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EXHIBIT 10.10
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made
and entered into as of July 10, 1997, by and among American Industrial
Properties REIT, a Texas real estate investment trust (the "COMPANY"), and
LaSalle Advisors Limited Partnership, a registered investment advisor (the
"Investor"), acting as agent for and on behalf of certain 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 (the "PURCHASE AGREEMENTS"), the
Investor, agreed that it may purchase up to 6,122,449 Common Shares (the
"SHARES") of the Company as agent for and on behalf of the Pecuniary Owners;
and
WHEREAS, pursuant to the terms of the Purchase Agreements, the
Company and the Investor agreed that the Company would grant certain
registration rights to the Investor with respect to the Shares;
NOW, THEREFORE, for 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
Agreements.
Common Shares: The common shares of beneficial interest, $.10
par value per share, of the Company.
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 Agreements.
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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 Agreements: 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 stock dividend or stock
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 Agreements) pursuant 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.
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.
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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) Registerable 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. Pursuant to this Section 2(a), the Investor,
upon execution hereof, is making a written request of the Company to file a
shelf registration statement on its behalf to register certain Registrable
Securities and the Company acknowledges that this provision shall constitute
the written request required hereby to initiate the filing of the shelf
registration statement pursuant to this Section 2(a). Investor agrees, during
the 10 day period following execution of this Agreement, to consider
withdrawing its request for registration in the preceding sentence. The Company
shall not be required to commence preparation of such shelf registration
statement until after expiration of such 10 day period. If the Investor does
not withdraw its request, the Company shall commence preparation of the shelf
registration statement.
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.
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.
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(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 such
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, USAA Real Estate Company ("Realco"), MS
Real Estate Special Situations Inc. ("MRSE") or certain clients of Xxxxxx
Xxxxxxx Asset Management Inc. who have purchased Common Shares of the Company
(such clients together with MRSE, the "Purchasers") 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 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 Realco or the Purchasers, 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 Realco or the Purchasers, 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 Registrable Securities or shares of Realco or the Purchasers,
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 more than 5% of 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 Realco or each Purchaser, 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
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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 thirty
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 specifying 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 twenty (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
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, be insufficient to substantially eliminate the adverse effect that
inclusion of the Registrable Securities requested to be included would have on
such offering, such
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Registrable Securities will be excluded from such offering. Notwithstanding the
foregoing, if the Investor exercises an incidental registration in connection
with Realco's or the Purchasers' demand registration rights, then the managing
underwriter's cutback provision under such demand registration right 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 Realco or the Purchasers, 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.
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
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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(1) hereof, if applicable;
(c) notify the Investor and the managing underwriters, if
any, promptly, 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 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 (n)
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;
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(d) make every reasonable effort to 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 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; 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;
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(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 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
10
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(1) 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(1) 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(1) hereof or the
Advice.
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(n) 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
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Company shall also reimburse the Investor for the fees and expenses of counsel
incurred in connection with the transactions contemplated in the Purchase
Agreement and the preparation of this Agreement, up to a maximum aggregate
amount of $25,000. 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 and 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 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, and each Pecuniary Owner, 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 (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
against any losses, claims, damages, liabilities and 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 to the
indemnifying party of any claim with
12
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 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 neither the Investor nor any Pecuniary Owner shall be required
to contribute an amount greater than the dollar amount of the proceeds received
by such Person 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 misrepresentations.
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
13
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.
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
on or 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 has
not previously entered into any agreement with respect to its securities
granting any registration rights to any Person, other than the Registration
Rights Agreement, dated as of December 19, 1996, between the Company and Realco
and the Registration Rights Agreement dated as of July 8, 1997, between the
Company and the Purchasers. The Company hereby represents and warrants to the
Investor that it has obtained all necessary consents or waivers of Realco and
the Purchasers in connection with the execution of this Agreement and the
consummation of the transactions contemplated hereby.
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(c) 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 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(c) 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.
(d) 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,
Pecuniary Owners and, for so long as the Investor shall act as agent for and on
behalf of any of the Pecuniary Owners, the Investor; provided, that the
provisions of Sections 5, 6, and 9(c) may not, under any circumstances and
notwithstanding any termination of the Investor's appointment as agent for and
on behalf of any or all of the Pecuniary Owners hereunder, be amended,
modified, supplemented or waived without the written consent of the Investor.
(e) Notices. The notice provisions contained in Section
12.11 of the Purchase Agreements shall be incorporated herein and shall be
governing under this Agreement.
(f) 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.
(g) 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
15
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) 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
MARYLAND, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
(j) 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(j).
(k) 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(k) shall be held in Baltimore,
Maryland in the first instance, in Dallas, Texas in the second instance, and
continuing in that order with respect to each dispute occurring hereunder.
(l) 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.
In any proceeding brought to enforce any provision of this Agreement
the successful party shall be entitled to recover reasonable attorneys' fees in
addition to its costs and expenses and any other available remedy.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
"COMPANY"
AMERICAN INDUSTRIAL PROPERTIES REIT
By:
-------------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
"INVESTOR"
LaSalle Advisors Limited Partnership
as agent for and on behalf of the
Pecuniary Owners
----------------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Managing Director
