REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of _________, 1997, by and among
BERKSHIRE REALTY COMPANY, INC., a Delaware corporation, its subsidiary,
Berkshire Apartments, Inc. (collectively, the "General Partner"), and each of
those parties who are or become parties to the Amended and Restated Agreement
of Limited Partnership of BRI OP Limited Partnership (the "Partnership") dated
as of _________, 1997, as amended (the "Partnership Agreement"), as limited
partners of the Partnership from time to time in accordance with the terms of
the Partnership Agreement (the "Rights Holders").
A. Pursuant to the Partnership Agreement, the Rights Holders have the
right at any time and from time to time to convert all or a portion of their
units of partnership interest in the Partnership "Partnership Units") into
shares (the "Shares") of the General Partner's common stock, par value $.01
per share (the "Common Stock"), or cash, as selected by the General Partner.
B. In order to induce the Rights Holders to enter into the
Partnership Agreement, the General Partner has agreed to provide certain
registration rights with respect to the Shares as set forth in this Agreement.
In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Securities Subject to this Agreement. The securities entitled to the
benefits of this Agreement are the Shares issued by the General Partner to the
Rights Holders upon conversion (pursuant to Article XI of the Partnership
Agreement) of Partnership Units held by such Rights Holders, and any other
securities issued by the General Partner in exchange
for any of such Shares (collectively, the "Registrable Securities" but, with
respect to any particular Registrable Security, only so long as it continues to
be a Registrable Security. Registrable Securities shall include any securities
issued as a dividend or distribution on account of Registrable Securities or
resulting from a subdivision of the outstanding shares of Registrable Securities
into a greater number of shares (by reclassification, stock split or otherwise).
For the purposes of this Agreement, a security that was at one time a
Registrable Security shall cease to be a Registrable Security when (i) such
security has been effectively registered under the Securities Act and such
security has been disposed of pursuant to such registration statement, (ii) such
security is sold, or is capable of being sold, in reliance on Rule 144 (or any
similar provision then in effect) under the Securities Act, (iii) such security
has been otherwise transferred and (a) the General Partner has delivered a new
certificate or other evidence of ownership not bearing the legend set forth on
the Shares upon the initial issuance thereof (or other legend of similar import)
and (b) in the reasonable opinion of counsel to the General Partner, the
subsequent disposition of such security would not require the registration or
qualification under the Securities Act, or (iv) such security has ceased to be
outstanding.
2. Shelf Registration.
2.1 Initial Shelf Registration.
(a) The General Partner shall file a "shelf" registration
statement with respect to all Registrable Securities on any appropriate form
pursuant to Rule 415 (or similar rule that may be adopted by the Commission)
under the Act (the "Initial Shelf Registration") on or within two weeks either
side of the date which is one year and ten days after the closing date of the
Questar Transactions (the "Filing Date") (i) covering the issuance of the Common
Stock by the General Partner upon conversion of the Partnership
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Units, and (ii) if required by any Rights Holder, the resale of such Rights
Holder's Common Stock issuable upon conversion of the Partnership Units and,
shall use its best efforts to have such Initial Shelf Registration declared
effective by the Commission on or prior to 90 days after the Filing Date.
(b) The General Partner shall use its best efforts to keep the Shelf
Registration continuously effective until all the Registrable Securities covered
by the Shelf Registration have been sold pursuant to the terms of the Shelf
Registration.
The Company further agrees: (i) if requested by any Rights Holder
in connection with any sale by such Rights Holder (other than pursuant to an
underwritten offering), to promptly include in any Initial Shelf Registration or
Demand Shelf Registration Statement (as defined below), as the case may be, and
related prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Rights Holder(s) may reasonably request to
have included therein, including, without limitation, information relating to
the "Plan of Distribution" of the Registrable Securities; and (ii) to make all
required filings of any prospectus supplement or post-effective amendment as
soon as practicable after the Company is notified of the matters to be included
in such prospectus supplement or post-effective amendment.
2.2 Shelf Registration Upon Demand. In the event that the General
Partner is unable to perform the obligations set forth in Section 2.1 by reason
of a change in Commission policy or law or circumstances beyond the General
Partner's control, subject to the provisions of Section 2.3, upon the written
request of any Rights Holder at any time requesting that the General Partner
effect the registration rights provided under this Section 2 (the "Request"),
and specifying in the Request the number of Registrable Securities to be
registered and the intended method of disposition thereof, the General Partner
shall
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promptly, but in any event within 10 days after receipt of the Request,
give written notice to all other Rights Holders that the General Partner has
received the Request (the "Notice"), and will thereupon use its best efforts to
file within 60 days after receipt of the Request a registration statement (a
"Demand Shelf Registration Statement"), on Form S-3 or other appropriate form
under the Securities Act for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 thereunder or any similar rule that may be adopted by
the Securities and Exchange Commission (the "Commission"), with respect to sales
in ordinary course brokerage or dealer transactions not involving an
underwritten public offering, covering (i) all Registrable Securities held by
the Rights Holder identified in the Request and (ii) all other Registrable
Securities which the General Partner has been requested to register by the
holders thereof by written request delivered to the General Partner within 30
days after the giving of the Notice by the General Partner (which request shall
specify the number of Registrable Securities to be registered and the intended
method of disposition thereof). The General Partner shall use all reasonable
efforts to cause the Demand Shelf Registration Statement to be declared
effective by the commission as soon as practicable after the filing thereof and
to keep the Demand Shelf Registration Statement continuously effective for a
period of two years from the date the Demand Shelf Registration Statement is
declared effective (or such shorter period ending upon the date that all
Registrable Securities initially covered by the Demand Shelf Registration
Statement cease to be Registrable Securities); provided that if the General
Partner shall furnish to the Rights Holders whose Registrable Securities are
covered by such Demand Shelf Registration Statement a certificate signed by the
President of the General Partner stating that, in the good faith judgment of the
Board of Directors of the General Partner, it would be significantly
disadvantageous to the General Partner and its stockholders for any such
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Demand Shelf Registration Statement to be filed, amended or supplemented, the
General Partner may defer such filing, amending or supplementing of such Demand
Shelf Registration Statement for a period of not more than 60 days (the "No Sale
Period") and in such event such Rights Holders shall be required to discontinue
disposition of any Registrable Securities covered by such Demand Shelf
Registration Statement during such period, in which case the General Partner
shall extend the period during which such Demand Shelf Registration Statement
shall be maintained effective pursuant to this-Section 2.2 by the number of days
during the No Sale Period.
2.3 Limitation on Demand Registration Rights. Notwithstanding the
provisions of Section 2.2, the General Partner shall not be obligated to file a
Demand Shelf Registration Statement more often than once during any twelve-month
period.
3. Restrictions on Public Sale. In the event the General Partner intends to
issue shares of its capital stock to the public in an underwritten offering,
each of Messrs. Morton Gorn, Stephen M. Gorn and John B. Colvin agrees, if
requested by the managing underwriter or underwriters for such underwritten
offering, not to effect any public sale or distribution of Registrable
Securities or any securities convertible into or exchangeable or exercisable for
such Registrable Securities, including a sale pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act, during the 14 days
prior to, and during the 180-day period beginning on, the effective date of such
underwritten offering (except as part of such underwritten offering).
4. Registration Procedures. Whenever a Rights Holder has requested that any
Registrable Securities be registered pursuant to Section 2, the General Partner
shall:
(i) use all reasonable efforts to register or qualify such Registrable
Securities under such securities or "blue sky" laws of such jurisdictions as any
Rights Holder
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identified in the Request reasonably requests in writing, and shall do any and
all other acts and things that may be reasonably necessary or advisable to
register or qualify for sale in such jurisdictions the Registrable securities
owned or to be acquired by such Rights Holder upon conversion of such Rights
Holder's Partnership Units; provided, however, that the General Partner shall
not be required to (a) qualify generally to do business in any jurisdiction
where it is not then so qualified, (b) subject itself to taxation in any such
jurisdiction, (c) consent to general service of process in any such jurisdiction
or (d) provide any undertaking required by such securities or "blue sky" laws or
make any change in its charter or bylaws that the Board of Directors determines
in good faith to be contrary to the best interests of the General Partner and
its stockholders;
(ii) notify the Rights Holders whose Registrable Securities are
covered by the Initial Shelf Registration or the Demand Shelf Registration
Statement, as the case may be, at any time when a prospectus relating to the
Initial Shelf Registration or the Demand Shelf Registration Statement, as the
case may be, is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
Initial Shelf Registration or such Demand Shelf Registration Statement, as the
case may be, contains an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and promptly prepare and file with the Commission a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Rights Holders' Registrable Securities, such prospectus will
not contain an 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 light of the circumstances under which they were made, not misleading; and
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(iii) use all reasonable efforts to cause all Registrable Securities
covered by the Initial Shelf Registration or the Demand Shelf Registration
Statement, as the case may be, to be listed on each securities exchange on which
similar securities issued by the General Partner are then listed, provided that
the applicable listing requirements are satisfied.
The General Partner may require any Rights Holder who is a seller or
prospective seller of Registrable Securities as to which a registration is being
effected to furnish to the General Partner such information regarding the
distribution of such Registrable Securities and other matters as may be required
to be included in the Initial Shelf Registration or the Demand Shelf
Registration Statement, as the case may be.
Each Rights Holder who is a seller or prospective seller of Registrable
Securities agrees that, upon receipt of any notice from the General Partner of
the happening of any event of the kind described in paragraph (ii) of this
Section 4, such Rights Holder shall forthwith discontinue disposition of
Registrable Securities pursuant to the Initial Shelf Registration or the Demand
Shelf Registration Statement, as the case may be, until such Rights Holder's
receipt of copies of the supplemented or amended prospectus contemplated by
paragraph (ii) of this Section 4 and, if so directed by the General Partner,
such Rights Holder shall deliver to the General Partner all copies of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the General Partner shall give any such notice, the General
Partner shall extend the period during which such Initial Shelf Registration or
such Demand Shelf Registration Statement, as the case may be, shall be
maintained effective pursuant to Section 2 by the number of days during the
period from and including the date of the giving of such notice pursuant to
paragraph (ii) of this Section 4 to and including the date when each Rights
Holder who is a seller or prospective seller of Registrable securities covered
by such Initial Shelf Registration or such Demand
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Shelf Registration Statement, as the case may be, shall have received the copies
of the supplemented or amended prospectus contemplated by paragraph (ii) of this
Section 4.
5. Registration Expenses. The General Partner shall pay all expenses
incident to its performance of or compliance with this Agreement, including,
without limitation, (i) all Commission, stock exchange and National Association
of Securities Dealers, Inc., registration, filing, transfer agent and listing
fees, (ii) all fees and expenses incurred in complying with securities or "blue
sky" laws (including reasonable fees and disbursements of counsel in connection
with "blue sky" qualifications of the Registrable Securities), (iii) all
printing, messenger and delivery expenses, and (iv) all fees and disbursements
of the General Partner's independent public accountants and counsel, in each
case, regardless of whether such registration becomes effective, unless such
Initial Shelf Registration or such Demand Shelf Registration Statement, as the
case may be, fails to become effective as a result of the fault of a Rights
Holder; provided, however, that the General Partner shall not pay the costs and
expenses of any Rights Holder relating to selling commissions and discounts
relating to Registrable Securities to be sold by such Rights Holder, brokerage
fees, transfer taxes or the fees or expenses of any counsel, accountants or
other representatives retained by the Rights Holders, individually or in the
aggregate.
6. Indemnification; Contribution.
6.1 Indemnification by the General Partner, The General Partner agrees
to indemnify, to the fullest extent permitted by law, each Rights Holder, its
officers, directors, partners and agents and each person, if any, who controls
such Rights Holder (within the meaning of the Securities Act), against any and
all losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any
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amendment thereof or supplement thereto or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading, except insofar as the
same are caused by or contained in any information with respect to such Rights
Holder furnished in writing to the General Partner by such Rights Holder
expressly for use therein or by such Rights Holder's failure to deliver a copy
of the prospectus or any supplements thereto after the General Partner has
furnished such Rights Holder with a sufficient number of copies of the same or
by the delivery of prospectuses by such Rights Holder after the General Partner
notified such Rights Holder in writing to discontinue delivery of prospectuses.
6.2 Indemnification by Rights Holders. In connection with any registration
statement in which a Rights Holder is participating, each such Rights Holder
shall furnish to the General Partner in writing such information and affidavits
with respect to such Rights Holder as the General Partner reasonably requests
for use in connection with any such registration statement or prospectus and
agrees to indemnify, severally and not jointly, to the fullest extent permitted
by law, the General Partner, its officers, directors, partners and agents and
each person, if any, who controls the General Partner (within the meaning of the
Securities Act) against any and all losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of a material
fact or any omission or alleged omission of a material fact required to be
stated in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or necessary to make the statements
therein (in the case of a prospectus, in light of the circumstances under which
they were made) not misleading, to the extent, but only to the extent, that such
untrue or alleged untrue statement or omission is contained in or omitted
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from, as the case may be, any information or affidavit with respect to such
Rights Holder so furnished in writing by such Rights Holder.
6.3 Conduct of Indemnification Proceedings. Any party that proposes to
assert the right to be indemnified under this Section 6 shall, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim is to be made against an indemnifying party or parties under this
Section 6, notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so to notify
such indemnifying party will not relieve it from any liability that it may have
to any indemnified party under the foregoing provisions of this Section 6
unless, and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
If the indemnifying party assumes the defense, the indemnifying party shall have
the right to settle such action without the consent of the indemnified party;
provided, however, that the indemnifying party shall be required to obtain such
consent (which consent shall not be unreasonably withheld) if the settlement
includes any admission of wrongdoing on the part
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of the indemnified party or any decree or restriction on the indemnified party
or its officers or directors; provided, further, that no indemnifying party, in
the defense of any such action, shall, except with the consent of the
indemnified party (which consent shall not be unreasonably withheld), consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such action.
The indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party), or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties,
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time from all
such indemnified party or parties unless (a) the employment of more than one
counsel has been authorized in writing by the
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indemnifying party or parties, (b) an indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it
that are different from or in addition to those available to the other
indemnified parties, or (c) a conflict or potential conflict exists (based on
advice of counsel to an indemnified party) between such indemnified party and
the other indemnified parties, in each of which cases the indemnifying party
shall be obligated to pay the reasonable fees and expenses of such additional
counsel or counsels. An indemnifying party will not be liable for any settlement
of any action or claim effected without its written consent (which consent shall
not be unreasonably withheld).
6.4 Contribution. If the indemnification provided for in this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, to the extent such indemnification is
unavailable, in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified parties in
connection with the actions that resulted in such losses, claims, damages,
liabilities or expenses. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in
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Section 6.3, any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.4 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person,
If indemnification is available under this Section 6, the indemnifying
parties shall indemnify each indemnified party to the fullest extent provided in
Section 6.1 and 6.2 without regard to the relative fault of said indemnifying
parties or indemnified party.
7. Rule 144. The General Partner covenants that it shall use all reasonable
efforts to file the reports required to be filed by it under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
commission thereunder (or, if the General Partner ceases to be required to file
such reports, it shall, upon the request of any Rights Holder, make publicly
available other information), and it shall, if feasible, take such further
action as any Rights Holder may reasonably request, all to the extent required
from time to time to enable such Rights Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rules or regulations hereafter
adopted by the Commission. Upon the written request of any Rights Holder, the
General Partner shall deliver to such Rights Holder a written statement as to
whether it has complied with such requirements.
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8.Miscellaneous.
8.1 Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended in a manner adverse to the
Rights Holders unless the General Partner has obtained the written consent of
all Rights Holders existing at the time of such amendment.
8.2 Notices. Any notice or other communication required or permitted
hereunder shall be given in accordance with the terms of the Partnership
Agreement.
8.3 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective successors and permitted
assigns. No Rights Holder may assign its rights hereunder to any person who is
not a permitted transferee of such Rights Holder pursuant to the terms of the
Partnership Agreement and no Rights Holder may assign its rights hereunder to
any person who does not acquire all or substantially all of such Rights Holder's
Registrable securities or Partnership Units, as the case may be.
8.4 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
8.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
8.6 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, it
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being intended that all of the rights of the Rights Holders shall be enforceable
to the fullest extent permitted by law.
8.7 Entire Agreement. This Agreement, together with the Partnership
Agreement, is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings other
than those set forth or referred to herein or in the Partnership Agreement. This
Agreement, together with the Partnership Agreement, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
BERKSHIRE REALTY COMPANY, INC.
By:
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Name:
Title:
EACH PERSON WHO QUALIFIES AS A "RIGHTS HOLDER"
(as defined in the introductory paragraph hereof)
By: Berkshire Realty Company, Inc.,
pursuant to a power of attorney in Section 12.14
of the Partnership Agreement
By:
-----------------------------------
Name:
Title:
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