REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of May 1, 1995, by and among
BERKSHIRE REALTY COMPANY, INC., a Delaware corporation (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 May 1, 1995, 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. Any
Shares issued upon such conversion will not be registered under the Securities
Act of 1933, as amended (the "Securities Act").
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.
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1.1 Registrable Securities. 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 either (a) the registration statement with respect
thereto has remained continuously effective for 90 days or (b) 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
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not require the registration or qualification under the Securities Act, or (iv)
such security has ceased to be outstanding.
1.2 Simultaneous Exercise. Notwithstanding anything to the contrary
contained herein, any Rights Holder may exercise its rights to request a shelf
registration under Section 2 prior to its receipt of Shares, provided that such
Rights Holder, simultaneously with the delivery of the request by such Rights
Holder to effect a shelf registration pursuant to Section 2, shall deliver an
Exercise Notice (in the form of Exhibit E to the Partnership Agreement
indicating, as provided in such form, that such exercise is subject to the
provisions of this Section 1.1) to the General Partner requesting conversion of
Partnership Units into such number of Shares as such Rights Holder has requested
to be registered. Any such Exercise Notice so delivered shall be conditioned on
the effectiveness of the requested registration in connection with which it was
delivered. Nothing contained herein shall create any obligation on the part of
the General Partner to issue Shares, rather than cash, upon the conversion of
any Partnership Units.
2. Shelf Registration.
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2.1 Shelf Registration Upon Demand. Subject to the provisions of
Section 2.2, 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 promptly, but in any event within
10 days after receipt of the Request, give
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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 "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
Shelf Registration Statement to be declared effective by the Commission as soon
as practicable after the filing thereof and to keep the Shelf Registration
Statement continuously effective for a period of not less than 90 days from the
date the Shelf Registration Statement is declared effective (or such shorter
period of time ending upon the date that all Registrable Securities initially
covered by the 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 Shelf Registration Statement a
certificate signed by the President of the General
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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 Shelf Registration Statement to be
filed, amended or supplemented, the General Partner may defer such filing,
amending or supplementing of such 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 Shelf Registration Statement during such period, in
which case the General Partner shall extend the period during which such Shelf
Registration Statement shall be maintained effective pursuant to this Section
2.1 by the number of days during the No Sale Period.
2.2 Limitation on Registration Rights. Notwithstanding the provisions
of Section 2.1, (a) if the General Partner irrevocably elects prior to the
filing of any Shelf Registration Statement to issue all cash in lieu of Shares
upon the conversion of Partnership Units by the Rights Holders identified in the
Request, the General Partner shall not be obligated to give the Notice or to
file such Shelf Registration Statement and (b) the General Partner shall not be
obligated to file a 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 Rights Holder agrees, if requested by the managing underwriter or
underwriters for such underwritten offering, not to effect any public sale or
distribution of
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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 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;
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(ii) notify the Rights Holders whose Registrable Securities are
covered by the Shelf Registration Statement at any time when a prospectus
relating to the Shelf Registration Statement 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 Shelf Registration Statement 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 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
(iii) use all reasonable efforts to cause all Registrable
Securities covered by the Shelf Registration Statement 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 Shelf Registration Statement.
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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 Shelf Registration Statement 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 Shelf
Registration Statement 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 Shelf Registration Statement shall have
received the copies of the supplemented or amended prospectus contemplated by
paragraph (ii) of this Section.
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 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"
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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 Shelf Registration Statement
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.
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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 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
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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
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or omitted 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
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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 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
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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 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,
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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 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.
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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.
8. Miscellaneous.
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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.
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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 being intended
that all of the
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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:
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
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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: Xxxxx X. Xxxxxxxx
Title: Vice President
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