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EXHIBIT 10.6
FIRST AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This First Amended and Restated Registration Rights Agreement
(the "AGREEMENT") is made and entered into as of July 30, 1998, by and between
American Industrial Properties REIT, a Texas real estate investment trust (the
"COMPANY"), and Praedium II Industrial Associates LLC, a Delaware limited
liability company (the "Investor").
WITNESSETH:
WHEREAS, pursuant to certain Common Share Purchase Agreement,
dated as of January 29, 1998, between the Company and the Investor (the
"PURCHASE AGREEMENT"), the Investor purchased 733,945 Common Shares (the
"SHARES") of the Company;
WHEREAS, pursuant to the terms of the Purchase Agreement, the
Company and the 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 a
Registration Rights Agreement dated as of 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 the 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.
Exchange Act: The Securities Exchange Act of 1934, as amended
from time to time.
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Person: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
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 and (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. 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, the Company will file 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 the Registrable Securities that the Company has been so
requested to register by the Investor.
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.
If the Investor 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 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 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"), LaSalle Advisors Limited Partnership
acting as agent for and on behalf of certain clients ("LaSalle"), or
ABKB/LaSalle Securities Limited Partnership ("ABKB" and together with LaSalle,
the "LaSalle Entities") shall be
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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 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 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 the
LaSalle Entities, 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 the
LaSalle Entities, 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
DDR, Realco, the Xxxxxx Entities or the LaSalle Entities, 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 the LaSalle Entities, 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
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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 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 LaSalle Entities' 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.
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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 the LaSalle Entities, 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 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 or
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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 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, 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
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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 (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;
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(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 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 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
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(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 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.
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
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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 its 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 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 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
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 to the Company specifically for
inclusion in such Registration Statement or Prospectus. In no event shall the
liability of the Investor 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
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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 in no event shall the Investor 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 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
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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; 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 hereby
represents and warrants to the Investor that it has obtained all necessary
consents or waivers of Realco, the Xxxxxx Entities and the LaSalle Entities 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.
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(d) Notices. The notice provisions contained in Section 9.11
of the Purchase Agreements 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.
(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.
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This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
(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) 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 the Xxxxxx
Entities, the LaSalle Entities, USAA and DDR.
IN WITNESS WHEREOF, the parties hereto have executed this First 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"
By: PRAEDIUM II INDUSTRIAL ASSOCIATES LLC,
a Delaware limited liability company
By: THE PRAEDIUM OPPORTUNITY FUND II, L.P.,
its member
By: PRAEDIUM ADVISORS, INC., its managing
general partner
By: /s/ Xxxxxxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxxxxxx Xxxxxx
-----------------------------
Title: Vice President
----------------------------
By: PRAEDIUM PARTNERS, LLC, its investment
general partner
By: /s/ Xxxxxxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxxxxxx Xxxxxx
-----------------------------
Title: Vice President
----------------------------
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