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EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT
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.
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, $.10
par value per share, of the Company.
Exchange Act: The Securities Exchange Act of 1934, as amended
from time to time.
Participating Purchasers: With respect to any Registration
Statement, any Purchasers holding any Registrable Securities covered by such
Registration Statement.
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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.
Preemptive Rights: See the Purchase Agreement.
Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
Purchase Agreement: See the Recitals to this Agreement.
Registrable Securities: (a) The Shares, (b) any securities
issued or issuable with respect to the Shares by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise and (c) any additional
Common Shares of the Company purchased by 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.
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.
Requesting Purchasers: Any one or more Purchasers holding
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
entity.
Securities Act: The Securities Act of 1933, as amended from
time to time.
Share Ownership Limitation: The limitation on ownership
contained in Section 2.4 of the Purchase Agreement.
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Shares: See the Recitals to this Agreement.
Shelf Registration: See Section 2(a) hereof.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Registration Rights.
(a) Shelf Registration. Upon the written request of one
or more 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.
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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 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 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 or LaSalle, if any,
may
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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 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
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
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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.
(a) Restrictions on Public Sale by Holder of Registrable
Securities. Each Purchaser 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, 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
registration obligations pursuant to Section 2 hereof, the Company will use its
commercially reasonable efforts to effect such
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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 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 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
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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;
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(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;
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(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,
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 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
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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.
(a) Indemnification by Company. The Company agrees to
indemnify 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 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,
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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 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 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
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the indemnifying party, as well as any other relevant equitable considerations,
provided, that no Purchaser shall be required to contribute 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 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
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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.
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(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
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 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.
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(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
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"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
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SCHEDULE A
MSAM Purchasers
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.
