their respective accountants confirming the availability of "pooling-of-interests" accounting treatment for the merger. However, such accounting method may not be available and Borel Bank and Boston Private may waive the receipt of these accountants' letters as a condition to closing. Failure to account for the merger as a pooling of interests business combination could have a material adverse effect on our financial results. FLUCTUATIONS IN INTEREST RATES MAY NEGATIVELY IMPACT OUR BANKING BUSINESS. Fluctuations in interest rates may negatively impact the business of Boston Private Bank & Trust Company. Boston Private Bank & Trust Company's main source of income from operations is net interest income, which is equal to the difference between the interest income received on interest-bearing assets, usually, loans and investment securities, and the interest expense incurred in connection with interest-bearing liabilities, usually deposits and borrowings. Boston Private Bank & Trust Company's net interest income can be affected significantly by changes in market interest rates. In particular, changes in relative interest rates may reduce Boston Private Bank & Trust Company's net interest income as the difference between interest income and interest expense decreases. As a result, Boston Private Bank & Trust Company has adopted asset and liability management policies to minimize the potential adverse effects of changes in interest rates on net interest income, primarily by altering the mix and maturity of loans, investments and funding sources. However, even with these policies in place, changes in interest rates may negatively impact Boston Private Bank & Trust Company's results of operations and financial position. An increase in interest rates could also have a negative impact on Boston Private Bank & Trust Company's results of operations by reducing the ability of borrowers to repay their current loan obligations, which could not only result in increased loan defaults, foreclosures and write-offs, but also necessitate further increases to Boston Private Bank & Trust Company's allowance for the loan losses. BOSTON PRIVATE BANK & TRUST COMPANY'S COST OF FUNDS FOR BANKING OPERATIONS MAY INCREASE AS A RESULT OF GENERAL ECONOMIC CONDITIONS, INTEREST RATES AND COMPETITIVE PRESSURES. Boston Private Bank & Trust Company's cost of funds for banking operations may increase as a result of general economic conditions, interest rates and competitive pressures. Boston Private Bank & Trust Company has traditionally obtained funds principally through deposits and through borrowings. As a general matter, deposits are a cheaper source of funds than borrowing, because interest rates paid for deposits are typically less than interest rates charged for borrowings. Historically and in comparison to commercial banking averages, Boston Private Bank & Trust Company has had a higher percentage of its time deposits in denominations of $100,000 or more. Within the banking industry, the amounts of such deposits are generally considered more likely to fluctuate than deposits of smaller denominations. If as a result of general economic conditions, market interest rates, competitive pressures or otherwise, the value of deposits at Boston Private Bank & Trust Company decreases relative to its overall banking operations, Boston Private Bank & Trust Company may have to rely more heavily on borrowings as a source of funds in the future. OUR INVESTMENT MANAGEMENT BUSINESS MAY BE NEGATIVELY IMPACTED BY CHANGES IN ECONOMIC AND MARKET CONDITIONS. Our investment management business may be negatively impacted by changes in general economic and market conditions because the performance of such business is directly affected by conditions in the financial and securities markets. 8 The financial markets and the investment management industry in general have experienced record performance and record growth in recent years. The financial markets and businesses operating in the securities industry, however, are highly volatile, meaning that performance results can vary greatly within short periods of time, and are directly affected by, among other factors, domestic and foreign economic conditions and general trends in business and finance, all of which are beyond our control. We cannot assure you that broad market performance will be favorable in the future. In particular, the financial and securities markets have experienced a significant downturn since March 2000. This decline has impacted our investment management business, in particular, performance fees we earn on mutual funds for which Westfield Capital Management acts as subadviser. In addition, following the September 11, 2001 terrorist attacks on the World Trade Center and the Pentagon, the world financial and securities markets experienced a significant and precipitous decline and will likely continue to experience significant volatility as a result of, among other things, world economic and political conditions. Continued decline in the financial markets or a lack of sustained growth may result in a corresponding decline in performance and may adversely affect the assets which we manage. In addition, Westfield Capital Management's, Sand Hill Advisors' and Boston Private Value Investors' investment management contracts generally provide for fees payable for investment management services based on the market value of assets under management, although a portion of Westfield Capital Management's contracts also provide for the payment of fees based on investment performance. Because most contracts provide for a fee based on market value of securities, fluctuations in securities prices may have a material adverse effect on our results of operations and financial condition. OUR INVESTMENT MANAGEMENT BUSINESS IS HIGHLY REGULATED. Our investment management business is highly regulated, primarily at the federal level. The failure of any of our subsidiaries that provide investment management services to comply with applicable laws or regulations could result in fines, suspensions of individual employees or other sanctions including revocation of such subsidiary's registration as an investment adviser. Specifically, four of our subsidiaries, Westfield Capital Management, Sand Hill Advisors, RINET Company and Boston Private Value Investors are registered investment advisers under the Investment Advisers Act of 1940. The Investment Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary record keeping, operational and disclosure obligations. These subsidiaries, as investment advisers, are also subject to regulation under the federal and state securities laws and the fiduciary laws of certain states. In addition, Westfield Capital Management acts as sub-adviser to a mutual fund which is registered under the Investment Company Act of 1940 and is subject to that act's provisions and regulations. Our investment management subsidiaries are also subject to the provisions and regulations of ERISA to the extent they act as a "fiduciary" under ERISA with respect to certain of our clients. ERISA and the applicable provisions of the federal tax laws, impose a number of duties on persons who are fiduciaries under ERISA and prohibit certain transactions involving the assets of each ERISA plan which is our client, as well as certain transactions by the fiduciaries (and certain other related parties) to such plans. In addition, applicable law provides that all investment contracts with mutual fund clients may be terminated by the clients, without penalty, under no more than 60 days notice. Investment contracts with institutional and other clients are typically terminable by the client, also without penalty, upon 30 days notice. We ourselves do not manage investments for clients, do not provide any investment management services and, therefore, are not a registered investment adviser. Boston Private Bank & Trust Company has an investment management department. However, it is exempt from the regulatory requirements of 9 the Investment Advisers Act, but is subject to extensive regulation by the FDIC and the Commissioner of Banks of the Commonwealth of Massachusetts. OUR BANKING BUSINESS IS HIGHLY REGULATED. Bank holding companies and state chartered banks operate in a highly regulated environment and are subject to supervision and examination by federal and state regulatory agencies. We are subject to the Bank Holding Company Act, and to regulation and supervision by the Federal Reserve Board. Boston Private Bank & Trust Company, as a Massachusetts chartered trust company, the deposits of which are insured by the FDIC, is subject to regulation and supervision by the Massachusetts Commissioner of Banks and the FDIC. Federal and state laws and regulations govern numerous matters including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible non-banking activities, the level of reserves against deposits and restrictions on dividend payments. The FDIC and the Massachusetts Commissioner of Banks possess cease and desist powers to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the Federal Reserve Board possesses similar powers with respect to bank holding companies. These and other restrictions limit the manner in which we and Boston Private Bank & Trust Company may conduct business and obtain financing. Furthermore, our banking business is affected not only by general economic conditions, but also by the monetary policies of the Federal Reserve Board. Changes in monetary or legislative policies may affect the interest rates Boston Private Bank & Trust Company must offer to attract deposits and the interest rates it must charge on its loans, as well as the manner in which it offers deposits and makes loans. These monetary policies have had, and are expected to continue to have, significant effects on the operating results of depository institutions generally, including Boston Private Bank & Trust Company. THE COMBINED COMPANY MAY NOT BE ABLE TO SUSTAIN THE RAPID GROWTH EXPERIENCED IN THE PAST BY US AND BOREL BANK. Both we and Borel Bank have recently experienced a period of rapid growth. While we have grown through a combination of internal expansion and new acquisitions, Borel Bank has grown primarily through internal expansion. After the merger, we may not be able to effectively manage newly acquired businesses and newly acquired businesses may not perform as expected. Our ability to manage our growth to date, as well as our ability to manage any future expansion, will require us to successfully combine the structure of our new acquisitions, particularly Borel Bank's, with our existing management and operational structure. There is a risk that we will be unable to maintain our historical rate of growth in the future. Past growth experienced by us or Borel Bank may not be indicative of the growth of the combined company in the future. TO THE EXTENT THAT WE ACQUIRE OTHER COMPANIES IN THE FUTURE, OUR BUSINESS MAY BE NEGATIVELY IMPACTED BY RISKS INHERENT WITH SUCH ACQUISITIONS. We have in the past considered, will in the future continue to consider, the acquisition of other banking and investment management companies. To the extent that we acquire other companies in the future, our business may be negatively impacted by certain risks inherent with such acquisitions. These risks include the following: - the risk that we will incur substantial expenses in pursuing potential acquisitions without completing such acquisitions, 10 - the risk that the acquired business will not perform in accordance with management's expectations, - the risk that difficulties will arise in connection with the integration of the operations of the acquired business with the operations of our banking or investment management businesses, - the risk that management will divert its attention from other aspects of our business, - the risk that we may lose key employees of the acquired business, - the risks associated with entering into geographic and product markets in which we have limited or no direct prior experience, and - the risks of the acquired company which we will assume as a result of the merger. SUBSTANTIAL FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET MAY NEGATIVELY AFFECT THE MARKET VALUE OF OUR COMMON STOCK AND COULD IMPACT OUR ABILITY TO OBTAIN ADDITIONAL EQUITY FINANCING. The sale of a substantial number of shares of our common stock into the public market, or the availability of these shares for future sale, could adversely affect the market price for our common stock and could impact our ability to obtain additional capital in the future through an offering of equity securities should we desire to do so. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation: - statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and - other statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or financial condition, or state other forward-looking information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we described in our forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors, including those factors described in the "Risk Factors" section of this prospectus. Readers should not place undue reliance on our forward-looking statements. Before you invest in our common stock, you should be aware that the occurrence of the events described in the "Risk Factors" section and elsewhere in this prospectus and our other public filings incorporated by reference into this prospectus could harm our business, prospects, operating results and financial condition. We do not undertake or intend to update any forward-looking statements after the date of this prospectus. 11 BOSTON PRIVATE We are a Massachusetts corporation and a registered bank holding company under the Bank Holding Company Act of 1956. We are the parent holding company of Boston Private Bank & Trust Company, a wholly-owned bank subsidiary. Boston Private Bank & Trust Company is a trust company chartered in Massachusetts, the deposits of which are insured by the Federal Deposit Insurance Corporation. We conduct substantially all of our business through our wholly-owned subsidiaries, Boston Private Bank & Trust Company, Westfield Capital Management, RINET Company, Sand Hill Advisors and Boston Private Value Investors. Westfield Capital Management is located at One Financial Center in Boston, Massachusetts, Sand Hill Advisors is located at 3000 Sand Hill Road, Menlo Park, California, Boston Private Value Investors is located at 46 South Main Street, Concord, New Hampshire, RINET Company is located at 10 Post Office Square, Boston, Massachusetts, and Boston Private Bank & Trust Company and our principal offices are located at Ten Post Office Square, Boston, Massachusetts. Boston Private Bank & Trust Company also has banking offices located in Cambridge, Massachusetts, Wellesley, Massachusetts, and in the Back Bay area of Boston, Massachusetts. Through Boston Private Bank & Trust Company, we pursue a "private banking" business strategy and are principally engaged in providing banking, investment and fiduciary products to high net worth individuals, their families and their businesses in the greater Boston area and New England and, to a lesser extent, Europe and Latin America. Boston Private Bank & Trust Company offers its clients a broad range of basic deposit services, including checking and savings accounts, with automated teller machine access, and cash management services. Boston Private Bank & Trust Company also offers commercial, residential mortgage, home equity and consumer loans. In addition, Boston Private Bank & Trust Company provides investment advisory and asset management services, securities custody and safekeeping services, and trust and estate administration. Through Westfield Capital Management, we serve the investment needs of high net worth individuals, endowments, foundations and retirement plans. Westfield Capital Management invests primarily in equities of companies which it expects to grow at above normal rates, and although Westfield Capital Management is not limited to such investments, it has a particular focus on companies deemed to have small to mid-sized capitalizations. In addition, Westfield Capital Management acts as the managing general partner or investment manager of three limited partnerships, one of which invests primarily in technology stocks and the other two of which invest primarily in equities of growth companies. Through RINET Company, we engage in financial planning, tax planning and investment management services to high net worth individuals and their families in the greater Boston area, New England and other areas of the U.S. Services we offer through RINET Company include tax planning and preparation, asset allocation, estate planning, charitable planning, planning for employment benefits, including 401(k) plans, alternative investment analysis and mutual fund investing. Through Sand Hill Advisors, we provide investment management services to high net worth individuals primarily in Silicon Valley and Northern California. Sand Hill Advisors specializes in balanced portfolios with an equity discipline, and also uses its expertise to plan and execute diversification programs for concentrated stock positions. Through Boston Private Value Investors, we provide investment management services to high net worth individuals and their families, endowments, municipalities, corporations and other institutions. Our professionals at Boston Private Value Investors take a "value-style" approach to investment management and work closely with clients on goal setting and asset diversification. On June 27, 2001, Boston Private and Borel Bank signed an agreement and plan of reorganization, which provides for the merger of Borel Bank with Boston Private. Borel Bank will be a wholly-owned 12 subsidiary of Boston Private if the proposed merger is completed. Based in San Mateo, California, Borel Bank provides a variety of commercial banking and fiduciary services. INVESTMENT MANAGEMENT We provide a range of investment management services to individuals, family groups, trusts, endowments and foundations, retirement plans and investment partnerships. These services include the management of equity, fixed income, balanced and strategic cash management portfolios. Portfolios are managed based on the investment objectives of each client, and each portfolio is positioned to benefit from long-term market trends. TRUST ADMINISTRATION Acting as a fiduciary, we provide trust administration and estate settlement services. The services we provide include the ongoing fiduciary review of trust instruments, the collection and safekeeping of assets, the investment of trust assets, the distribution of income, the preparation of reports for court and tax purposes, the preparation of tax returns, the distribution of assets as required and communication with grantors, beneficiaries and co-trustees. CUSTODIAN SERVICES We provide custodian services, including the safekeeping of securities, the settlement of securities transactions, the execution of trades and the automatic investment of cash balances. LENDING ACTIVITIES Through Boston Private Bank & Trust Company, we specialize in lending to individuals and small corporations, partnerships, associations and non-profit organizations. Loans made by Boston Private Bank & Trust Company to individuals include residential mortgage loans, unsecured and secured personal lines of credit, home equity loans, mortgage loans on investment and vacation properties and overdraft protection. Loans to businesses include commercial construction and mortgage loans, revolving lines of credit, working capital loans, equipment financing and letters of credit. Generally, we lend only to borrowers located in eastern New England or to borrowers who may be located farther away, but who have collateral deposited with us in the form of cash or marketable securities or other collateral within our market area. ASSET AND LIABILITY MANAGEMENT Generally, our objective with respect to asset and liability management is to maximize profit potential while minimizing the vulnerability of our operations to changes in interest rates by means of managing the ratio of interest rate sensitive assets to interest rate sensitive liabilities within specified maturities or repricing dates. Our actions in this regard are taken under the guidance of an asset and liability management committee which is comprised of members of senior management. This committee is involved in formulating the economic assumptions that we use in our financial planning and budgeting process and establishes policies which control and monitor the sources, uses and pricing of funds. INVESTMENT ACTIVITIES Our investment activities are an integral part of our overall asset/liability management. Our banking investment policy is to establish a portfolio which will provide liquidity necessary to facilitate funding of loans and to cover deposit fluctuations while at the same time achieving a satisfactory return on the funds invested. The securities in which we may invest are subject to regulation and limited to securities which are considered "investment grade" securities. 13 SOURCES OF FUNDS Deposits made at Boston Private Bank & Trust Company's office location and through ATMs provide a major source of funds for use in lending and for other general business purposes. In addition, Boston Private Bank & Trust Company also relies on borrowings as a source of funds for its operations. As a result, Boston Private Bank & Trust Company has established various borrowing arrangements, including Federal Home Loan Bank of Boston advances, the sale of securities to institutional investors under repurchase agreements and, from time to time, the purchase of federal funds from other banking institutions. LEGAL PROCEEDINGS On June 7, 2000, one of our subsidiaries received correspondence on behalf of one of its former clients claiming that the subsidiary is responsible for underperformance of allegedly $5.1 million when compared to the former client's performance targets. On or about January 11, 2001, our subsidiary received notice of a court document filed in Pennsylvania state court on behalf of the client stating that an action has been commenced against our subsidiary, but containing no allegations. We intend to defend this matter vigorously. We also incorporate by reference all of the discussions concerning legal proceedings included in our Registration Statement on Form S-4 originally filed with the SEC on August 16, 2001 (SEC File No. 333-67746), as amended through the date hereof. PRO FORMA COMBINED FINANCIAL STATEMENTS AND HISTORICAL FINANCIAL STATEMENTS OF BOREL BANK We incorporate by reference the pro forma combined financial statements giving effect to the merger of Boston Private and Borel Bank and the historical financial statements of Borel Bank, included in our Registration Statement on Form S-4 originally filed with the SEC on August 16, 2001 (SEC File No. 333-67746), as amended through the date hereof. USE OF PROCEEDS We will not receive any proceeds from the sale of the shares of our common stock by the selling stockholders. REGISTRATION RIGHTS The registration of the shares being sold in this offering will discharge all of our obligations to register shares upon demand for resale under the terms of a registration rights agreement with the former shareholders of E.R. Taylor Investments, Inc. Pursuant to registration rights agreements with the former stockholders of E.R. Taylor Investments and Kanon Bloch Carre, we have agreed to pay all expenses of registering the shares, including the legal fees of one legal counsel for the selling stockholders as a group. We also agreed to indemnify each selling stockholder and its officers, directors and other affiliated persons and any person who controls any selling stockholder against losses, claims, damages and expenses arising under the securities laws in connection with the registration statement or this prospectus, subject to certain limitations. In addition, each selling stockholder has severally agreed to indemnify us and our directors, officers and any person who controls us against all losses, claims, damages and expenses arising under the securities laws insofar as such losses, claims, damages or expenses relate to information furnished to us by such selling stockholder, or omission by such selling stockholder of a material fact, for use in the registration statement or this prospectus or any amendment or supplement thereto. 14 SELLING STOCKHOLDERS The following table sets forth the number of shares of common stock beneficially owned by the selling stockholders as of October 1, 2001, the number of shares of common stock covered by this prospectus and the total number of shares of common stock which the selling stockholders will beneficially own upon completion of this offering. This table assumes that the selling stockholders will sell all of the shares offered pursuant to this prospectus. The common stock offered by this prospectus may be offered from time to time by the selling stockholders named below, or by any of their pledgees, donees, transferees or other successors in interest. The amounts set forth below are based upon information provided to us by the selling stockholders as of October 1, 2001 and are accurate to the best of our knowledge. It is possible, however, that the selling stockholders may acquire or dispose of additional shares of common stock from time to time after the date of this prospectus.
SHARES OF SHARES OF COMMON STOCK COMMON STOCK SHARES OF OWNED AFTER THE OFFERING OWNED AS OF COMMON STOCK ------------------------- SELLING STOCKHOLDER OCTOBER 1, 2001(1) OFFERED HEREBY NUMBER PERCENT(2) ------------------- ------------------- -------------- ----------- ----------- Martha E. Cottrill (3).................... 33,017 5,000 28,017 * Salvatore J. Cozzolino (4)................ 24,012 5,988 18,024 * Kenneth G. DeWitt (5)..................... 33,017 8,233 24,784 * William M. Dougherty (6).................. 100,288 100,288(7) -- -- C. Michael Hazard (8)..................... 1,073,666 7,185(9) 1,066,481 6.5% John C.L. Hou (10)........................ 66,035 16,467 49,568 * Donald H. Putnam (11)..................... 2,521 629 1,892 * Richard P. Simmons (12)................... 24,012 5,988 18,024 * Sherwood T. Small (13).................... 364,395 68,000 296,463 1.8% John S. Tamagni (14)...................... 32,417 8,083 24,334 * Mary Pat Thornton (15).................... 1,500 375 1,125 * ------- TOTAL..................................... 226,236 =======
------------------------ * Less than 1%. (1) Includes options to purchase shares of common stock that are exercisable within 60 days of October 1, 2001. (2) Based on 16,542,143 outstanding shares of common stock as of October 1, 2001. Options to purchase shares of common stock that are exercisable within 60 days of October 1, 2001 are deemed outstanding for computing the ownership of each selling stockholder as a percentage of the total number of shares outstanding, but are not deemed outstanding for computing the percentage of any other person or group. (3) The address for Ms. Cottrill is c/o Boston Private Value Investors, Inc., 46 South Main Street, Concord, New Hampshire 03302-2090. (4) The address for Mr. Cozzolino is c/o Multi Line Equipment Co., Inc., 200 Fairfield Avenue, West Caldwell, New Jersey 07006. (5) The address for Mr. DeWitt is c/o Boston Private Value Investors, Inc., 46 South Main Street, Concord, New Hampshire 03302-2090. (6) The address for Mr. Dougherty is c/o RINET Company, Inc., 10 Post Office Square, Boston, Massachusetts 02109. 15 (7) Mr. Dougherty has agreed not to sell any shares of our common stock until we have publicly announced financial results containing thirty (30) days of combined results for Boston Private and Kanon Bloch Carre. As a result, we currently anticipate that Mr. Dougherty will not be permitted to sell the shares of our common stock registered under this registration statement on his behalf until we announce earnings for the year ended December 31, 2001 in mid-January 2002. (8) The address for Mr. Hazard is c/o Boston Private Financial Holdings, Inc., Ten Post Office Square, Boston, Massachusetts 02109. (9) Mr. Hazard has agreed not to sell any shares of our common stock until we have publicly announced financial results containing thirty (30) days of combined results for Boston Private and Kanon Bloch Carre as well as Boston Private and Borel Bank. Because the proposed merger with Borel Bank is pending as of the date of this prospectus and it is unknown when we will announce financial results containing thirty (30) days of combined results for Boston Private and Borel Bank, it is unclear at what date Mr. Hazard will be eligible to sell the shares of common stock registered under this registration statement on his behalf. (10) The address for Mr. Hou is 268 Long Hill Drive, Short Hills, New Jersey 07078. (11) The address for Mr. Putnam is c/o Putnam Lovell Group, Four Embarcadero Center, San Francisco, California 94111. (12) The address for Mr. Simmons is c/o Birchmere, Quaker Hollow Road, Sewickley, Pennsylvania 15143. (13) The address for Mr. Small is c/o Boston Private Value Investors, Inc., 46 South Main Street, Concord, New Hampshire 03302-2090. (14) The address for Mr. Tamagni is 124 Hobart Avenue, Summit, New Jersey 07901. (15) The address for Ms. Thornton is One Pierrepont Street, Brooklyn, New York 11201. 16 PLAN OF DISTRIBUTION The selling stockholders, or their pledgees, donees, transferees, or any of their successors in interest, may sell the securities from time to time on any stock exchange or automated interdealer quotation system on which the securities are listed, in the over-the-counter market, in privately negotiated transactions or otherwise, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at prices otherwise negotiated. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. The selling stockholders may sell the securities by one or more of the following methods, without limitation: - block trades in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction, - purchases by a broker or dealer as principal and resale by the broker or dealer for its own account pursuant to this prospectus, - an exchange distribution in accordance with the rules of any stock exchange on which the securities are listed, - ordinary brokerage transactions and transactions in which the broker solicits purchases, - privately negotiated transactions, - short sales, - through the writing of options on the securities, whether the options are listed on an options exchange, - through the distribution of the securities by any selling stockholder to its partners, members or stockholders, - one or more underwritten offerings on a firm commitment or best efforts basis, and - any combination of any of these methods of sale. The selling stockholders may also transfer the securities by gift. We do not know of any arrangements by the selling stockholders for the sale of any of the securities. The selling stockholders may engage brokers and dealers, and any brokers or dealers may arrange for other brokers or dealers to participate in effecting sales of the securities. These brokers, dealers or underwriters may act as principals, or as an agent of a selling stockholder. Broker-dealers may agree with a selling stockholder to sell a specified number of the securities at a stipulated price per security. If the broker-dealer is unable to sell securities acting as agent for a selling stockholder, it may purchase as principal any unsold securities at the stipulated price. Broker-dealers who acquire securities as principals may thereafter resell the securities from time to time in transactions in any stock exchange or automated interdealer quotation system on which the securities are then listed, at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions. Broker-dealers may use block transactions and sales to and through broker-dealers, including transactions of the nature described above. The selling stockholders may also sell the securities in accordance with Rule 144 under the Securities Act, rather than pursuant to this prospectus, regardless of whether the securities are covered by this prospectus. From time to time, one or more of the selling stockholders may pledge, hypothecate or grant a security interest in some or all of the securities owned by them. The pledgees, secured parties or persons to whom the securities have been hypothecated will, upon foreclosure in the event of default, be deemed to be selling stockholders. The number of selling stockholder's securities offered under this prospectus will decrease as and when it takes such actions. The plan of distribution for that selling 17 stockholder's securities will otherwise remain unchanged. In addition, a selling stockholder may, from time to time, sell the securities short, and, in those instances, this prospectus may be delivered in connection with the short sales and the securities offered under this prospectus may be used to cover short sales. To the extent required under the Securities Act of 1933, the aggregate amount of selling stockholders' securities being offered and the terms of the offering, the names of any agents, brokers, dealers or underwriters and any applicable commission with respect to a particular offer will be set forth in an accompanying prospectus supplement. Any underwriters, dealers, brokers or agents participating in the distribution of the securities may receive compensation in the form of underwriting discounts, concessions, commissions or fees from a selling stockholder and/or purchasers of selling stockholders' securities, for whom they may act (which compensation as to a particular broker-dealer might be in excess of customary commissions). The selling stockholders and any underwriters, brokers, dealers or agents that participate in the distribution of the securities may be deemed to be "underwriters" within the meaning of the Securities Act, and any discounts, concessions, commissions or fees received by them and any profit on the resale of the securities sold by them may be deemed to be underwriting discounts and commissions. A selling stockholder may enter into hedging transactions with broker-dealers and the broker-dealers may engage in short sales of the securities in the course of hedging the positions they assume with that selling stockholder, including, without limitation, in connection with distributions of the securities by those broker-dealers. A selling stockholder may enter into option or other transactions with broker-dealers that involve the delivery of the securities offered hereby to the broker-dealers, who may then resell or otherwise transfer those securities. A selling stockholder may also loan or pledge the securities offered hereby to a broker-dealer and the broker-dealer may sell the securities offered hereby so loaned or upon a default may sell or otherwise transfer the pledged securities offered hereby. The selling stockholders and other persons participating in the sale or distribution of the securities will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including Regulation M. This regulation may limit the timing of purchases and sales of any of the securities by the selling stockholders and any other person. The anti-manipulation rules under the Exchange Act may apply to sales of securities in the market and to the activities of the selling stockholders and their affiliates. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of the securities to engage in market-making activities with respect to the particular securities being distributed for a period of up to five year business days before the distribution. These restrictions may affect the marketability of the securities and the ability of any person or entity to engage in market-making activities with respect to the securities. We have agreed to indemnify in certain circumstances the selling stockholders and any brokers, dealers and agents who may be deemed to be underwriters, if any, of the securities covered by the registration statement, against certain liabilities, including liabilities under the Securities Act. The selling stockholders have agreed to indemnify us in certain circumstances against certain liabilities, including liabilities under the Securities Act. The securities offered hereby were originally issued to the selling stockholders pursuant to an exemption from the registration requirements of the Securities Act. We agreed to register the securities under the Securities Act, and to keep the registration statement of which this prospectus is a part effective until the earlier of the date on which the selling stockholders may sell the securities without registration under the Securities Act or 180 days after the effective date of the registration statement. We have agreed to pay all expenses in connection with this offering, including the fees and expenses of counsel or other advisors to the selling stockholders, but not including underwriting discounts, concessions, commissions or fees of the selling stockholders or any fees and expenses of counsel or other advisors to the selling stockholders. 18 We will not receive any proceeds from sales of any securities by the selling stockholders. We cannot assure you that the selling stockholders will sell all or any of the securities offered for sale under this prospectus. AVAILABLE INFORMATION We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and we are required to file reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports or other information we file at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also request copies of our filings at the prescribed duplication rates by writing to the Commission's Public Reference Room. You may obtain information regarding the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission also maintains an Internet site at http://www.sec.gov containing reports, proxy and information statements and other information regarding registrants, including Boston Private, that are filed electronically with the Commission. Reports, proxy statements and other information concerning Boston Private may also be inspected at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE This prospectus is part of a registration statement that we filed with the SEC to register the common stock offered in this offering. It does not repeat important information that you can find in the registration statement or in the reports and other documents that we file with the SEC. The SEC allows us to incorporate by reference information that we file with them. Incorporation by reference means that we can disclose important information to you by referring you to other documents that are legally considered to be part of this prospectus or any prospectus supplement. Information that we later file with the SEC will automatically update and supersede the information in this prospectus, any prospectus supplement and the documents listed below. The following documents previously filed by us with the SEC are incorporated in, and made a part of, this prospectus by reference as of their respective dates: - our Annual Report on Form 10-K for the fiscal year ended December 31, 2000, - our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, - our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, and - the description of the common stock contained in our registration statement on Form SB-2 filed on August 30, 1993, including all amendments and reports updating such description. All future filings we make with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the sale of all of the shares of common stock offered pursuant to this prospectus shall be deemed to be incorporated by reference in this prospectus and shall be a part of this prospectus from the date of filing of such document. In addition, we also incorporate by reference the financial statements for Boston Private and Borel Bank, including the unaudited pro forma combined financial statements provided therein, incorporated by reference or set forth in our Registration Statement on Form S-4 originally filed with the SEC on August 16, 2001 (SEC File No. 333-67746), as amended through the date hereof. We have not authorized any person to give any information or to make any representation not contained or incorporated by reference in this prospectus or, if applicable, any accompanying 19 prospectus supplement and, if given or made, such information or representation must not be relied upon as having been authorized by us or any underwriter, dealer or agent. You may request a copy of any or all of the documents that have been incorporated by reference in this prospectus except exhibits to such documents, at no cost, by writing or telephoning us at the following address and telephone number: Boston Private Financial Holdings, Inc., Ten Post Office Square, Boston, Massachusetts 02109, (617) 912-1900, Attention: Secretary. EXPERTS The consolidated financial statements of Boston Private and subsidiaries as of December 31, 2000 and 1999, and for each of the years in the three-year period ended December 31, 2000, incorporated by reference in this prospectus and this registration statement have been audited by KPMG LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference herein upon the authority of said firm as experts in giving said reports. The consolidated financial statements of Borel Bank & Trust Company as of December 31, 2000 and 1999, and for each of the years in the three-year period ended December 31, 2000, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. LEGAL MATTERS The validity of the issuance of the shares offered hereby will be passed upon for us by our counsel, Goodwin Procter LLP, Boston, Massachusetts. 20 BOSTON PRIVATE FINANCIAL HOLDINGS, INC. 226,236 SHARES COMMON STOCK --------------------- PROSPECTUS --------------------- , 2001 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following is an estimate of the approximate amount of the fees and expenses (other than underwriting commissions and discounts) anticipated to be paid by Boston Private in connection with the issuance and distribution of the Securities. SEC Registration Fee........................................ $ 1,063 Legal Fees and Expenses..................................... 20,000 Blue Sky Qualification Fees and Expenses.................... 2,000 Miscellaneous............................................... 937 ---------- Total................................................... $ 24,000 ==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. INDEMNIFICATION The Massachusetts Business Corporation Law (the "MBCL") permits, and our articles provide for, indemnification of directors, officers, employees and agents and any person who serves at our request as a director, officer, employee or agent of another entity for all expenses and liabilities incurred by them in connection with any proceeding in which they may become involved by reason of serving or having served as directors or officers. Indemnification is denied, however, if the person is found not to have acted in good faith in the reasonable belief that his or her action was in our best interest. Additionally, indemnification for compromise payments and any advances of expenses shall only be made if approved by (1) a majority of disinterested directors or, if there are less than two disinterested directors, by a majority of the directors provided they have obtained a legal opinion that the director or officer acted in good faith in the reasonable belief that his action was in the best interests of the corporation, (2) holders of a majority of the shares of stock, or (3) by a court of competent jurisdiction. The MBCL and our articles permit us to purchase and maintain insurance on behalf of any person who is or was our director, officer, employee or agent against any liability incurred by that person in any capacity, or arising out of that person's status as such, whether or not we would have the power to indemnify that person against such liability. The MBCL does not explicitly address indemnifying persons against judgments in actions brought by or in the right of corporation. The previously discussed standard applies to these cases. LIMITATION OF LIABILITY Our articles provide that directors shall not be personally liable to us or our shareholders for monetary damages for breaching their fiduciary duties except to the extent that such liability is imposed by applicable law: - for any breach of the director's duty of loyalty; - for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; - for the amount of any illegal distributions which are not repaid or the amount of any loans made to directors that are not repaid or ratified by a majority of disinterested directors or shares; and - for any transaction from which the director derived an improper personal benefit. II-1 ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION --------------------- ------------------------------------------------------------ *4.1........ Registration Rights Agreement dated as of February 28, 2001 by and between Boston Private Financial Holdings, Inc. and the stockholders named therein. *4.2........ Registration Rights Agreement dated as of October 1, 2001 by and between Boston Private Financial Holdings, Inc. and the stockholders named therein. *5.1........ Opinion of Goodwin Procter LLP *23.1........ Consent of KPMG LLP *23.2........ Consent of KPMG LLP 23.3........ Consent of Goodwin Procter LLP (included in Exhibit 5.1) 24.1........ Power of Attorney (included on signature page)
------------------------ * Included herewith ITEM 17. UNDERTAKINGS. A. The undersigned Registrant hereby undertakes to: 1. File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: (i) Include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) Reflect in the prospectus any facts or events which, individually or in the aggregate, represent a fundamental change in the information 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 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) Include any additional or changed material information with respect to the plan of distribution; PROVIDED, HOWEVER, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the undersigned Registrant under the Exchange Act. 2. For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement relating to the securities offered, and the offering of the securities at that time to be the initial BONA FIDE offering thereof. 3. File a post-effective amendment to remove from registration any of the securities that remain unsold at the termination of the offering. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is II-2 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 of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, 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 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-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, the Commonwealth of Massachusetts, on November 6, 2001. BOSTON PRIVATE FINANCIAL HOLDINGS, INC. By: /s/ TIMOTHY L. VAILL ----------------------------------------- Timothy L. Vaill CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors of Boston Private Financial Holdings, Inc., hereby severally constitute Timothy L. Vaill and Walter M. Pressey and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below and in such other capacities as the undersigned may from time to time serve in the future, the registration statement filed herewith and any and all amendments to said registration statement, and generally to do all such things in our names and in our capacities as officers and directors to enable Boston Private Financial Holdings, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ TIMOTHY L. VAILL ------------------------------------------- Director, Chairman and November 6, 2001 Timothy L. Vaill Chief Executive Officer Director, President and /s/ WALTER M. PRESSEY Chief Financial Officer ------------------------------------------- (Principal Accounting November 6, 2001 Walter M. Pressey Officer) /s/ HERBERT S. ALEXANDER ------------------------------------------- Director November 6, 2001 Herbert S. Alexander /s/ PETER C. BENNETT ------------------------------------------- Director November 6, 2001 Peter C. Bennett /s/ ARTHUR J. BAUERNFEIND ------------------------------------------- Director November 6, 2001 Arthur J. Bauernfeind
II-4
SIGNATURE TITLE DATE --------- ----- ---- /s/ EUGENE S. COLANGELO ------------------------------------------- Director November 6, 2001 Eugene S. Colangelo /s/ C. MICHAEL HAZARD ------------------------------------------- Director November 6, 2001 C. Michael Hazard /s/ LYNN THOMPSON HOFFMAN ------------------------------------------- Director November 6, 2001 Lynn Thompson Hoffman /s/ ALLEN SINAI ------------------------------------------- Director November 6, 2001 Allen Sinai /s/ RICHARD N. THIELEN ------------------------------------------- Director November 6, 2001 Richard N. Thielen /s/ CHARLES O. WOOD III ------------------------------------------- Director November 6, 2001 Charles O. Wood III
II-5 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION --------------------- ------------------------------------------------------------ *4.1........ Registration Rights Agreement dated as of February 28, 2001 by and between Boston Private Financial Holdings, Inc. and the stockholders named therein. *4.2........ Registration Rights Agreement dated as of October 1, 2001 by and between Boston Private Financial Holdings, Inc. and the stockholder named therein. *5.1........ Opinion of Goodwin Procter LLP *23.1........ Consent of KPMG LLP *23.2........ Consent of KPMG LLP 23.3........ Consent of Goodwin Procter LLP (included in Exhibit 5.1) 24.1........ Power of Attorney (included on signature page)
------------------------ * Included herewith EX-4.1 3 a2062424zex-4_1.txt EXHIBIT 4.1 EXHIBIT 4.1 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of the ___ day of February, 2001, by and among Boston Private Financial Holdings, Inc., a Massachusetts corporation (the "Company"), and the persons designated as Holders on the signature pages hereto and any assignees or transferees thereof who become Holders in accordance with Section 9 hereof (each, an "Holder" and collectively, the "Holders"). WHEREAS, the Company and certain parties including the Holders have entered into a certain Merger Agreement, dated as of January 5, 2001 (the "Merger Agreement"), pursuant to which the Holders will indirectly receive shares of Common Stock, par value $.01 per share, of the Company (the "Common Stock") in connection with the closing of the transactions contemplated thereby; and WHEREAS, the execution of this Agreement is an inducement and a condition to the consummation by the Holders of the transactions contemplated by the Merger Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual promises of the parties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Holders hereby covenant and agree with each other as follows: 1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the following respective meanings: "BOARD" means the Board of Directors of the Company. "COMMISSION" shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act and the Exchange Act. "COMMON STOCK" shall mean the Common Stock and any other common equity securities issued by the Company, and any other shares of stock issued or issuable with respect thereto (whether by way of a stock dividend or stock split or in exchange for or upon conversion of such shares, recapitalization, merger, consideration or other corporate reorganization). "COMPANY" shall refer to the Company and any successor or successors thereto. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "MAJORITY INTEREST" means the Holders holding not less than a majority of the Registrable Securities held by all Holders. "PERSON" shall mean an individual, a corporation, an association, a joint venture, a partnership, a limited liability company, an estate, a trust, an unincorporated organization, and any other entity or organization, governmental or otherwise. "REGISTRABLE SECURITIES" shall mean (i) any shares of Common Stock received by the Holders or their transferees in connection with the transactions contemplated by the Merger Agreement and (ii) any other securities issued or issuable with respect to any such shares described in clause (i) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization; PROVIDED, HOWEVER, that notwithstanding anything to the contrary contained herein, "Registrable Securities" shall not at any time include any securities (i) theretofore registered and sold pursuant to the Securities Act, (ii) theretofore sold to the public pursuant to Rule 144 promulgated under the Securities Act or (iii) which could then be sold in their entirety pursuant to Rule 144(k) promulgated under the Securities Act without limitation or restriction. "REGISTRATION EXPENSES" shall mean the expenses so described in Section 5 hereof. "SECURITIES ACT" shall mean the Securities Act of 1933 or any similar successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 2. DEMAND REGISTRATION. (a) The Company shall use its commercially reasonable efforts to qualify and remain qualified to register securities on Form S-3 (or any successor form) under the Securities Act. At any time after [________ [DATE SIX MONTHS AFTER THE CLOSING]] and prior to [________ [DATE ONE YEAR AFTER THE CLOSING]] in the event (i) the Company does not complete a Piggy-Back Registration (as defined in Section 3 hereof) by [________[DATE SIX MONTHS AFTER THE CLOSING]] or (ii) the Company does complete a Piggy-Back Registration (as defined in Section 3 hereof) by [________[DATE SIX MONTHS AFTER THE CLOSING]], but the Holders are cutback in the number of Registrable Securities they may register pursuant to Section 3 hereof or are not permitted to participate in such registration due to limitations related to the pooling of interests accounting treatment of the Merger (as defined in the Merger Agreement), at least two (2) Holders may notify the Company that they intend to offer or cause to be offered for public sale, and request that the Company register under the Securities Act for public sale, at least 75,000 shares of Registrable Securities held by the Holders (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations or other similar changes in the Registrable Securities) and up to twenty percent (20%) of the Registrable Securities held by the Holders in the manner specified in such notice. Upon receipt of such request, the Company shall promptly deliver notice of such request to all Holders of Registrable Securities who shall then have thirty (30) days to notify the Company in writing of their desire to have up to twenty percent (20%) of the Registrable Securities held by them included in such registration. In the event any Holders elect to have less than twenty percent (20%) of the Registrable Securities held by them included in such registration, the remaining Holders shall have the election to have additional Registrable Securities included in such registration on a pro rata basis based on their respective holdings of Registrable Securities in an aggregate number equal to the number of Registrable Securities that such Holders have elected in the aggregate not to have included in such registration; provided, however, that the Company shall not under any circumstances be required to register in the aggregate more than twenty percent (20%) of the number of Registrable Securities. The Company shall make a reasonable effort to contact each remaining Holder and solicit such Holder's interest in having additional Registrable Securities included in such registration in accordance with the preceding sentence. If the request for registration contemplates an underwritten public offering, the Company shall state such in the written notice and in such event the right of any Holder to include Registrable Securities in such registration shall be conditioned upon such Holder's participation in such underwritten public offering and the inclusion of such Holder's Registrable Securities in the underwritten public offering to the extent provided herein. The Company will use its commercially reasonable efforts to expeditiously effect the registration under the Securities Act of all Registrable Securities requested for inclusion in such registration in accordance with the terms hereof and to qualify such Registrable Securities for sale under any state blue sky law; PROVIDED, HOWEVER, that the Company shall not be required to effect a registration pursuant to a request under this Section 2 more than one (1) time. Notwithstanding anything to the contrary contained herein, no request may be made under this Section 2 within sixty (60) days after the effective date of a registration statement filed by the Company covering a firm commitment underwritten public offering. The Company may postpone the filing or the effectiveness of any registration statement required to be filed pursuant to this Section 2 for a reasonable time period, provided that such postponements shall not exceed sixty (60) days in the aggregate, if the Company has been advised by legal counsel that such filing or effectiveness would require disclosure of a material financing, acquisition or other corporate transaction, and the Board determines in good faith that such disclosure is not in the best interests of the Company and its stockholders. A registration will not count as a requested registration under this Section 2(a) unless and until the registration statement relating to such registration has been declared effective by the Commission at the request of the initiating holders; PROVIDED, HOWEVER, that a majority of the participating Holders of Registrable Securities may request, in writing, that the Company withdraw a registration statement which has been filed under this Section 2(a) but not yet been declared effective, and such Holders may thereafter request the Company to reinstate such Registration Statement, if permitted under the Securities Act, or to file another registration statement, in accordance with the procedures set forth herein and without reduction in the number of demand registrations permitted under this Section 2(a) if the participating holders reimburse the Company for all Registration Expenses incurred in connection with such withdrawn registration. (b) If a requested registration involves an underwritten public offering and the managing underwriter of such offering determines in good faith that the number of securities sought to be offered should be limited due to market conditions, then the number of securities to be included in such underwritten public offering shall be reduced to a number, reasonably deemed satisfactory by such managing underwriter, PROVIDED that the securities to be excluded shall be determined in the following sequence: (i) first, securities held by any Persons (other than Persons holding Registrable Securities) not having any contractual incidental or "piggyback" registration rights or securities held by any other Persons (other than Persons holding Registrable Securities) having contractual incidental or "piggyback" registration rights subordinate in priority to the registrations rights granted to the Holders hereunder, (ii) second, securities sought to be registered by the Company, (iii) third, Registrable Securities of holders who are not Holders, (iv) fourth, Registrable Securities held by the Holders or securities held by other Persons having contractual incidental or "piggyback" registration rights equal in priority to the registrations rights granted to the Holders hereunder and (v) fifth, securities held by any other Persons (other than Persons holding Registrable Securities) having contractual incidental or "piggyback" registration rights superior in priority to the registrations rights granted to the Holders hereunder. If there is a reduction in the number of shares of Common Stock or Registrable Securities to be registered pursuant to clause (i), (ii), (iii), (iv) or (v) above, such reduction shall be made within each tranche on a pro rata basis (based upon the aggregate number of shares of Common Stock or Registrable Securities held by the holders in each such tranche and subject to the priorities set forth in the preceding sentence). (c) With respect to a request for registration pursuant to Section 2(a) which is for an underwritten public offering, the managing underwriter shall be chosen by the Holders holding not less than a majority of the Registrable Securities to be included in such registration, subject to the Company's consent, which consent shall not be unreasonably withheld. The Company may not cause any other registration of securities for sale for its own account (other than a registration effected solely to implement an employee benefit plan on Form S-8 or a transaction to which Rule 145 of the Securities Act is applicable) to become effective within one hundred eighty (180) days following the effective date of any registration required pursuant to this Section 2. 3. PIGGYBACK REGISTRATION. If the Company at any time proposes to register any of its Common Stock under the Securities Act for sale to the public (except pursuant to a demand by the Holders under Section 2 hereof, which demand registration shall be governed by the terms of said Section 2, and except with respect to any registration statement on Form S-4, S-8 or any other form not available for registering the Registrable Securities for sale to the public) (a "Piggy-Back Registration"), each such time it will promptly give written notice to each holder of Registrable Securities of its intention to effect such registration. Upon the written request of any such holder of Registrable Securities given within thirty (30) days after receipt by such holder of such notice, the Company will, subject to the limits contained in this Section 3, use its commercially reasonable efforts to cause up to twenty percent (20%) of the Registrable Securities of such holder that such holder so requests to be registered under the Securities Act and qualified for sale under any state blue sky law, all to the extent required to permit such sale or other disposition of said Registrable Securities; PROVIDED, HOWEVER, that if the Company is advised in writing in good faith by the managing underwriter of the Company's securities being offered in an underwritten public offering pursuant to such registration statement that the amount to be sold by persons other than the Company (collectively, "Selling Stockholders") is greater than the amount which can be offered without adversely affecting the marketability of the offering, the Company may reduce the amount offered for the accounts of Selling Stockholders (including any holders of Registrable Securities) to a number reasonably deemed satisfactory by such managing underwriter; and PROVIDED, FURTHER, that the securities to be excluded shall be determined in the following sequence: (i) first, securities held by any Persons not having any contractual incidental or "piggy back" registration rights, (ii) second, securities held by any other Persons (other than Persons holding Registrable Securities) having contractual incidental or "piggyback" registration rights subordinate in priority to the registrations rights granted to the Holders hereunder, (iii) third, Registrable Securities held by the Holders or securities held by other Persons having contractual incidental or "piggyback" registration rights equal in priority to the registrations rights granted to the Holders hereunder and (iv) fourth, securities held by any other Persons (other than Persons holding Registrable Securities) having contractual incidental or "piggyback" registration rights superior in priority to the registrations rights granted to the Holders hereunder. If there is a reduction in the number of shares of Common Stock or Registrable Securities to be registered pursuant to clauses (i), (ii), (iii) or (iv) above, such reduction shall be made within each tranche on a pro rata basis (based upon the aggregate number of shares of Common Stock or Registrable Securities held by the holders in each such tranche and subject to the priorities set forth in the preceding sentence). 4. REGISTRATION PROCEDURES. If and whenever the Company is required by the provisions of this Agreement to effect the registration of any of its securities under the Securities Act, the Company will, as soon as practicable: (a) use its commercially reasonable efforts to prepare and file with the Commission a registration statement on the appropriate form under the Securities Act with respect to such securities, which form shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith, and use its commercially reasonable efforts to cause such registration statement to become and remain effective until completion of the proposed offering (but not for more than one hundred eighty (180) days); (b) use its commercially reasonable efforts to prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until the completion of the offering (but not for more than one hundred fifty (150) days) and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such registration statement whenever the seller or sellers of such securities shall desire to sell or otherwise dispose of the same, but only to the extent provided in this Agreement; (c) furnish to each selling holder and the underwriters, if any, such number of copies of such registration statement, any amendments thereto, any documents incorporated by reference therein, the prospectus, including a preliminary prospectus, all in conformity with the requirements of the Securities Act, and such other documents as such selling holder may reasonably request in order to facilitate the public sale or other disposition of the securities owned by such selling holder; (d) use its commercially reasonable efforts to register or qualify the securities covered by such registration statement under and to the extent required by such other securities or state blue sky laws of such jurisdictions as each selling holder shall reasonably request, and do any and all other acts and things which may be necessary under such securities or blue sky laws to enable such selling holder to consummate the public sale or other disposition in such jurisdictions of the securities owned by such selling holder, except that the Company shall not for any such purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified or submit to service of process in any jurisdiction in which it is not already subject; (e) within a reasonable time before each filing of the registration statement or prospectus or amendments or supplements thereto with the Commission, furnish to a single counsel selected by the holders of Registrable Securities proposing to include shares in such registration copies of such documents proposed to be filed, which information in such documents pertaining to such holders shall be subject to the reasonable approval of such counsel; (f) promptly notify each selling holder of Registrable Securities, such selling holders' counsel and any underwriter and (if requested by any such Person) confirm such notice in writing, of the happening of any event which makes any statement made in the registration statement or related prospectus untrue or which requires the making of any changes in such registration statement or prospectus so that they will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading; and, as promptly as practicable thereafter, prepare and file with the Commission and furnish a supplement or amendment to such prospectus so that, as thereafter deliverable to the purchasers of such Registrable Securities, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (g) use its commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a registration statement, and if one is issued use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement at the earliest possible moment; (h) if requested by the managing underwriter or underwriters (if any), any selling holder, or counsel to the selling holders, promptly incorporate in a prospectus supplement or post-effective amendment such information as such Person requests to be included therein with respect to the selling holder or the securities being sold, including, without limitation, with respect to the securities being sold by such selling holder to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and with respect to any other terms of an underwritten offering of the securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post-effective amendment; (i) make available to each selling holder, any underwriter participating in any disposition pursuant to a registration statement, and a single attorney and accountant retained by any such selling holders or underwriters (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such registration statement subject, in each case, to such confidentiality agreements as the Company shall reasonably request; (j) in connection with a registration statement pursuant to Section 2 above, enter into a reasonable underwriting agreement required by the proposed underwriter(s) (if approved by the Company) for the selling holders and use its commercially reasonable efforts to facilitate the public offering of the securities; (k) request that each prospective selling holder be furnished a signed counterpart, addressed to the prospective selling holder, of (i) an opinion of counsel for the Company, dated the effective date of the registration statement, and (ii) if and to the extent permitted by applicable professional standards, a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included in the registration statement, covering substantially the same matters with respect to the registration statement (and the prospectus included therein) and (in the case of the accountants' letter) with respect to events subsequent to the date of the financial statements, as are customarily covered (at the time of such registration) in opinions of the Company's counsel and in accountants' letters delivered to the underwriters in underwritten public offerings of securities; (l) use its commercially reasonable efforts to cause the securities covered by such registration statement to be listed on the securities exchange or quoted on the quotation system on which the Common Stock is then listed or quoted (or, if the Common Stock is not yet listed or quoted, then on such exchange or quotation system as the selling holders of Registrable Securities and the Company shall determine); (m) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission and make generally available to its security holders, in each case as soon as practicable, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement of the Company which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any comparable successor provisions); and (n) otherwise cooperate with the Holders, the underwriter(s), if any, the Commission and other regulatory agencies and take all reasonable actions and execute and deliver or cause to be executed and delivered all documents reasonably necessary to effect the registration of any securities under this Agreement. 5. EXPENSES. All reasonable expenses incurred by the Company and the Holders in effecting the registrations provided for in Section 2 and Section 3 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, fees and disbursements of one counsel for the Holders, underwriting expenses (other than fees, commissions or discounts of selling holders), expenses of any audits incident to or required by any such registration and expenses of complying with the securities or blue sky laws of any jurisdiction pursuant to Section 4(d) hereof (all of such expenses referred to as "Registration Expenses"), shall be paid by the Company. 6. INDEMNIFICATION. (a) The Company shall indemnify and hold harmless each selling holder of Registrable Securities, each underwriter (as defined in the Securities Act), and each other Person who participates in the offering of such securities and each other Person, if any, who controls (within the meaning of the Securities Act) such seller, underwriter or participating Person (individually and collectively, the "Indemnified Persons"), against any losses, claims, damages, liabilities and expenses (collectively, the "liability") to which such Indemnified Persons may become subject under the Securities Act or any other statute or at common law, insofar as such liability (or action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading. Except as otherwise provided in Section 6(d) hereof, the Company shall reimburse each such Indemnified Person in connection with investigating or defending any such liability as expenses in connection with the same are incurred; PROVIDED, HOWEVER, that the Company shall not be liable to any Indemnified Person in any such case to the extent that any such liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, preliminary or final prospectus, or amendment or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person specifically for use therein. (b) Each selling holder of any securities included in such registration being effected shall indemnify and hold harmless each other selling holder of any securities, the Company, its directors and officers, each underwriter and each other Person, if any, who controls any such selling holder, the Company or such underwriter (individually and collectively, the "Indemnified Persons"), against any liability, severally and not jointly, to which any such Indemnified Person may become subject under the Securities Act or any other statute or at common law, insofar as such liability (or actions in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which securities were registered under the Securities Act at the request of such selling holder, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission by such selling holder to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in the case of (i) and (ii) to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in such registration statement, preliminary or final prospectus, amendment or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by such selling holder specifically for use therein. Such selling holder shall reimburse any Indemnified Person for expenses (including, without limitation, legal fees) incurred in investigating or defending any such liability; PROVIDED, HOWEVER, that such selling holder's obligations hereunder shall be limited to an amount equal to the net proceeds received by such selling holder for the securities sold in any such registration. (c) Indemnification similar to that specified in Section 6(a) and Section 6(b) hereof shall be given by the Company and each selling holder (with such modifications as may be appropriate) with respect to any required registration or other qualification of their securities under any federal or state law or regulation of governmental authority other than the Securities Act. (d) If the indemnification provided for in this Section 6 for any reason is held by a court of competent jurisdiction to be unavailable to an Indemnified Person in respect of any losses, claims, damages, expenses or liabilities referred to therein, then each indemnifying party under this Section 6, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, expenses or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, the selling holders and the underwriters from the offering of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above, but also the relative fault of the Company, the other selling holders and the underwriters in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, the selling holders and the underwriters shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the selling holders and the underwriting discount received by the underwriters, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the Registrable Securities. The relative fault of the Company, the selling holders and the underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the selling holders or the underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct such statement or omission. The Company, the selling holders and the underwriters agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata or per capita allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. In no event, however, shall a selling holder be required to contribute any amount under this Section 6(d) in excess of the lesser of (i) that proportion of the total of such losses, claims, damages, liabilities or expenses indemnified against equal to the proportion of the total Registrable Securities sold under such registration statement which are being sold by such selling holder or (ii) the net proceeds received by such selling holder from its sale of Registrable Securities under such registration statement. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. 7. COMPLIANCE WITH RULE 144. The Company shall use its commercially reasonable efforts to take all action as may be required as a condition to the availability of Rule 144 under the Securities Act (or any comparable successor rules). The Company shall furnish to any holder of Registrable Securities upon request a written statement executed by the Company as to the steps it has taken to comply with the current public information requirement of Rule 144 (or such comparable successor rules). 8. AMENDMENTS. The provisions of this Agreement may be amended, and the Company may take any action herein prohibited or omit to perform any act herein required to be performed by it, only with the written consent of the Company and a Majority Interest. 9. TRANSFERABILITY OF REGISTRATION RIGHTS. The registration rights set forth in this Agreement are transferable to each transferee of at least 5,000 shares of Registrable Securities (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations or other similar changes in the Registrable Securities), which such transferees may include any trust, limited partnership or other estate planning vehicle, the primary beneficiaries or equity holders of which are the transferring holder and/or one or more of a spouse, parent, sibling, child or grandchild of such holder or any charitable trust or foundation. Each subsequent holder of Registrable Securities must consent in writing to be bound by the terms and conditions of this Agreement in order to acquire the rights granted pursuant to this Agreement. 10. RIGHTS WHICH MAY BE GRANTED TO SUBSEQUENT HOLDERS; PRIORITY OF REGISTRATION RIGHTS. Other than transferees of Registrable Securities under Section 9 hereof, the Company shall not, without the prior written consent of a Majority Interest, allow subsequent purchasers of the Company's securities to become a party to this Agreement or to receive registration rights superior to those of the Holders specified in Section 2 of this Agreement. The registration rights granted to the holders hereunder shall be subordinate to the registration rights granted pursuant to that certain Registration Rights Agreement dated as of August 31, 2000 by and among the Company and certain stockholders of the Company named therein. 11. DAMAGES. The Company recognizes and agrees that each holder of Registrable Securities will not have an adequate remedy if the Company fails to comply with the terms and provisions of this Agreement and that damages will not be readily ascertainable, and the Company expressly agrees that, in the event of such failure, it shall not oppose an application by any holder of Registrable Securities or any other Person entitled to the benefits of this Agreement requiring specific performance of any and all provisions hereof or enjoining the Company from continuing to commit any such breach of this Agreement. 12. MISCELLANEOUS. (a) All notices, requests, demands and other communications provided for hereunder shall be in writing and mailed (by first class registered or certified mail, postage prepaid), telegraphed, sent by express overnight courier service or electronic facsimile transmission (with a copy by mail), or delivered to the applicable party at the addresses indicated below: IF TO THE COMPANY: Boston Private Financial Holdings, Inc. Ten Post Office Square Boston, MA 02109 Facsimile: (617) 912-4551 Attention: Walter M. Pressey WITH A COPY TO: Goodwin, Procter & Hoar LLP Exchange Place Boston, MA 02109-2881 Facsimile: (617) 523-1231 Attention: William P. Mayer, Esq. Charles H. Sturdy, Esq. IF TO THE HOLDERS: c/o E.R. Taylor Investments, Inc. 46 South Main Street P.O. Box 2090 Concord, NH 03302-2090 Facsimile: (603) 226-7200 Attn: Sherwood T. Small IF TO ANY OTHER HOLDER OF REGISTRABLE SECURITIES: At such Person's address for notice as set forth in the books and records of the Company. or, as to each of the foregoing, at such other address as shall be designated by such Person in a written notice to other parties complying as to delivery with the terms of this subsection (a). All such notices, requests, demands and other communications shall, when mailed, telegraphed or sent, respectively, be effective (i) two days after being deposited in the mails or (ii) one day after being delivered to the telegraph company, deposited with the express overnight courier service or sent by electronic facsimile transmission, respectively, addressed as aforesaid. (b) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without giving effect to conflict of laws principles thereof. (c) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (d) If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein. IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed as of the date first set forth above. COMPANY: BOSTON PRIVATE FINANCIAL HOLDINGS, INC. By: /s/ Walter M. Pressey ------------------------------------ Name: Walter M. Pressey Title: President and Chief Financial Officer HOLDERS: /s/ Sal H. Alfiero ------------------------------------- Sal H. Alfiero /s/ Frank B. Carr ------------------------------------- Frank B. Carr /s/ Martha E. Cottrill ------------------------------------- Martha E. Cottrill /s/ Salvatore J. Cozzolino ------------------------------------- Salvatore J. Cozzolino /s/ C. Michael Hazard ------------------------------------- C. Michael Hazard /s/ John C.L. Hou ------------------------------------- John C.L. Hou /s/ James Nicholls ------------------------------------- James Nicholls /s/ Richard P. Simmons ------------------------------------- Richard P. Simmons /s/ Frederick T. Small ------------------------------------- Frederick T. Small /s/ Lucy H. Small ------------------------------------- Lucy H. Small /s/ Mary H. Small ------------------------------------- Mary H. Small /s/ Sherwood T. Small ------------------------------------- Sherwood T. Small /s/ John S. Tamagni ------------------------------------- John S. Tamagni /s/ Kenneth G. DeWitt ------------------------------------- Kenneth G. DeWitt /s/ Jeffrey D. Lovell ------------------------------------- Jeffrey D. Lovell /s/ Donald H. Putnam ------------------------------------- Donald H. Putnam /s/ Mary Pat Thornton ------------------------------------- Mary Pat Thornton EX-4.2 4 a2062424zex-4_2.txt EXHIBIT 4.2 EXHIBIT 4.2 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated as of the 1st day of October, 2001, by and among Boston Private Financial Holdings, Inc., a Massachusetts corporation (the "Company"), and the person designated as a Holder on the signature pages hereto and any assignees or transferees thereof who become Holders in accordance with Section 8 hereof (each, a "Holder" and collectively, the "Holders"). WHEREAS, the Company and certain parties including the Holder have entered into a certain Agreement and Plan of Merger dated as of June 29, 2001 (the "Merger Agreement"), pursuant to which the Holder will receive shares of Common Stock, par value $1.00 per share (the "Common Stock"), of the Company in connection with the closing of the transactions contemplated thereby; and WHEREAS, the execution of this Agreement is an inducement and a condition to the consummation by the Holder of the transactions contemplated by the Merger Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual promises of the parties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Holders hereby covenant and agree with each other as follows: 1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the following respective meanings: "BOARD" means the Board of Directors of the Company. "COMMISSION" shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act and the Exchange Act. "COMMON STOCK" shall mean the Common Stock and any other common equity securities issued by the Company, and any other shares of stock issued or issuable with respect thereto (whether by way of a stock dividend or stock split or in exchange for or upon conversion of such shares, recapitalization, merger, consideration or other corporate reorganization). "COMPANY" shall refer to the Company and any successor or successors thereto. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "MAJORITY INTEREST" means the Holders holding not less than a majority of the Registrable Securities held by all Holders. 1 "PERSON" shall mean an individual, a corporation, an association, a joint venture, a partnership, a limited liability company, an estate, a trust, an unincorporated organization, and any other entity or organization, governmental or otherwise. "REGISTRABLE SECURITIES" shall mean (i) any shares of Common Stock received by the Holder or his transferees in connection with the transactions contemplated by the Merger Agreement and (ii) any other securities issued or issuable with respect to any such shares described in clause (i) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization; PROVIDED, HOWEVER, that notwithstanding anything to the contrary contained herein, "Registrable Securities" shall not at any time include any securities (i) theretofore registered and sold pursuant to the Securities Act, (ii) theretofore sold to the public pursuant to Rule 144 promulgated under the Securities Act or (iii) which could then be sold in their entirety pursuant to Rule 144(k) promulgated under the Securities Act without limitation or restriction. "REGISTRATION EXPENSES" shall mean the expenses so described in Section 4 hereof. "SECURITIES ACT" shall mean the Securities Act of 1933 or any similar successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 2. PIGGYBACK REGISTRATION. If the Company at any time proposes to register any of its Common Stock under the Securities Act for sale to the public (except with respect to any registration statement on Form S-4, S-8 or any other form not available for registering the Registrable Securities for sale to the public) (a "Piggy-Back Registration"), each such time it will promptly give written notice to each holder of Registrable Securities of its intention to effect such registration. Upon the written request of any such holder of Registrable Securities given within thirty (30) days after receipt by such holder of such notice, the Company will, subject to the limits contained in this Section 2, use its commercially reasonable efforts to cause all of the Registrable Securities of such holder that such holder so requests to be registered under the Securities Act and qualified for sale under any state blue sky law, all to the extent required to permit such sale or other disposition of said Registrable Securities; PROVIDED, HOWEVER, that if the Company is advised in writing in good faith by the managing underwriter of the Company's securities being offered in an underwritten public offering pursuant to such registration statement that the amount to be sold by persons other than the Company (collectively, "Selling Stockholders") is greater than the amount which can be offered without adversely affecting the marketability of the offering, the Company may reduce the amount offered for the accounts of Selling Stockholders (including any holders of Registrable Securities) to a number reasonably deemed satisfactory by such managing underwriter; and PROVIDED, FURTHER, that the securities to be excluded shall be determined in the following sequence: (i) first, securities held by any Persons not having any contractual incidental or "piggy back" registration rights, (ii) second, securities held by any other Persons (other than Persons holding Registrable Securities) having contractual incidental or "piggyback" registration rights subordinate in priority to the registrations rights granted to the Holders hereunder, (iii) third, Registrable Securities held by the Holders or securities held by other Persons having contractual incidental or "piggyback" registration rights equal in priority to the registrations rights granted to the Holders hereunder 2 and (iv) fourth, securities held by any other Persons (other than Persons holding Registrable Securities) having contractual incidental or "piggyback" registration rights superior in priority to the registrations rights granted to the Holders hereunder. If there is a reduction in the number of shares of Common Stock or Registrable Securities to be registered pursuant to clauses (i), (ii), (iii) or (iv) above, such reduction shall be made within each tranche on a pro rata basis (based upon the aggregate number of shares of Common Stock or Registrable Securities held by the holders in each such tranche and subject to the priorities set forth in the preceding sentence). 3. REGISTRATION PROCEDURES. If and whenever the Company is required by the provisions of this Agreement to effect the registration of any of its securities under the Securities Act, the Company will, as soon as practicable: (a) use its commercially reasonable efforts to prepare and file with the Commission a registration statement on the appropriate form under the Securities Act with respect to such securities, which form shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith, and use its commercially reasonable efforts to cause such registration statement to become and remain effective until completion of the proposed offering (but not for more than one hundred eighty (180) days); (b) use its commercially reasonable efforts to prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until the completion of the offering (but not for more than one hundred eighty (180) days) and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such registration statement whenever the seller or sellers of such securities shall desire to sell or otherwise dispose of the same, but only to the extent provided in this Agreement; (c) furnish to each selling holder and the underwriters, if any, such number of copies of such registration statement, any amendments thereto, any documents incorporated by reference therein, the prospectus, including a preliminary prospectus, all in conformity with the requirements of the Securities Act, and such other documents as such selling holder may reasonably request in order to facilitate the public sale or other disposition of the securities owned by such selling holder; (d) use its commercially reasonable efforts to register or qualify the securities covered by such registration statement under and to the extent required by such other securities or state blue sky laws of such jurisdictions as each selling holder shall reasonably request, and do any and all other acts and things which may be necessary under such securities or blue sky laws to enable such selling holder to consummate the public sale or other disposition in such jurisdictions of the securities owned by such selling holder, except that the Company shall not for any such purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified or submit to service of process in any jurisdiction in which it is not already subject; 3 (e) within a reasonable time before each filing of the registration statement or prospectus or amendments or supplements thereto with the Commission, furnish to a single counsel selected by the holders of Registrable Securities proposing to include shares in such registration copies of such documents proposed to be filed, which information in such documents pertaining to such holders shall be subject to the reasonable approval of such counsel; (f) promptly notify each selling holder of Registrable Securities, such selling holders' counsel and any underwriter and (if requested by any such Person) confirm such notice in writing, of the happening of any event which makes any statement made in the registration statement or related prospectus untrue or which requires the making of any changes in such registration statement or prospectus so that they will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and, as promptly as practicable thereafter, prepare and file with the Commission and furnish a supplement or amendment to such prospectus so that, as thereafter deliverable to the purchasers of such Registrable Securities, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (g) use its commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a registration statement, and if one is issued use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement at the earliest possible moment; (h) if requested by the managing underwriter or underwriters (if any), any selling holder, or counsel to the selling holders, promptly incorporate in a prospectus supplement or post-effective amendment such information as such Person requests to be included therein with respect to the selling holder or the securities being sold, including, without limitation, with respect to the securities being sold by such selling holder to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and with respect to any other terms of an underwritten offering of the securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post-effective amendment; (i) make available to each selling holder, any underwriter participating in any disposition pursuant to a registration statement, and a single attorney and accountant retained by any such selling holders or underwriters (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Inspector in connection with such registration statement subject, in each case, to such confidentiality agreements as the Company shall reasonably request; (j) request that each prospective selling holder be furnished a signed counterpart, addressed to the prospective selling holder, of (i) an opinion of counsel for the Company, dated the effective date of the registration statement, and (ii) if and to the extent permitted by applicable professional standards, a "comfort" letter signed by the independent public accountants who have certified the Company's financial statements included in the 4 registration statement, covering substantially the same matters with respect to the registration statement (and the prospectus included therein) and (in the case of the accountants' letter) with respect to events subsequent to the date of the financial statements, as are customarily covered (at the time of such registration) in opinions of the Company's counsel and in accountants' letters delivered to the underwriters in underwritten public offerings of securities; (k) use its commercially reasonable efforts to cause the securities covered by such registration statement to be listed on the securities exchange or quoted on the quotation system on which the Common Stock is then listed or quoted (or, if the Common Stock is not yet listed or quoted, then on such exchange or quotation system as the selling holders of Registrable Securities and the Company shall determine); (l) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission and make generally available to its security holders, in each case as soon as practicable, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement of the Company which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any comparable successor provisions); and (m) otherwise cooperate with the Holders, the underwriter(s), if any, the Commission and other regulatory agencies and take all reasonable actions and execute and deliver or cause to be executed and delivered all documents reasonably necessary to effect the registration of any securities under this Agreement. 4. EXPENSES. All reasonable expenses incurred by the Company, the Holders in effecting the registrations provided for in Section 2 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, fees and disbursements of one counsel for the Holders, underwriting expenses (other than fees, commissions or discounts of selling holders), expenses of any audits incident to or required by any such registration and expenses of complying with the securities or blue sky laws of any jurisdiction pursuant to Section 3(d) hereof (all of such expenses referred to as "Registration Expenses"), shall be paid by the Company. 5. INDEMNIFICATION. (a) The Company shall indemnify and hold harmless each selling holder of Registrable Securities, each underwriter (as defined in the Securities Act), and each other Person who participates in the offering of such securities and each other Person, if any, who controls (within the meaning of the Securities Act) such seller, underwriter or participating Person (individually and collectively, the "Indemnified Persons"), against any losses, claims, damages, liabilities and expenses (collectively, the "liability") to which such Indemnified Persons may become subject under the Securities Act or any other statute or at common law, insofar as such liability (or action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus or final 5 prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading. Except as otherwise provided in Section 5(d) hereof, the Company shall reimburse each such Indemnified Person in connection with investigating or defending any such liability as expenses in connection with the same are incurred; PROVIDED, HOWEVER, that the Company shall not be liable to any Indemnified Person in any such case to the extent that any such liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, preliminary or final prospectus, or amendment or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person specifically for use therein. (b) Each selling holder of any securities included in such registration being effected shall indemnify and hold harmless each other selling holder of any securities, the Company, its directors and officers, each underwriter and each other Person, if any, who controls any such selling holder, the Company or such underwriter (individually and collectively, the "Indemnified Persons"), against any liability, severally and not jointly, to which any such Indemnified Person may become subject under the Securities Act or any other statute or at common law, insofar as such liability (or actions in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which securities were registered under the Securities Act at the request of such selling holder, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission by such selling holder to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in the case of (i) and (ii) to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in such registration statement, preliminary or final prospectus, amendment or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by such selling holder specifically for use therein. Such selling holder shall reimburse any Indemnified Person for expenses (including, without limitation, legal fees) incurred in investigating or defending any such liability; PROVIDED, HOWEVER, that such selling holder's obligations hereunder shall be limited to an amount equal to the net proceeds received by such selling holder for the securities sold in any such registration. (c) Indemnification similar to that specified in Section 5(a) and Section 5(b) hereof shall be given by the Company and each selling holder (with such modifications as may be appropriate) with respect to any required registration or other qualification of their securities under any federal or state law or regulation of governmental authority other than the Securities Act. (d) If the indemnification provided for in this Section 5 for any reason is held by a court of competent jurisdiction to be unavailable to an Indemnified Person in respect of any losses, claims, damages, expenses or liabilities referred to therein, then each indemnifying party under this Section 5, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, expenses or liabilities (i) in such proportion as is appropriate to reflect the 6 relative benefits received by the Company, the selling holders and the underwriters from the offering of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above, but also the relative fault of the Company, the other selling holders and the underwriters in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, the selling holders and the underwriters shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the selling holders and the underwriting discount received by the underwriters, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the Registrable Securities. The relative fault of the Company, the selling holders and the underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the selling holders or the underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct such statement or omission. The Company, the selling holders and the underwriters agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata or per capita allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. In no event, however, shall a selling holder be required to contribute any amount under this Section 5(d) in excess of the lesser of (i) that proportion of the total of such losses, claims, damages, liabilities or expenses indemnified against equal to the proportion of the total Registrable Securities sold under such registration statement which are being sold by such selling holder or (ii) the net proceeds received by such selling holder from its sale of Registrable Securities under such registration statement. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. 6. COMPLIANCE WITH RULE 144. The Company shall use its commercially reasonable efforts to take all action as may be required as a condition to the availability of Rule 144 under the Securities Act (or any comparable successor rules). The Company shall furnish to any holder of Registrable Securities upon request a written statement executed by the Company as to the steps it has taken to comply with the current public information requirement of Rule 144 (or such comparable successor rules). 7. AMENDMENTS. The provisions of this Agreement may be amended only with the written consent of the Company and a Majority Interest, and the Company may take any action herein prohibited or omit to perform any act herein required to be performed by it only with the written consent of a Majority Interest. 7 8. TRANSFERABILITY OF REGISTRATION RIGHTS. The registration rights set forth in this Agreement are transferable to each transferee of at least 10,000 shares of Registrable Securities (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations or other similar changes in the Registrable Securities), which such transferees may include any trust, limited partnership or other estate planning vehicle, the primary beneficiaries or equity holders of which are the transferring holder and/or one or more of a spouse, parent, sibling, child or grandchild of such holder or any charitable trust or foundation. Each subsequent holder of Registrable Securities must consent in writing to be bound by the terms and conditions of this Agreement in order to acquire the rights granted pursuant to this Agreement. 9. RIGHTS WHICH MAY BE GRANTED TO SUBSEQUENT HOLDERS; PRIORITY OF REGISTRATION RIGHTS. Other than transferees of Registrable Securities under Section 8 hereof, the Company shall not, without the prior written consent of a Majority Interest, allow subsequent purchasers of the Company's securities to become a party to this Agreement. The registration rights granted to the holders hereunder shall be (i) subordinate to the registration rights granted pursuant to that certain Registration Rights Agreement dated as of August 31, 2000 by and among the Company and certain stockholders of the Company named therein, and (ii) equal in priority to the registration rights granted pursuant to that certain Registration Rights Agreement dated as of February 28, 2001 by and among the Company and certain stockholders of the Company named therein. 10. DAMAGES. The Company recognizes and agrees that each holder of Registrable Securities will not have an adequate remedy if the Company fails to comply with the terms and provisions of this Agreement and that damages will not be readily ascertainable, and the Company expressly agrees that, in the event of such failure, it shall not oppose an application by any holder of Registrable Securities or any other Person entitled to the benefits of this Agreement requiring specific performance of any and all provisions hereof or enjoining the Company from continuing to commit any such breach of this Agreement. 11. MISCELLANEOUS. (a) Any notice, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given if delivered or sent by facsimile transmission, upon receipt, if sent by a recognized overnight delivery service, upon the next business day, or if sent by registered or certified mail, upon the sooner of the date on which receipt is acknowledged or the expiration of three days after deposit in United States post office facilities properly addressed with postage prepaid. All notices to a party will be sent to the addresses set forth below or to such other address or person as such party may designate by notice to each other party hereunder: IF TO THE COMPANY: Boston Private Financial Holdings, Inc. Ten Post Office Square Boston, MA 02109 Facsimile: (617) 912-4551 Attention: Walter M. Pressey 8 WITH A COPY TO: Goodwin Procter LLP Exchange Place Boston, MA 02109-2881 Facsimile: (617) 523-1231 Attention: William P. Mayer, Esq. Charles H. Sturdy, Esq. IF TO THE HOLDERS: William M. Dougherty c/o Kanon Bloch Carre 10 Post Office Square Boston, MA 02109 Facsimile: (617) 423-3206 WITH A COPY TO: Hutchins, Wheeler & Dittmar, A Professional Corporation 101 Federal Street Boston, MA 02110 Facsimile: (617) 951-1295 Attention: Joseph C. Tanksi, Esq. David M. Barbash, Esq. IF TO ANY OTHER HOLDER OF REGISTRABLE SECURITIES: At such Person's address for notice as set forth in the books and records of the Company. or, as to each of the foregoing, at such other address as shall be designated by such Person in a written notice to other parties complying as to delivery with the terms of this subsection (a). All such notices, requests, demands and other communications shall, when mailed or sent, respectively, be effective (i) two days after being deposited in the mails or (ii) one day after being deposited with a same-day or express overnight courier service or sent by electronic facsimile transmission, respectively, addressed as aforesaid. (b) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without giving effect to conflict of laws principles thereof. (c) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (d) If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein. 9 IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed as of the date first set forth above. COMPANY: BOSTON PRIVATE FINANCIAL HOLDINGS, INC. By: /s/ Walter M. Pressey ------------------------------- Name: Walter M. Pressey Title: President and Chief Financial Officer HOLDER: /s/ William M. Dougherty ------------------------------------- William M. Dougherty EX-5.1 5 a2062424zex-5_1.txt EXHIBIT 5.1 EXHIBIT 5.1 Letterhead of Goodwin Procter LLP November 6, 2001 Boston Private Financial Holdings, Inc. Ten Post Office Square Boston, MA 02109 Ladies and Gentlemen: This opinion is furnished in our capacity as counsel to Boston Private Financial Holdings, Inc., a Massachusetts corporation (the "Company"), in connection with the registration, pursuant to the Securities Act of 1933 (the "Securities Act"), of 226,236 shares (the "Shares") of common stock, par value $1.00 per share, of the Company. In connection with rendering this opinion, we have examined the Amended and Restated Articles of Organization and the Bylaws of the Company, each as amended to date; such records of the corporate proceedings of the Company as we have deemed material; a registration statement on Form S-3 under the Securities Act relating to the Shares and the prospectus contained therein; and such other certificates, receipts, records and documents as we considered necessary for the purposes of this opinion. We are attorneys admitted to practice in The Commonwealth of Massachusetts. We express no opinion concerning the laws of any jurisdiction other than the laws of the United States of America and The Commonwealth of Massachusetts. Based upon the foregoing, we are of the opinion that the Shares are duly authorized, legally issued, fully paid and nonassessable by the Company under the Massachusetts Business Corporation Law. The foregoing assumes that all requisite steps will be taken to comply with the requirements of the Securities Act and applicable requirements of state laws regulating the offer and sale of securities. We hereby consent to the filing of this opinion as an exhibit to the registration statement and to the reference to our firm under the caption "Legal Matters" in the prospectus. Very truly yours, /s/ Goodwin Procter LLP ----------------------------------- GOODWIN PROCTER LLP EX-23.1 6 a2062424zex-23_1.txt EXHIBIT 23.1 EXHIBIT 23.1 Consent of Independent Accountants The Board of Directors of Boston Private Financial Holdings, Inc. We consent to the incorporation by reference in the Registration Statement on Form S-3 of Boston Private Financial Holdings, Inc., of our report dated January 12, 2001 relating to the consolidated balance sheets of Boston Private Financial Holdings, Inc., and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the years in the three year period ended December 31, 2000, which report appears in the December 31, 2000 annual report on Form 10-K of Boston Private Financial Holdings, Inc. and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG LLP ------------------------------------- KPMG LLP Boston, Massachusetts November 5, 2001 EX-23.2 7 a2062424zex-23_2.txt EXHIBIT 23.2 EXHIBIT 23.2 Consent of Independent Accountants The Board of Directors of Borel Bank & Trust Company We consent to the incorporation by reference in the registration statement on Form S-3 of Boston Private Financial Holdings, Inc. of our report dated February 26, 2001 relating to the consolidated balance sheets of Borel Bank & Trust Company as of December 31, 2000 and 1999, and the consolidated related statements of income, comprehensive income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2000, which report appears in the Form S-4 of Boston Private Financial Holdings, Inc. dated August 16, 2001, and to the reference to our firm under the heading "Experts" in the Prospectus. /s/ KPMG LLP ------------------------------ KPMG LLP San Francisco, California November 2, 2001