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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 16, 1998
AMERICAN INDUSTRIAL PROPERTIES REIT
(Exact Name of Registrant as Specified in Charter)
TEXAS 1-9016 75-6335572
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(State or Other Jurisdiction of (Commission File (I.R.S. Employer
Incorporation or Organization) Number) Identification Number)
6210 N. Beltline Road, Suite 170, Irving, Texas 75063
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (972) 756-6000
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On September 16, 1998, American Industrial Properties REIT, a Texas
real estate investment trust (the "Trust"), and Developers Diversified Realty
Corporation, an Ohio corporation ("DDR"), entered into Amendment No. One
("Amendment No. One") to the Share Purchase Agreement, dated as of July 30,
1998, between the Trust and DDR.
A copy of Amendment No. One is filed as an exhibit to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
*10.1 Amendment No. One, dated as of September 14, 1998, to the
Share Purchase Agreement, dated as of July 30, 1998, between
the Trust and DDR.
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* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN INDUSTRIAL PROPERTIES REIT
/s/ Marc A. Simpson
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Marc A. Simpson
Senior Vice President and
Chief Financial Officer,
Secretary and Treasurer
Dated: September 16, 1998
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EXHIBIT LIST
<TABLE>
<S> <C>
*10.1 Amendment No. One, dated as of September 14, 1998, to the Share
Purchase Agreement, dated as of July 30, 1998, between the
Trust and DDR.
</TABLE>
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* Filed herewith
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EXHIBIT 10.1
AMENDMENT NO. ONE
TO
SHARE PURCHASE AGREEMENT
THIS AMENDMENT NO. ONE TO SHARE PURCHASE AGREEMENT (this "Amendment"),
dated as of September 14, 1998, is made between American Industrial Properties
REIT, a Texas real estate investment trust (the "Trust"), and Developers
Diversified Realty Corporation, an Ohio corporation ("Buyer"). Except as
otherwise indicated, capitalized terms used but not defined herein have the
meanings ascribed to them in the Share Purchase Agreement dated as of July 30,
1998 between the Trust and Buyer (the "Purchase Agreement").
RECITALS:
WHEREAS, Buyer and the Trust entered into the Purchase Agreement to
provide for the purchase and sale of Trust Common Shares and to establish
various rights and obligations in connection with the Purchase Agreement and the
Merger Agreement;
WHEREAS, Buyer and the Trust desire to amend the Purchase Agreement in
order to modify the rights and obligations described in the Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereby agree as follows:
1. Amended and Restated Section 6.3(b). Section 6.3(b) of the
Purchase Agreement is hereby deleted and the following Section 6.3(b) is hereby
substituted therefor:
"(b) Subject to Section 6.3(g), at any meeting of the shareholders of
the Trust thereafter held to elect Managers, Buyer is entitled to nominate
four Managers to the Board of Managers, including the Chairman of the Board
of Managers, and Buyer's right to nominate Managers to the Board of Managers
will continue, based on its ownership of the Purchased Shares, as follows:
(i) so long as Buyer holds a number of Trust Common Shares that is equal to
or greater than 75% of the number of Buyer Shares, Buyer is entitled to
nominate four candidates for the Board of Managers, including the Chairman
of the Board; (ii) so long as Buyer holds a number of Trust Common Shares
that is less than 75%, but equal to or greater than 50%, of the number of
Buyer Shares, Buyer is entitled to nominate three candidates for the Board
of Managers, including the Chairman; (iii) so long as Buyer holds a number
of Trust Common Shares that is less than 50%, but equal to or greater than
25%, of the number of Buyer Shares, Buyer is entitled to nominate two
candidates for the Board of Managers; and (iv) if Buyer holds a number of
Trust Common Shares that is less than 25% of the number of Buyer Shares,
then Buyer's right to nominate Managers will terminate. The Trust shall
cause such nominees to be included in the slate of nominees recommended by
the Board of Managers to the Trust's shareholders for election as Managers,
and the Trust shall use its reasonable best efforts to cause the election of
such nominees."
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2. New Section 6.3(g). The following Section 6.3(g) is hereby added
to the Purchase Agreement:
"(g) Notwithstanding anything to the contrary in Section 6.3(b), if
Buyer has not purchased all of the Remaining Shares by the end of the fifth
Business Day after the expiration of the 180 Day Period (as defined in
Section 6.14) in accordance with Section 6.14 (so long as Buyer's failure to
purchase all or part of the Remaining Shares is not a result of the Trust's
failure to satisfy any condition precedent or to make any delivery required
by this Agreement that has not been waived, in which case this Section shall
not apply), then Buyer will be entitled to nominate a number of candidates
to the Board of Managers equal to the product of: (a) 10 or the number of
Managers that would constitute the authorized number of Managers, whichever
is lower, times (b) a fraction, the numerator of which is the sum of the
number of the Purchased Shares plus all Trust Common Shares purchased by
Buyer under Sections 6.7 and 6.15, and the denominator of which is the
number of Trust Common Shares then outstanding on a fully diluted basis,
with that product rounded down to the nearest whole number (the "Product").
In determining the Product, any outstanding Buyer Preferred Shares will be
treated as Purchased Shares when determining the numerator in clause (b) and
will be treated as Trust Common Shares when determining the denominator in
clause (b). If at any time the Product is less than the number of Buyer
representatives then serving on the Board of Managers, Buyer shall cause a
number of Buyer representatives to resign so that the number of Buyer
representatives is equal to the Product. If at any time the Product is less
than three, Buyer's right to nominate the Chairman of the Board of Managers
shall cease (subject to automatic renewal if the Product is thereafter three
or more) and Mr. Wolstein (or his successor if such successor was nominated
by Buyer) shall resign as Chairman of the Board of Managers. The Trust shall
cause Buyer's nominees to be included in the slate of nominees recommended
by the Board of Managers to the Trust's shareholders for election as
Managers, and the Trust shall use its reasonable best efforts to cause the
election of such nominees."
3. New Sections 6.6(e) and (f). The following Sections 6.6(e) and
(f) are hereby added to the Purchase Agreement:
"(e) Notwithstanding anything to the contrary in Section 6.6(a), after
the aggregate purchase price for the Additional Purchased Shares reaches
$100,000,000, the Additional Purchase Option is not exercisable on any date
on which: (i) the closing price per common share, without par value, of
Buyer (each, a "Buyer Common Share"), on the NYSE, as reported in The Wall
Street Journal for the last trading day prior to such date, was equal to or
less than $18.00, as adjusted for any share split, subdivision, combination,
merger, reclassification or share dividend related to the Buyer Common
Shares occurring at or before that date, or (ii) the aggregate value of the
Purchased Shares and all Trust Common Shares purchased by Buyer pursuant to
Sections 6.7 and 6.15, determined based upon the amount paid by Buyer for
such shares (with each Merger Share valued at $15.50 per share), exceeds ten
percent (10%) of Buyer's Market Capitalization as of the last trading day
prior to such date. "Buyer's Market Capitalization" means for any date (with
the value of Buyer's publicly-traded securities determined by reference to
the trading prices reported in The Wall
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Street Journal for the last trading day prior to such date when available
and, when not available, based upon a certificate of the chief financial
officer of Buyer who shall, in good faith, value such securities): (i) the
aggregate value of all of Buyer's equity securities then issued and
outstanding, including Buyer Common Shares, and Buyer's preferred and
convertible securities, determined on a fully-diluted basis, plus (ii) the
then outstanding aggregate principal amount of the indebtedness of Buyer and
any subsidiary of Buyer. The term of the Additional Purchase Option shall be
extended by one day for each day that the Additional Purchase Option cannot
be exercised because of the conditions contained in this Section 6.6(e).
(f) The purchase price of all Trust Common Shares and Buyer Preferred
Shares issued to Buyer pursuant to that certain unit repurchase agreement to
be entered into among Buyer, the Trust and each investor named on the
signature pages thereto related to the properties known as Tech 29 (the
"Unit Agreement"), will reduce the aggregate amount of the Additional
Purchase Option on a dollar for dollar basis. If Buyer would own, as a
result of any sale and purchase under the Unit Agreement, in excess of the
Threshold Amount, the Trust shall only sell Buyer Preferred Shares to Buyer
under the Unit Agreement at a price of $14.00 per Buyer Preferred Share."
4. New Section 6.14. The following Section 6.14 is hereby added to
the Purchase Agreement:
"Section 6.14 Funding at the Second Closing. (a) Notwithstanding
anything to the contrary in Section 2.2 or 2.3(b), at the Second Closing
Buyer is only obligated to purchase, and the Trust is only obligated to
sell, the number of Trust Common Shares that is equal to (i) the sum of (x)
the aggregate principal balance of and accrued interest on any loans then
outstanding under the Funding Option, and (y) the aggregate purchase price,
after subtracting the value of any debt financing, of all property
acquisitions listed on Schedule 6.12 of the Purchase Agreement that close
prior to the Second Closing or are approved, between the Initial Closing
Date and the Second Closing Date, by a majority of the Managers on the
executive committee of the Board of Managers of the Trust (the "Executive
Committee") that are not Affiliates of the seller of the property or of the
assignor that assigned its right to acquire such property to the Trust,
divided by (ii) $15.50; and it is a condition precedent to Buyer's
obligation to purchase Trust Common Shares under this paragraph that the
Trust shall have borrowed at least 35% of the aggregate purchase price of
each such acquisition from one or more third-party lenders. The Trust shall
initiate the sale and purchase at the Second Closing by delivering to Buyer
a certificate of the Chief Executive Officer of the Trust identifying the
applicable loan amounts, the properties to be acquired and the relevant
purchase price and debt financing information for each, and the number of
Trust Common Shares to be sold and purchased.
(b) From time to time beginning on the Second Closing Date and
ending on the date 180 days after the Second Closing Date (the "180 Day
Period"), Buyer agrees to purchase, and the Trust agrees to sell, at a price
of $15.50 per Trust Common Share, a number of Trust Common Shares that in
the aggregate, when added to the Trust Common
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Shares purchased pursuant to Section 6.14(a), does not exceed the total
number of the Remaining Shares, solely for the purpose of funding property
acquisitions approved by a majority of the members of the Executive
Committee that are not Affiliates of the seller of the property or of the
assignor that assigned its right to acquire such property to the Trust; but
it is a condition precedent to Buyer's obligation to purchase Trust Common
Shares under this paragraph that the Trust shall have borrowed at least 35%
of the aggregate purchase price of each acquisition approved by the
Executive Committee under this Section 6.14(a)(ii) from one or more
third-party lenders. The Trust shall initiate each such sale and purchase by
delivering to Buyer a certificate of the Chief Executive Officer of the
Trust identifying the property to be acquired and the relevant purchase
price and debt financing information therefor, and the number of Trust
Common Shares to be sold and purchased.
(c) If, as of the Business Day following the expiration of the 180 Day
Period, Buyer has not purchased all of the Remaining Shares at a price of
$15.50 per Trust Common Share, then Buyer has the option to purchase, and
the Trust agrees to sell upon the exercise of this option, a number of Trust
Common Shares that when added to the Trust Common Shares purchased pursuant
to Sections 6.14(a) and (b), equals the total number of the Remaining
Shares. Buyer may exercise this option only by providing notice of such
exercise to the Trust on or before the second Business Day after the
expiration of the 180 Day Period. Upon the exercise of this option, Buyer
shall purchase, and the Trust shall sell, all of the Trust Common Shares
covered by this option on the fifth Business Day after the expiration of the
180 Day Period. Each of the conditions precedent to the respective
obligations of the Trust and Buyer and each of the deliveries required to be
made at the Second Closing under this Agreement shall have been satisfied,
waived or made, as applicable, as of the date of purchase under this
paragraph as if such date were the Second Closing Date.
(d) Each of the conditions precedent to the respective obligations of
the Trust and Buyer and each of the deliveries required to be made at the
Second Closing under the Purchase Agreement shall have been satisfied,
waived or made, as applicable, as of the date of each purchase under Section
6.14 as if such date were the Second Closing Date."
5. New Section 6.15. The following Section 6.15 is hereby added to the
Purchase Agreement:
"Section 6.15 Open Market Purchases. Notwithstanding anything to the
contrary in this Agreement, Buyer may, from time to time, purchase Trust
Common Shares with an aggregate value (determined based on the price paid by
Buyer in each such transaction) that does not exceed $10,000,000 in one or
more open market transactions, which purchases will reduce the aggregate
amount of the Additional Purchase Option on a dollar for dollar basis after
the aggregate purchase price for the Additional Purchased Shares reaches
$100,000,000, but Buyer shall not make any such purchase if, as a result of
such purchase, Buyer would own in excess of the Threshold Amount. Buyer
covenants that all such purchases will be conducted in accordance with all
applicable federal and state securities laws."
6. Full Force and Effect. Except as expressly provided in this
Amendment, the
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Purchase Agreement shall continue in full force and effect in accordance with
the provisions thereof and, unless expressly stated otherwise herein, the terms
of the Purchase Agreement shall govern this Amendment.
7. Effective Date. This Amendment shall be effective as of the date
first set forth above and from and after such date all references to the
Purchase Agreement shall be deemed to refer to the Purchase Agreement as amended
by this Amendment.
8. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.
BUYER:
DEVELOPERS DIVERSIFIED REALTY CORPORATION,
an Ohio corporation
By: /s/ James A. Schoff
Name: James A. Schoff
Title: Chief Investment Officer
THE TRUST:
AMERICAN INDUSTRIAL PROPERTIES REIT, a Texas
real estate investment trust
By: /s/ Marc A. Simpson
Name: Marc A. Simpson
Title: Senior Vice President and Chief
Financial Officer
