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EXHIBIT 10.7
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Second Amended and Restated Registration Rights Agreement
(the "Agreement") is made and entered into as of July 30, 1998, by and among
American Industrial Properties REIT, a Texas real estate investment trust (the
"Company"), ABKB/LaSalle Securities Limited Partnership ("ABKB"), acting as
agent for and on behalf of a particular client and LaSalle Advisors Limited
Partnership ("LaSalle," and together with ABKB, the "Investor"), acting as agent
for and on behalf of certain of their respective clients(the "Pecuniary
Owners").
WITNESSETH:
WHEREAS, pursuant to certain Common Share Purchase Agreements,
each dated as of July 3, 1997, among the Company and the Investor, as agent for
and on behalf of each of the Pecuniary Owners (collectively, the "Purchase
Agreement"), the Investor purchased 6,122,449 Common Shares (the "Shares") of
the Company as agent for and on behalf of the Pecuniary Owners;
WHEREAS, pursuant to the terms of the Purchase Agreement, the
Company and Investor agreed that the Company would grant certain registration
rights to the Investor with respect to the Shares;
WHEREAS, the Company and the Investor entered into
Registration Rights Agreements as of July 10, 1997 and January 29, 1998 (the
"Prior Registration Rights Agreement");
WHEREAS, the Company is entering into a Share Purchase
Agreement, an Agreement and Plan of Merger and a Registration Rights Agreement
on the date hereof with Developers Diversified Realty Corporation ("DDR"); and
WHEREAS, to enable the Company to enter into such agreements
with DDR, the Investor has agreed to amend the registration rights previously
granted to Investor by the Company;
NOW, THEREFORE, for the promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Closing Date: The closing date as defined in the Purchase
Agreement.
Common Shares: The common shares of beneficial interest, $0.10
par value per share, of the Company.
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Exchange Act: The Securities Exchange Act of 1934, as amended
from time to time.
Person: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
Preemptive Rights: As defined in the Purchase Agreement.
Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
Purchase Agreement: As defined in the Recitals to this
Agreement.
Purchasers: See Section 2(b) hereof.
Registrable Securities: (a) The Shares, (b) any securities
issued or issuable with respect to the Shares by way of share dividend or share
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise and (c) any additional Common
Shares of the Company purchased by the Investor (as agent for and on behalf of
the Pecuniary Owners or on behalf of any other client of the Investor that was
assigned Preemptive Rights under the Purchase Agreement) purchase to the
exercise of Preemptive Rights. Any Registrable Security will cease to be a
Registrable Security when (i) a registration statement covering such Registrable
Security has been declared effective by the SEC and the Registrable Security has
been disposed of pursuant to such effective registration statement, (ii) the
Registrable Security is sold under circumstances in which all of the applicable
conditions of Rule l44 (or any similar provisions then in force) under the
Securities Act are met, or (iii) the Registrable Security has been otherwise
transferred, the Company has delivered a new certificate or other evidence of
ownership for it not bearing a legend restricting further transfer, and it may
be resold without subsequent registration under the Securities Act.
Registration Expenses: See Section 5 hereof.
Registration Statement: The Registration Statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus included therein, all amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
SEC: The Securities and Exchange Commission or any successor
entity.
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Securities Act: The Securities Act of 1933, as amended from
time to time.
Shares: As defined in the Recitals to this Agreement.
Shelf Registration: See Section 2(a) hereof.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Registration Rights.
(a) Shelf Registration. Upon the written request of the
Investor, holding, in the aggregate not less than (i) 25% of the aggregate
Registrable Securities outstanding, (ii) Registrable Securities having a fair
market value of at least $2 million whichever is less, that the Company effect
the registration under the Securities Act of such Registrable Securities
pursuant to a "shelf" registration statement, the Company will file such a
"shelf" registration statement on any appropriate form pursuant to Rule 415 (or
similar rule that may be adopted by the SEC) under the Securities Act (a "Shelf
Registration"), which Shelf Registration will cover (1) the Registrable
Securities that the Company has been so requested to register by the Investor,
and (2) all other Registrable Securities that the Company has been requested to
register by any other Pecuniary Owners by written request given to the Company
within 15 days after the Company's giving of written notice of the requesting
Investor's requested registration.
The Company hereby agrees to file such registration statement
as promptly as practicable following the request therefor, and in any event
within 60 days following the date such request is received by the Company, and
thereafter to use its commercially reasonable efforts to cause such Shelf
Registration to become effective and thereafter to keep it continuously
effective, and to prevent the happening of any event of the kind described in
Section 4(c)(3), (4), (5) or (6) hereof that requires the Company to give notice
pursuant to the last paragraph of Section 4 hereof, for a period terminating on
the third year anniversary of the date on which the SEC declares the Shelf
Registration effective, or such shorter period as shall terminate on the date on
which all the Registrable Securities covered by the Shelf Registration have been
sold pursuant to such Shelf Registration. The Company shall be obligated to file
only one Shelf Registration and shall not be obligated to file a Shelf
Registration if three Demand Registrations (hereinafter defined) have been
effected under Section 2(b).
The Company further agrees to promptly supplement or make amendments to
the Shelf Registration, if required by the rules, regulations or instructions
applicable to the registration form utilized by the Company or by the Securities
Act or rules and regulations thereunder for shelf registration or if requested
by the Investor holding in the aggregate in excess of 50% of the Registrable
Securities covered by the Shelf Registration or any underwriter of the
Registrable Securities.
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If the Investor holding in the aggregate in excess of 50% of the
Registrable Securities covered by the Shelf Registration so elects, the offering
of Registrable Securities pursuant to such registration shall be in the form of
an Underwritten Offering.
(b) Demand Registration. At any time during the five year
period following the Closing Date, the Investor holding in the aggregate not
less than (i) 25% of the aggregate Registrable Securities outstanding or (ii)
Registrable Securities having a fair market value of at least $2 million,
whichever is less, may make a written request (the "Demand Notice") for
registration under the Securities Act (a "Demand Registration") of its
Registrable Securities. The Demand Notice will specify the number of shares of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. Following receipt of a Demand Notice from the
Investor, the Company promptly will file a registration statement on any
appropriate form which will cover the Registrable Securities that the Company
has been so requested to register by the Investor.
Unless the Investor shall consent in writing, no party (including the
Company) other than a Pecuniary Owner, DDR, USAA Real Estate Company ("Realco"),
MS Real Estate Special Situations Inc. ("MRSE"), certain clients of Xxxxxx
Xxxxxxx Asset Management Inc. who have purchased Common Shares of the Company
(such clients together with MRSE, the "Xxxxxx Entities"), and Praedium II
Industrial Associates LLC ("Praedium") shall be permitted to offer securities
under any such Demand Registration. The Company shall not be required to effect
more than three Demand Registrations under this Section 2(b). A registration
requested pursuant to this Section 2(b) will not be deemed to have been effected
(and it shall not count as one of the three Demand Registrations) unless the
Registration Statement relating thereto has become effective under the
Securities Act; provided, however that if, after such Registration Statement has
become effective, the offering of the Registrable Securities pursuant to such
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
registration will be deemed not to have been effected (and it shall not count as
one of the three Demand Registrations). The Investor, holding in excess of 50%
of the Registrable Securities covered by a Demand Registration may at any time
prior to the effective date of the Registration Statement relating to such
registration revoke a Demand Notice by providing a written notice to the Company
(in which case such Demand Registration shall not count as one of the three
Demand Registrations).
If the Investor holding in the aggregate in excess of 50% of the
Registrable Securities covered by the Demand Registration so elects, the
offering of Registrable Securities pursuant to such registration shall be in the
form of an Underwritten Offering. If the managing underwriter or underwriters of
such offering advise the Company and the Investor in writing that in their
opinion the number of shares of Registrable Securities and shares of DDR,
Realco, the Xxxxxx Entities or Praedium, if any, requested to be included in
such offering is sufficiently large to materially and adversely affect the
success of such offering, the Company will include in such registration the
aggregate number of Registrable Securities and shares of DDR, Realco, the Xxxxxx
Entities or Praedium, if any, requested to be included, which in the opinion of
such managing underwriter or underwriters can be sold without any such material
adverse effect; provided, however, that no
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Registrable Securities or shares of DDR, Realco, the Xxxxxx Entities or
Praedium, if any, may be excluded before all shares proposed to be sold by other
parties, including the Company, have been excluded. If any Registrable
Securities are excluded, such registration shall not count as one of the three
Demand Registrations. If the amount of Registrable Securities proposed to be
registered hereunder are required to be excluded pursuant to this paragraph, the
number of Registrable Securities of the Investor and the number of shares of
DDR, Realco, the Xxxxxx Entities or Praedium, if any, to be included in such
Registration shall be reduced pro rata (according to the total number of
Registrable Securities or shares, as the case may be, beneficially owned by each
such holder), to the extent necessary to reduce the total amount necessary to be
included in the Offering to the amount recommended by such managing underwriter
or underwriters.
No registration pursuant to a request or requests referred to in this
subsection 2(b) shall be deemed to be a Shelf Registration.
(c) Incidental Registration. If at any time during the five
year period following the Closing Date, the Company proposes to file a
registration statement under the Securities Act (other than in connection with a
Registration Statement on Form S-4 or S-8, or any form that is substituting
therefor or is a successor thereto) with respect to an offering of any class of
security by the Company for its own account or for the account of any of its
security holders, then the Company shall give written notice of such proposed
filing to the Investor as soon as practicable (but in no event less than 30 days
before the anticipated filing date), and such notice shall (i) offer the
Investor the opportunity to register such number of Registrable Securities as it
may request and (ii) describe such securities and specify the form and manner
and other relevant facts involved in such proposed registration (including,
without limitation, (x) whether or not such registration will be in connection
with an Underwritten Offering and, if so, the identity of the managing
underwriter and whether such Underwritten Offering will be pursuant to a "best
efforts" or "firm commitment" underwriting and (y) the price (net of any
underwriting commissions, discounts and the like) at which the Registrable
Securities are reasonably expected to be sold, if such disclosure is acceptable
to the managing underwriter). The Investor shall advise the Company in writing
within 20 days after the date of receipt of such notice from the Company of the
number of Registrable Securities for which registration is requested. The
Company shall include in such Registration Statement all such Registrable
Securities so requested to be included therein, and, if such registration is an
Underwritten Registration, the Company shall use its commercially reasonable
efforts to cause the managing underwriter or underwriters to permit the
Registrable Securities requested to be included in the registration statement
for such offering to be included (on the same terms and conditions as similar
securities of the Company included therein to the extent appropriate); provided,
however, that if the managing underwriter or underwriters of such offering
deliver a written opinion to the Investor that either because of (i) the kind of
securities which the Investor, the Company, or any other Persons intend to
include in such offering or (ii) the size of the offering which the Investor,
the Company, or such other Persons intend to make, the success of the offering
would be materially and adversely affected by inclusion of the Registrable
Securities requested to be included, then (A) in the event that the size of the
offering is the basis of such managing underwriter's opinion, the amount of
securities to be offered for the account of the Investor and other holders
registering securities of the Company
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pursuant to similar incidental registration rights shall be reduced pro rata
(according to the Registrable Securities beneficially owned by each such holder)
to the extent necessary to reduce the total amount of securities to be included
in such offering to the amount recommended by such managing underwriter or
underwriters; and (B) in the event that the combination of securities to be
offered is the basis of such managing underwriter's opinion, (x) the Registrable
Securities and other securities to be included in such offering shall be reduced
as described in clause (A) above or, (y) if the actions described in clause (A)
would, in the judgment of the managing underwriter and pursuant to a written
opinion delivered to the Investor, be insufficient to substantially eliminate
the adverse effect that inclusion of the Registrable Securities requested to be
included would have on such offering, such Registrable Securities will be
excluded from such offering. Notwithstanding the foregoing, if the Investor
exercises an incidental registration in connection with DDR's or Realco's or the
Xxxxxx Entities' or Praedium's demand registration rights, then the managing
underwriter's cutback provision under the demand registration right set forth in
Section 2(b) shall govern with respect to the Investor and not the managing
underwriter's cutback provision in this Section 2(c).
No registration pursuant to a request or requests referred to in this
subsection 2(c) shall be deemed to be a Shelf Registration.
3. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holder of Registrable
Securities. The Investor agrees, if reasonably requested by the managing
underwriters in an Underwritten Offering, not to effect any public sale or
distribution of securities of the Company of the same class as the securities
included in the Registration Statement relating to such Underwritten Offering,
including a sale pursuant to Rule 144 under the Securities Act (except as part
of such Underwritten Offering), during the 10-day period prior to the filing of
such Registration Statement, and during the 90-day period beginning on the
closing date of each Underwritten Offering made pursuant to such Registration
Statement, to the extent timely notified in writing by the Company or the
managing underwriters.
(b) Restrictions on Sale of Securities by the Company. The
Company agrees not to effect any public sale or distribution of any securities
similar to those being registered, or any securities convertible into or
exchangeable or exercisable for such securities (except pursuant to a
registration statement on Form S-4 or S-8, or any substitute form that may be
adopted by the SEC) during the ten days prior to the filing of a registration
statement with respect to an Underwritten Offering, and during the 90-day period
beginning on the effective date of such Registration Statement (except as part
of such registration statement (x) where the Investor participating in such
registration statement consents, (y) where the Investor is participating in such
registration statement pursuant to Section 2(c) hereof, such registration
statement was filed by the Company with respect to the sale of securities by the
Company, and the Investor is not simultaneously participating in a registration
statement pursuant to Section 2(b) hereof), or (z) with respect to DDR, Realco,
the Xxxxxx Entities or Praedium, if such parties are participating in a Demand
Registration pursuant to Section 2(b) hereof), or the commencement of a public
distribution of Registrable Securities pursuant to such registration statement.
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4. Registration Procedures. In connection with the Company's
registration obligations pursuant to Section 2 hereof, the Company will use its
commercially reasonable efforts to effect such registration to permit the sale
of such Registrable Securities in accordance with the intended method or methods
of distribution thereof, and pursuant thereto the Company will use commercially
reasonable efforts to as expeditiously as possible:
(a) prepare and file with the SEC, as soon as practicable,
and in any event within 60 days from the date of request, a Registration
Statement relating to the applicable registration on any appropriate form under
the Securities Act, which forms shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof and shall include all financial statements of the Company,
and use its commercially reasonable efforts to cause such Registration Statement
to become effective; provided that before filing a Registration Statement or
Prospectus or any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the Registration
Statement, the Company will furnish the Investor and the underwriters, if any,
copies of all such documents proposed to be filed, which documents will be
subject to the review of the Investor and the underwriters, if any, and the
Company will not file any Registration Statement or amendment thereto or any
Prospectus or any supplement thereto (including such documents incorporated by
reference) to which the Investor holding in the aggregate in excess of 50% of
the Registrable Securities covered by such Registration Statement or the
underwriters, if any, shall reasonably object (except in the case of a filing
pursuant to Section 2(c) hereof);
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period, or such
shorter period, which will terminate when all Registrable Securities included in
such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with the
provisions of all securities included in such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus; the Company shall not be deemed to have used
commercially reasonable efforts to keep a Registration Statement effective
during the applicable period if it voluntarily takes any action that would
result in the Investor not being able to sell its Registrable Securities during
that period unless such action is required under applicable law; provided that
the foregoing shall not apply to actions taken by the Company in good faith and
for valid business reasons, including without limitation the acquisition or
divestiture of assets, so long as the Company promptly thereafter complies with
the requirements of Section 4(k) hereof, if applicable;
(c) notify the Investor and the managing underwriters, if
any, promptly (and in no event more than three days after the occurrence of any
of the following events), and (if requested by any such Person) confirm such
advice in writing, (l) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(2) of any request
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by the SEC for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (3) of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (4) if at any time the
representations and warranties of the Company contemplated by paragraph (m)
below cease to be true and correct, (5) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (6) of the happening of any
event which makes any statement made in the Registration Statement, the
Prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the Registration Statement, the Prospectus
or any document incorporated therein by reference in order to make the
statements therein not misleading;
(d) obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest possible moment;
(e) if reasonably requested by the managing underwriter or
underwriters or by the Investor holding in the aggregate in excess of 50% of the
Registrable Securities covered by the Registration Statement, promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters and the Investor agree should be
included therein relating to the sale of the Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being sold to such underwriters, the purchase price being paid
therefor by such underwriters and with respect to any other terms of the
Underwritten (or best efforts underwritten) Offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(f) furnish to the Investor and each managing underwriter,
if any, without charge, at least one signed copy of the Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(g) deliver to the Investor and the underwriters, if any,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons may
reasonably request; the Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Investor and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities,
register or qualify or cooperate with the Investor, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as the Investor or any
underwriter reasonably requests in
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writing and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered by
the Registration Statement;
(i) cooperate with the Investor and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends (except as reasonably required to protect the Company's
status as a REIT); and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of Registrable Securities
to the underwriters;
(j) cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
Investor or the underwriters, if any, to consummate the disposition of such
Registrable Securities;
(k) upon the occurrence of any event contemplated by
Section 4(c)(6) above, prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, the Prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(l) cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed;
(m) enter into such agreements (including an underwriting
agreement) and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of such Registrable Securities and in
connection therewith, whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration, (1) make
such representations and warranties to the Investor and each Pecuniary Owner, as
applicable, and the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten offerings;
(2) obtain opinions of counsel to the Company and updates thereof (which counsel
and opinions (in form, scope and substance) shall be reasonably satisfactory to
the Investor and the managing underwriters, if any, covering the matters
customarily covered in opinions requested in Underwritten Offerings and such
other matters as may be reasonably requested by the Investor and the
underwriters, if any; (3) obtain "cold comfort" letters and updates thereof from
the Company's independent certified public accountants addressed to the Investor
and the underwriters, if any, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters by
underwriters in connection with primary Underwritten Offerings; (4) if an
underwriting agreement is entered into, the same shall set forth in full the
indemnification provisions and procedures of Section 6 hereof with respect to
all parties to be indemnified pursuant to said Section; and (5) deliver such
documents and certificates as may be reasonably requested by the Investor and
the managing underwriters, if any, to evidence compliance
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with clause (1) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The above
shall be done at each closing under such underwriting or similar agreement or as
and to the extent required thereunder;
(n) make available for inspection by a representative of
the Investor, any underwriter participating in any disposition pursuant to such
registration, and any attorney or accountant retained by the Investor or any
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, trust managers and
employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
registration; provided that any records, information or documents that the
Company designates in writing as confidential shall be kept confidential by such
Persons unless disclosure of such records, information or documents is required
by court or administrative order;
(o) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering a period of 12 months, beginning within three months after
the effective date of the registration statement, which earnings statement shall
satisfy the provisions of section 11(a) of the Securities Act; and
(p) cooperate with the Investor and each underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD").
The Company may require the Investor or each Pecuniary Owner, as
applicable, to furnish to the Company such information regarding the
distribution of Registrable Securities as the Company may from time to time
reasonably request in writing.
The Investor agrees by acquisition of the Registrable Securities that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 4(k) hereof, the Investor will forthwith discontinue
disposition of Registrable Securities until the Investor's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 4(k) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the Prospectus, and,
if so directed by the Company, the Investor will deliver to the Company (at the
Company's expense), all copies, other than permanent file copies then in the
Investor's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the time periods regarding the effectiveness of
Registration Statements set forth in Section 2 hereof and Section 4(b) hereof
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 4(c)(6) hereof to the date
when the Investor shall receive copies of the supplemented or amended prospectus
contemplated by Section 4(k) hereof or the Advice.
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5. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation: all registration and filing fees; fees with respect to filings
required to be made with the NASD; fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters or the Investor in connection with blue sky
qualifications of the Registrable Securities and determination of their
eligibility for investment under the laws of such jurisdictions as the managing
underwriters and the Investor may designate); printing expenses, messenger,
telephone and delivery expenses; fees and disbursements of counsel for the
Company and fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters requested pursuant to Section 4(m) hereof);
securities acts liability insurance, if the Company so desires; all internal
expenses of the Company (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties);
the expense of any annual audit; the fees and expenses incurred in connection
with the listing of the securities to be registered on each securities exchange
on which similar securities issued by the Company are then listed; and the fees
and expenses of any Person, including special experts, retained by the Company
(all such expenses being herein called "Registration Expenses") will be borne by
the Company regardless of whether the Registration Statement becomes effective.
The Company shall not have any obligation to pay any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities, or
any legal fees and expenses of counsel to the Investor, except as expressly
provided herein.
6. Indemnification: Contribution.
(a) Indemnification by Company. The Company agrees to
indemnify and hold harmless the Investor, each Pecuniary Owner and their
respective partners, officers, directors, employees and agents, and each Person
who controls any such Persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) against all losses, claims,
damages, liabilities and reasonable expenses arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or 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 insofar as
the same are caused by or contained in any information furnished in writing to
the Company by the Investor or such Pecuniary Owner, as the case may be,
expressly for use therein. The Company will also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and trust managers and each
Person who controls such Persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as provided
above with respect to the indemnification of the Investor, if requested.
(b) Indemnification By Holder of Registrable Securities.
The Investor and each Pecuniary Owner, severally and not jointly, agrees to
indemnify and hold harmless the Company and its trust managers, officers,
employees and agents, and each Person who controls the Company
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(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) against any losses, claims, damages, liabilities and reasonable
expenses resulting from any untrue statement of a material fact or any omission
of a material fact required to be stated in the Registration Statement or
Prospectus or preliminary prospectus or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by the Investor, as agent for and on behalf of each Pecuniary Owner,
to the Company specifically for inclusion in such Registration Statement or
Prospectus. In no event shall the liability of the Investor or any Pecuniary
Owner hereunder be greater in amount than the dollar amount of the proceeds
received by such Person upon the sale of the Registrable Securities giving rise
to such indemnification obligation. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the same
extent as provided above with respect to information so furnished in writing by
such Persons specifically for inclusion in any Prospectus or Registration
Statement.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt notice (and in any
event within 10 days) to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided, however that any Person entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in
the defense of such claim, but the fees and expenses of such counsel shall be at
the expense of such Person unless (a) the indemnifying party has agreed to pay
such fees or expenses, (b) the indemnifying party shall have failed to assume
the defense of such claim and employ counsel reasonably satisfactory to such
Person or (c) based upon written advice of counsel to such Person, there shall
be one or more defenses available to such Person that are not available to the
indemnifying party or there shall exist conflicts of interest pursuant to
applicable rules of professional conduct between such Person and the
indemnifying party (in which case, if the Person notifies the indemnifying party
in writing that such Person elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such claim on behalf of such Person), in each of which
events the fees and expenses of such counsel shall be at the expense of the
indemnifying party. The indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld), but if settled with its written consent, or if there be
a final judgment for the plaintiff in any such action or proceeding, the
indemnifying party shall indemnify and hold harmless the indemnified parties
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment. No indemnified party will be required to consent to
entry of any judgment or enter into any settlement which 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 in respect to such claim or
litigation.
(d) Contribution. If for any reason the indemnification
provided for in the preceding clauses (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated by the
preceding clauses (a) and (b), then the indemnifying party shall contribute
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to the amount paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations,
provided, that in no event shall the Investor or any Pecuniary Owner be required
to contribute an amount greater than the dollar amount of the proceeds received
by Investor with respect to the sale of the Registrable Securities giving rise
to such indemnification obligation. The relative fault of the Company on the one
hand and of the Investor and each Pecuniary Owner on the other 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 such party, and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
7. Rule 144. The Company hereby agrees that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder (or, if the Company
is not required to file such reports, it will, upon the request of the Investor,
make publicly available other information so long as necessary to permit sales
pursuant to Rule 144 under the Securities Act), and it will take such further
action as the Investor may reasonably request, all to the extent required from
time to time to enable the Investor to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of the Investor, the Company will deliver to the
Investor a written statement as to whether it has complied with such information
and requirements.
8. Participation in Underwritten Registrations.
(a) If any of the Registrable Securities covered by the
Shelf Registration are to be sold in an Underwritten Offering (excluding under
Section 2(c)), the investment banker or investment bankers and manager or
managers that will administer the offering will be selected by the Investor
holding in the aggregate in excess of 50% of the Registrable Securities covered
thereby; provided that such investment bankers and managers must be reasonably
satisfactory to the Company.
(b) No Person may participate in any Underwritten
Registration hereunder unless such Person (i) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements. Nothing in this Section 8 shall be construed to create any
additional rights regarding the registration of Registrable Securities in any
Person otherwise than as set forth herein.
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9. Miscellaneous.
(a) Remedies. Each party hereto, in addition to being
entitled to exercise all rights provided herein or granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement to the extent available under applicable law. Each party
hereto agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(b) Third Party Registration Rights. The Company will not
after the date of this Agreement, enter into any agreement granting registration
rights to any other Person with respect to the securities of the Company that
are not junior or subordinate to the rights granted to the Investor hereunder
without the written consent of the Investor. The Company hereby represents and
warrants to the Investor that it has obtained all necessary consents or waivers
of Realco, the Xxxxxx Entities and Praedium in connection with the execution of
this Agreement and the consummation of the transactions contemplated hereby.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given without the written consent of the Company
and Investor.
(d) Notices. The notice provisions contained in Section
12.11 of the Purchase Agreement shall be incorporated herein and shall be
governing under this Agreement.
(e) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities, provided further, that
the Company cannot assign its rights hereunder except pursuant to a merger.
(f) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. THIS AGREEMENT, AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
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(i) Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any current or future law,
and if the rights or obligations of the parties under this Agreement would not
be materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. In lieu of such illegal, invalid or
unenforceable provision, there shall be added simultaneously as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible, and the parties
hereto request the court or any arbitrator to whom disputes relating to this
Agreement are submitted to reform the otherwise illegal, invalid or
unenforceable provision in accordance with this Section 9(i).
(j) Arbitration. In the event of a dispute hereunder which
cannot be resolved by the parties, such dispute shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association and judgment on the award rendered by the arbitration panel may be
entered in any court or tribunal of competent jurisdiction. Any arbitration
occurring under this Section 9(j) shall be held in Dallas, Texas.
(k) Entire Agreement. This 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. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter, including, but not limited to, the Prior Registration Rights
Agreement.
(l) Attorneys' Fees. In any proceeding brought to enforce
any provision of this Agreement the successful party shall be entitled to
recover reasonable attorneys' and accountants' fees in addition to its costs and
expenses and any other available remedy.
(m) Investor as Agent. (i) The Company acknowledges and
agrees that each of the Pecuniary Owners has initially appointed the Investor to
act as its agent and on its behalf in connection with the matters contemplated
by this Agreement. Until such time as the Company shall have received a written
notice from any Pecuniary Owner or the Investor that the Investor is no longer
acting as such Pecuniary Owner's agent hereunder, the Company shall be entitled
to rely on any instructions and notices received from the Investor on behalf of
Pecuniary Owner as if received from such Pecuniary Owner directly. The parties
hereto further acknowledge and agree that Investor shall act solely as agent for
and on behalf of the Pecuniary Owners in connection with the matters set forth
in this Agreement, and that the Investor shall not, under any circumstances,
have any liability to the Company in its individual capacity arising out of or
in connection with this Agreement or the transactions contemplated hereby.
(ii) In the event that any Pecuniary Owner shall at anytime
subsequent to the date hereof appoint a successor agent to the Investor in
connection with the matters set forth in this
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Agreement, such successor shall be entitled to, and to exercise on behalf of
such Pecuniary Owner, all of the rights and remedies provided for herein with
respect to the Investor or such Pecuniary Owner, as the case may be, and the
rights and remedies of such Pecuniary Owner hereunder shall not in any way be
modified, limited, delayed or impaired as a consequence of such appointment.
(iii) The provisions of Sections 5, 6 and of this Section
9(m) shall remain in full force and effect with respect to the Investor
notwithstanding any termination of the Investor's appointment as agent for and
on behalf of any or all of the Pecuniary Owners hereunder.
(iv) Reference herein to the Investor "holding" Registrable
Securities shall mean holding such securities, as agent for and on behalf of the
Pecuniary Owners.
(n) Representation of the Trust. The Trust hereby
represents and warrants to Investor that the rights granted to Investor
hereunder are pari passu to the registration rights granted by the Trust to each
of Praedium, the Xxxxxx Entities, USAA and DDR.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Registration Rights Agreement as of the date first written
above.
"COMPANY"
AMERICAN INDUSTRIAL PROPERTIES REIT
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
"INVESTOR"
LaSalle Advisors Limited Partnership,
as agent for and on behalf of its Pecuniary Owners
/s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Managing Director
ABKB/LaSalle Securities Limited Partnership,
as agent for and on behalf of its Pecuniary Owners
/s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Managing Director
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