REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of July 8, 1997, by and among American Industrial Properties
REIT, a Texas real estate investment trust (the "COMPANY"), MS Real Estate
Special Situations Inc., a Delaware corporation ("MSRE") and Xxxxxx Xxxxxxx
Asset Management Inc., a Delaware corporation ("MSAM"), acting as agent and
attorney-in-fact on behalf of the clients listed on Schedule A hereto (the
"MSAM PURCHASERS" and, together with MSRE, the "PURCHASERS").
WITNESSETH:
WHEREAS, pursuant to that certain Common Share Purchase Agreement,
dated as of June 20, 1997, among the Company, MSRE and MSAM, as agent for the
MSAM Purchasers (the "PURCHASE AGREEMENT"), the Purchasers, severally and not
jointly, agreed that they may purchase up to 8,163,265 Common Shares (the
"SHARES") of the Company (subject to the Share Ownership Limitation described
in the Purchase Agreement); and
WHEREAS, pursuant to the terms of the Purchase Agreement, the
Company, MSRE and MSAM agreed that the Company would grant certain
registration rights to the Purchasers 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.
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As used in this Agreement, the following capitalized terms shall
have the following meanings:
Closing Date: The closing date as defined in the Purchase
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Agreement.
Common Shares: The common shares of beneficial interest, $.10 par
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value per share, of the Company.
Exchange Act: The Securities Exchange Act of 1934, as amended from
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time to time.
Participating Purchasers: With respect to any Registration
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Statement, any Purchasers holding any Registrable Securities covered by such
Registration Statement.
Person: An individual, partnership corporation, limited liability
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company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
Preemptive Rights: See the Purchase Agreement.
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Prospectus: The prospectus included in any Registration Statement,
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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: See the Recitals to this Agreement.
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Registrable Securities: (a) The Shares, (b) any securities issued
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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 any Purchaser 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.
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Registration Statement: The Registration Statement of the Company
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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.
Requesting Purchasers: Any one or more Purchasers holding
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Registrable Securities representing in the aggregate not less than 25% of the
aggregate Registrable Securities outstanding.
SEC: The Securities and Exchange Commission or any successor
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entity.
Securities Act: The Securities Act of 1933, as amended from time
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to time.
Share Ownership Limitation: The limitation on ownership contained
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in Section 2.4 of the Purchase Agreement.
Shares: See the Recitals to this Agreement.
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Shelf Registration: See Section 2(a) hereof.
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Underwritten Registration or Underwritten Offering: A registration
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in which securities of the Company are sold to an underwriter for reoffering
to the public.
2. Registration Rights.
(a) Shelf Registration. Upon the written request of one or more
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Requesting Purchasers that the Company effect the registration under the
Securities Act of such Requesting Purchasers' Registrable Securities pursuant
to a "shelf" registration statement, the Company promptly will give written
notice of such requested registration to all other Purchasers, and will
thereafter 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 (i) the Registrable Securities that the Company has been so requested
to register by such Requesting Purchasers and (ii) all other Registrable
Securities that the Company has been requested to register by any other
Purchasers by written request given to the Company within 15 days after the
Company's giving of written notice of the Requesting Purchasers' requested
registration.
The Company hereby agrees to file such registration statement as
promptly as practicable following the request therefor, and in any event
within 60 days following the date such request is received by the Company,
and thereafter to use its commercially reasonable efforts to cause such Shelf
Registration to become effective and thereafter to keep it continuously
effective, and to prevent the happening of any event of the kind described in
Section 4(c)(3), (4), (5) or (6) hereof that requires the Company to give
notice pursuant to the last paragraph of Section 4 hereof, for a period
terminating on the third year anniversary of the date on which the SEC
declares the Shelf Registration effective, or such shorter period as shall
terminate on the date on which all the Registrable Securities covered by the
Shelf Registration have been sold pursuant to such Shelf Registration. The
Company shall be obligated to file only one Shelf Registration and shall not
be obligated to file a Shelf Registration if three Demand Registrations
(hereinafter defined) have been effected under Section 2(b).
The Company further agrees to promptly supplement or make amendments to
the Shelf Registration, if required by the rules, regulations or instructions
applicable to the registration form utilized by the Company or by the
Securities Act or rules and regulations thereunder for shelf registration or
if requested by Participating Purchasers 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 Participating Purchasers holding in the aggregate in excess of 50% of
the Registrable Securities covered by the Shelf Registration so elect, 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
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following the Closing Date, one or more Requesting Purchasers may make a
written request (the "DEMAND NOTICE") for registration under the Securities
Act (a "DEMAND REGISTRATION") of the Registrable Securities held by such
Requesting Purchasers. 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 such Requesting Purchasers, the Company promptly will give written
notice of the requested registration to all other Purchasers, and will
thereafter file a registration statement on any appropriate form which will
cover (i) the Registrable Securities that the Company has been so requested
to register by such Requesting Purchasers and (ii) all other Registrable
Securities that the Company has been requested to register by any other
Purchasers by written request given to the Company within 15 days after the
Company's giving of written notice of the Requesting Purchasers' requested
registration.
Unless each Participating Purchaser shall consent in writing, no party
(including the Company) other than any Purchaser, USAA Real Estate Company
("REALCO") or La Salle Advisory Limited Partnership ("LASALLE") 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
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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). Participating Purchasers 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 Participating Purchasers holding in the aggregate in excess of 50% of
the Registrable Securities covered by the Demand Registration so elect, 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 Participating
Purchasers in writing that in their opinion the number of Registrable
Securities and shares of Realco or LaSalle, 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 LaSalle,
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
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or LaSalle, if any, may be excluded before all shares proposed to be
sold by any 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 each Participating Purchaser and the number of shares of Realco or
LaSalle, 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 of securities 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
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period following the Closing Date, the Company proposes to file a
registration statement under the Securities Act (other than in connection
with the Shelf Registration, a Demand Registration or 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 all Purchasers as soon as practicable (but in no event less than thirty
days before the anticipated filing date), and such notice shall (i) offer
each Purchaser 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). Each Purchaser 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
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underwriters of such offering deliver a written opinion to each Participating
Purchaser that either because of (i) the kind of securities which such
Purchasers, the Company, or any other Persons intend to include in such
offering or (ii) the size of the offering which such Purchasers, 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 each Participating Purchaser
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 Registrable Securities will be excluded from such
offering.
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.
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(a) Restrictions on Public Sale by Holder of Registrable
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Securities. Each Purchaser agrees, if reasonably requested by the managing
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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
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Company agrees not to effect, for its own account or for the account of any
of its security holders, 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 each Purchaser participating
in such registration statement consents, (y) where any Purchasers are
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 no Purchasers are simultaneously
participating in a registration statement pursuant to Section 2(b) hereof, or
(z) with respect to Realco or LaSalle, where 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
registr1ation statement.
4. Registration Procedures. In connection with the Company's
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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
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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 each
Participating Purchaser and the underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to the review
of the Participating Purchasers 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 Participating Purchasers 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 any Participating Purchaser 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
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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 each Participating Purchaser 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;
(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 Participating Purchasers 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 such
Participating Purchasers 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 each Participating Purchaser 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 each Participating Purchaser 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 any such Purchasers 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 each Participating Purchaser, 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 any
Participating Purchaser 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 Participating Purchasers 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 each
Participating Purchaser or the underwriters, if any, to consummate the
disposition of such Registrable Securities;
(k) upon the occurrence of any event contemplated by Section
4(c)(6) above, prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities, the
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading;
(l) cause all Registrable Securities covered by the Registration
Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed;
(m) enter into such agreements (including an underwriting
agreement) and take all such other actions in connection therewith in order
to expedite or facilitate the disposition of such Registrable Securities and
in connection therewith, whether or not an underwriting agreement is entered
into and whether or not the registration is an Underwritten Registration, (1)
make such representations and warranties to each Participating Purchaser 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
each Participating Purchaser 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 any
Participating Purchaser and the underwriters, if any; (3) obtain "cold
comfort" letters and updates thereof from the Company's independent certified
public accountants addressed to each Participating Purchaser 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 any
Participating Purchaser 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 any
Participating Purchaser, any underwriter participating in any disposition
pursuant to such registration, and any attorney or accountant retained by any
Participating Purchaser 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,
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information or documents that the Company designates in writing as
confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents is required by court or administrative
order;
(o) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering a period of 12 months, beginning within three months after
the effective date of the registration statement, which earnings statement
shall satisfy the provisions of section 11(a) of the Securities Act; and
(p) cooperate with the Participating Purchasers 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 each Purchaser 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.
Each Purchaser 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, such Purchaser will forthwith
discontinue disposition of Registrable Securities until such Purchaser'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, such
Purchaser will deliver to the Company (at the Company's expense), all copies,
other than permanent file copies then in such Purchaser'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 such
Purchaser 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
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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 Purchasers 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 Purchasers 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 Company shall also
reimburse MSAM 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 $50,000.
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 MSAM or any of the Purchasers,
except as expressly provided herein.
6. Indemnification: Contribution.
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(a) Indemnification by Company. The Company agrees to indemnify
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and hold harmless MSAM and each Purchaser 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 MSAM or such Purchaser, 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 MSAM and each Purchaser, if requested.
(b) Indemnification By Holder of Registrable Securities. Each
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Purchaser, 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 such Purchaser to the
Company specifically for inclusion in such Registration Statement or
Prospectus. In no event shall the liability of any Purchaser hereunder be
greater in amount than the dollar amount of the proceeds received by such
Purchaser 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
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to indemnification hereunder will (i) give prompt notice 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
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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 no Purchaser shall be required to contribute
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an amount greater than the dollar amount of the proceeds received by such
Purchaser 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 Purchasers 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
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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 any
Purchaser, 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 any Purchaser may reasonably request, all to the
extent required from time to time to enable each Purchaser 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
any Purchaser, the Company will deliver to such Purchaser 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 Participating
Purchasers 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
Purchasers hereunder without the written consent of MSAM, other than
registration rights granted on the same terms as herein with respect to the
shares purchased, or to be purchased, by LaSalle pursuant to authority
granted to the Company by its shareholders at the Annual Meeting. 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. The Company hereby represents and warrants to each
Purchaser that it has obtained all necessary consents or waivers of Realco in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby.
(c) MSAM as Agent. (i) The Company, MSRE, MSAM and each of the
-------------
MSAM Purchasers acknowledge and agree that each of the MSAM Purchasers has
initially appointed MSAM to act as its agent and attorney-in-fact in
connection with the matters contemplated by this Agreement. Until such time
as the Company shall have received a written notice from any MSAM Purchaser
that MSAM is no longer acting as such Purchaser's agent hereunder, the
Company shall be entitled to rely on any instructions and notices received
from MSAM on behalf of such Purchaser as if received from such Purchaser
directly. The parties hereto further acknowledge and agree that MSAM shall
act solely as agent on behalf of the MSAM Purchasers in connection with the
matters set forth in this Agreement, and that MSAM 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) The Company agrees that for so long as MSAM shall act as agent
on behalf of any of the MSAM Purchasers hereunder, it shall deliver to MSAM
copies of all documents and notices required to be delivered to the
Participating Purchasers pursuant to Section 4 of this Agreement.
(iii) In the event that any MSAM Purchaser shall at anytime
subsequent to the date hereof appoint a successor agent to MSAM in connection
with the matters set forth in this Agreement, such successor shall be
entitled to, and to exercise on behalf of such MSAM Purchaser, all of the
rights and remedies provided for herein with respect to MSAM or such MSAM
Purchaser, as the case may be, and the rights and remedies of such MSAM
Purchaser hereunder shall not in any way be modified, limited, delayed or
impaired as a consequence of such appointment.
(iv) The provisions of Sections 5, 6 and of this Section 9(c) shall
remain in full force and effect with respect to MSAM notwithstanding any
termination of MSAM's appointment as agent on behalf of any or all of the
MSAM Purchasers hereunder.
(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, each
Purchaser and, for so long as MSAM shall act as agent on behalf of any of the
MSAM Purchasers, MSAM; provided, that the provisions of Sections 5, 6, and
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9(c) may not, under any circumstances and notwithstanding any termination of
MSAM's appointment as agent on behalf of any or all of the MSAM Purchasers
hereunder, be amended, modified, supplemented or waived without the written
consent of MSAM.
(e) Notices. All notices and other communications provided for
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or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or air courier guaranteeing overnight delivery:
(i) if to MSAM, MSRE or any of the MSAM Purchasers, initially
at 1221 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx Xxxxx, and thereafter at such other
address as may be designated from time to time by notice given in
accordance with the provisions of this Section 9(e).
(ii) if to the Company, initially at 0000 Xxxxxxxx Xxxx, Xxxxx
000 Xxxxxx, Xxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxxx,
President and Chief Executive Officer, and thereafter at such other
address as may be designated from time to time by notice given in
accordance with the provisions of this Section 9(e).
(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 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 NEW YORK,
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 New York, New
York 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.
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: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
"MSRE"
MS REAL ESTATE SPECIAL SITUATIONS INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxx X. Xxxxx
President
"MSAM"
XXXXXX XXXXXXX ASSET MANAGEMENT INC.,
as agent and attorney-in-fact
on behalf of the MSAM Purchasers
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxx X. Xxxxx
Managing Director
SCHEDULE A
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MSAM Purchasers
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Stichting Pensioenfonds ABP
Stichting Bedrijfspensioenfonds voor de Metaalnijverheid
Xxxxxx Xxxxxxx Real Estate Special Situations Fund II, X.X.
Xxxxxx Xxxxxxx Real Estate Special Situations Fund I, L.P.
