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EXHIBIT 99.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of October 3, 1997, by and among American Industrial Properties
REIT, a Texas real estate investment trust (the "Company"), and AG Industrial
Investors, L.P., a Delaware limited partnership (the "Investor").
WHEREAS, the Company, AIP-SWAG Operating Partnership, L.P., a Delaware
limited partnership (the "Operating Partnership"), and ▇▇▇▇▇▇▇ West Investment
Corporation ("▇▇▇▇▇▇▇ West"), acting on behalf of the Investor and ▇▇▇▇▇▇▇
West Acquisition Company, LLC, have entered into a Contribution and Exchange
Agreement, dated as of September 25, 1997 (the "Contribution Agreement"),
pursuant to which, among other things, the Operating Partnership agreed to
acquire the right to purchase certain real property from ▇▇▇▇▇▇▇ West;
WHEREAS, pursuant to the Contribution Agreement, the Operating
Partnership has agreed to issue to the Investor (i) 447,712.5 units of limited
partnership interest of the Operating Partnership (the "Units"), which will be
convertible into 447,712.5 shares (the "Converted Shares") of beneficial
interest, par value $.10 per share, of the Company (the "Common Shares"), and
(ii) a warrant to purchase up to an aggregate amount of 100,000 Common Shares
(the "Warrant Shares," and together with the Converted Shares, the "Shares");
and
WHEREAS, pursuant to the terms of the Contribution Agreement, the
Company and the Investor agreed that the Company would grant certain
registration rights to the Investor;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Certain Definitions.
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Closing Date: The closing date as defined in the Contribution
Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Person: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
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Registrable Securities: (a) The Shares and (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. 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 has been sold pursuant to
Rule l44 or any other valid exemption from registration; 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 by the holder thereof
without subsequent registration under the Securities Act.
Registration Statement: A 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 or Prospectus, including
post-effective amendments, all exhibits and all material incorporated by
reference in such Registration Statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission or any successor
entity.
Securities Act: The Securities Act of 1933, as amended.
Underwritten Registration or Underwritten Offering: A
registration under the Securities Act in which securities of the Company are
sold to an underwriter for reoffering to the public.
2. Demand Registration.
(a) Requests for Registration. At any time after the second
anniversary (the first anniversary with respect to the Warrant Shares) of the
Closing Date, the Investor may make a written request (the "Demand Notice") for
registration under the Securities Act (a "Demand Registration") of the number
of Registrable Securities requested to be registered pursuant to the terms of
this Agreement. The Demand Notice will specify the number of shares of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. Following receipt of a Demand Notice from the
Investor, the Company promptly will file a Registration Statement on any
appropriate form that will cover the Registrable Securities that the Company
has been so requested to register by the Investor.
The Company shall not be required to effect more than one Demand
Registration under this Section 2. A registration requested pursuant to this
Section 2 will not be deemed to have been effected 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,
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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.
If the Investor requests that a Demand Registration be a "shelf"
registration pursuant to Rule 415 under the Securities Act, the Company shall
file the Demand Registration under Rule 415 and shall keep the Registration
Statement filed in respect thereof effective for a period that will terminate
on the earlier of (i) 180 days from the date on which the SEC declares such
Registration Statement effective and (ii) the date on which all Registrable
Securities covered by such Registration Statement have been sold pursuant to
such Registration Statement; provided that such 180 day period shall be tolled
during the period that the Investor is required to discontinue disposition of
Registrable Securities pursuant to the last paragraph of Section 4.
(b) Additional Shares. The parties agree that any
Registration Statement may register shares that are not Registrable Securities,
but (i) are proposed to be sold by the Company or (ii) are Common Shares held
by other Persons, or to be issued to other Persons, and subject to registration
rights.
(c) Priority on Registration. If any of the Registrable
Securities registered pursuant to a Demand Registration are to be sold in an
Underwritten Offering, and the managing underwriter or underwriters of such
offering advise the Company and the Investor in writing that in their opinion
the total number of shares or dollar amount of Registrable Securities proposed
to be sold 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 or dollar amount of Registrable Securities
that in the opinion of such managing underwriter or underwriters can be sold
without any such material adverse effect; provided, however, that no
Registrable Securities, if any, may be excluded before all shares proposed to
be sold by other parties, including the Company, have been excluded. If any
Registrable Securities are excluded, such registration shall not count as one
of the two Demand Registrations.
(d) Postponement of Registration. The Company shall be
entitled to postpone, for a reasonable period of time not in excess of 90 days
during any 365-day period, the filing of a Registration Statement if the
Company determines, in the good faith exercise of its reasonable business
judgment, that such registration and offering could adversely affect or
interfere with bona fide financing plans of the Company or any of its
affiliates or would require disclosure of information, the premature disclosure
of which could adversely affect the Company or any transaction under
consideration by the Company.
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3. Piggyback Registration
(a) Right to Piggyback. If at any time the Company proposes
to file a registration statement under the Securities Act with respect to an
offering of Common Shares (other than a registration statement (i) on Form S-4
or Form S-8 or any successor forms thereto or to register for resale any
securities awarded pursuant to an unregistered offering to the Company's
employees or Trust Managers, or to employees of its subsidiaries, pursuant to
any employee benefit plan (as defined in Rule 405 under the Securities Act),
(ii) in connection with an exchange offer, or (iii) in connection with the
acquisition of assets by the Company, the Operating Partnership or any of their
affiliates), whether or not for its own account, then the Company shall give
written notice of such proposed filing to the Investor at least 30 days before
the anticipated filing date. Such notice shall offer the Investor the
opportunity to register such amount of Registrable Securities as the Investor
may request (a "Piggyback Registration"). Subject to Section 3(b) hereof, the
Company shall include in each such Piggyback Registration all Registrable
Securities with respect to which the Company has received a written request for
inclusion therein within 10 days after notice has been given to the Investor
(which request shall specify the intended method of distribution). The
Investor shall be permitted to withdraw all or part of the Registrable
Securities from a Piggyback Registration at any time prior to the effective
date of such Piggyback Registration. The Company shall not be required to
effect more than two Piggyback Registrations under this Section 3.
(b) Priority on Piggyback Registrations. The Company shall cause the
managing underwriter of a proposed Underwritten Offering to include all such
Registrable Securities on the same terms and conditions as any other Common
Shares, if any, of the Company included therein. Notwithstanding the
foregoing, if the managing underwriter of such Underwritten Offering delivers
an opinion to the Investor that the total number or dollar amount of securities
that the Investor, the Company and other Persons having rights to participate
in such registration, propose to include in such offering is such as to
materially and adversely affect the success of such offering, then the amount
of Common Shares to be offered (i) for the account of Investor and (ii) for the
account of all such other Persons (other than the Company) shall be reduced or
limited pro rata in proportion to the respective dollar amounts of Common
Shares requested by such persons to be included in such offering.
4. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holder of Registrable
Securities. So long as the Investor holds Registrable Securities, the Investor
agrees, in connection with any sale of securities by the Company and in
connection with any Registration Statement filed pursuant to Section 2 or 3, if
requested by the Company or the managing underwriters in an Underwritten
Offering, not to effect any public sale or distribution of securities of the
Company, including a sale pursuant to Rule 144 (except as part of such
Underwritten Offering), during the 10-day period prior to, and during the
90-day period beginning on, the closing date of each offering made by the
Company or pursuant to such Registration Statement, to the extent timely
notified in writing by the Company or the managing underwriters; provided that
such restrictions shall not be more restrictive in duration or scope than
restrictions imposed on (i) any Person which has been granted registration
rights by the Company (other than the "Majority Shareholders"), (ii) any
officer or director of the
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Company or (iii) any 5% holder of Common Shares of the Company (other than the
"Majority Shareholders").
(b) Restrictions on Sale of Securities by the Company. So
long as the Investor holds Registrable Securities, the Company agrees that,
without the written consent of the managing underwriter or underwriters in an
Underwritten Offering of Registrable Securities covered by a Registration
Statement filed pursuant to Section 2 or 3, not to effect any public sale or
distribution of any securities similar to those being registered, or any
securities convertible into or exchangeable or exercisable for such securities
during the 10-day period prior to, and the 90-day period beginning on, the
closing date of each Underwritten Offering (except (w) as part of such
Underwritten Offering, (x) pursuant to registrations on Form S-4 or Form S-8
or any successor form to such forms or to register for resale any securities
awarded pursuant to an offering to the Company's employees or Trust Managers,
or to employees of its subsidiaries, pursuant to any employee benefit plan (as
defined in Rule 405 under the Securities Act), (y) in connection with an
exchange offer or (z) in connection with the acquisition of assets by the
Company, the Operating Partnership or any of their affiliates).
5. Registration Procedures. In connection with the Company's
registration obligations pursuant to Section 2 or 3 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, a
Registration Statement relating to the applicable registration on any
appropriate form under the Securities Act that shall be available for the sale
of the Registrable Securities in accordance with the intended method or methods
of distribution thereof, and use its commercially reasonable efforts to cause
such Registration Statement to become effective; provided that before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
including documents incorporated by reference after the initial filing of the
Registration Statement, the Company will furnish the Investor and the
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of the Investor and the underwriters,
if any; provided, further, that the Company shall not be required to deliver to
the Investor or the underwriters a copy of any such document that has not been
materially changed from a copy of such document that was previously delivered
to the Investor and the underwriters. The Company will not file any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto (including such documents incorporated by reference) to which the
Investor or the underwriters, if any, shall reasonably object, in writing, on a
timely basis, unless, in the opinion of the Company, such filing is necessary
to comply with applicable law;
(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
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supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 under the Securities Act;
(c) notify the Investor and the managing underwriters, if any,
promptly, and (if requested by any such Person) confirm such advice in writing,
(l) when the Registration Statement, 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 thereto, 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 (provided that the Company shall not be required to notify the
Investor of all "comment" letters received by the Company from the SEC or to
deliver copies of such comment letters or the Company's responses thereto to
the Investor unless such letters request information from or about the
Investor), (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 Section 5(m)(1) 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 in any material respect or that
requires the making of any changes in the Registration Statement, the
Prospectus or any document incorporated therein by reference so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that,
in the case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(d) obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement;
(e) if requested by the managing underwriter or underwriters
or by the Investor, promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
managing underwriters and the Investor reasonably request in order to permit
the intended method of distribution of such securities and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after the Company has received such request; provided, however,
that the Company shall not be required to take any actions under this Section
5(e) that are not in compliance with applicable law;
(f) furnish to the Investor and each managing underwriter, if
any, without charge, at least one signed copy of the Registration Statement and
any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(g) deliver to the Investor and the underwriters, if any,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement
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thereto as such Persons may reasonably request; the Company consents to the use
of the Prospectus (including each preliminary prospectus) or any amendment or
supplement thereto by the Investor and the underwriters, if any, in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities,
register or qualify or cooperate with the Investor, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as
the Investor or any underwriter reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the Registration
Statement; provided, however, that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it not then so
qualified or (B) take any action that would subject the Company to general
service of process or to taxation in any such jurisdiction where it is not then
so subject;
(i) cooperate with the Investor and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters may request at least two
business days prior to any sale of Registrable Securities to the underwriters;
(j) cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the Investor
or the underwriters, if any, to consummate the disposition of such Registrable
Securities;
(k) upon the occurrence of any event contemplated by Section
5(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 required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, 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 in form, scope and substance as is customary in underwritten
offerings) and take all such other actions reasonably requested by the Investor
or the managing underwriter or underwriters, if any, in order to expedite or
facilitate the disposition of such Registrable Securities and in connection
therewith, whether or not an underwriting agreement is entered into and whether
or not the registration is an Underwritten Registration, (1) make such
representations and warranties to the Investor, and the underwriters, if any,
in form, substance and scope as are customarily made by issuers to underwriters
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in primary underwritten offerings; (2) obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Investor and the managing
underwriters, if any, covering the matters customarily covered in opinions
requested in Underwritten Offerings and such other matters as may be reasonably
requested by the Investor and the underwriters, if any; (3) obtain "cold
comfort" letters and updates thereof from the Company's independent certified
public accountants addressed to the Investor and the underwriters, if any, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters by underwriters in connection with primary
Underwritten Offerings (unless such accountants shall be prohibited from so
addressing such letters by applicable standards of the accounting profession);
(4) if an underwriting agreement is entered into, the same shall contain the
indemnification provisions and procedures substantially to the effect set forth
in Section 7 hereof with respect to all parties to be indemnified pursuant to
said Section; and (5) deliver such documents and certificates as may be
reasonably requested by the Investor and the managing underwriters, if any, to
evidence compliance with clause (1) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company. The above shall be done at each closing under such underwriting or
similar agreement or as and to the extent required thereunder;
(n) make available for inspection by a representative of the
Investor, any underwriter participating in any disposition pursuant to such
registration, and any attorney or accountant retained by the Investor or any
underwriter, at the offices where normally kept, during reasonable business
hours, 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. Without limiting the foregoing, no
such information shall be used by such Person as the basis for any market
transactions in securities of the Company or its subsidiaries in violation of
law;
(o) otherwise 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 Investor and each underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD").
The Company may require the Investor to furnish to the Company such
information regarding the distribution of Registrable Securities as the Company
may from time to time reasonably request in writing, and the Company may
exclude from such registration the Registrable Securities of the Investor if it
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
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The Investor agrees by acquisition of the Registrable Securities that,
upon receipt of any notice from the Company of the happening of any event of
the kind described in Section 5(c) (2), 5(c)(3), 5(c)(5) and 5(c)(6) hereof,
the Investor will forthwith discontinue disposition of Registrable Securities
until the Investor's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5(k) hereof, or until it is advised in
writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed by the
Company, the Investor will deliver to the Company (at the Company's expense),
all copies, other than permanent file copies then in the Investor's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
6. Registration Expenses. All reasonable expenses incident
to the Company's performance of or compliance with this Agreement, including,
without limitation, all registration and filing fees; fees with respect to
filings required to be made with the NASD; fees and expenses of compliance with
securities or blue sky laws (including fees and disbursements of counsel for
the underwriters or the Investor in connection with blue sky qualifications of
the Registrable Securities pursuant to Section 5(h)); printing expenses;
messenger, telephone and delivery expenses; fees and disbursements of counsel
for the Company; reasonable fees and disbursements of counsel for the Investor
up to $5,000 ; 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 5(m)(3) 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 will be borne by the Company regardless of
whether the Registration Statement becomes effective. The Company shall not
have any obligation to pay (i) any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities, (ii) any legal fees and
expenses of counsel to the Investor or underwriters, except as expressly
provided herein, or (iii) any fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Section 3 of Schedule E to the By-laws of the NASD.
7. Indemnification: Contribution.
(a) Indemnification by Company. The Company agrees to
indemnify and hold harmless the Investor and its partners, officers, directors,
employees and agents, and each Person who controls any such Persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
(collectively, the "Investor") against all losses claims, damages, liabilities
and expenses (collectively, "Losses") arising out of or based upon any untrue
or alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished in writing to the
Company by the Investor
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expressly for use therein; provided, however, that the Company shall not be
liable to the Investor to the extent that any Losses arise out of or are based
upon an untrue statement or alleged untrue statement or omission or alleged
omission make in any preliminary prospectus if (i) the Investor failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by the Investor of a Registrable Security to the
Person asserting the claim from which such Losses arise and (ii) the Prospectus
would have corrected in all material respects such untrue statement or alleged
untrue statement or such omission or alleged omission; provided, further, that
the Company shall not be liable in any such case to the extent that any such
Losses arise out or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the Prospectus, if (x) such untrue
statement or alleged untrue statement, omission or alleged omission is
corrected in all material respects in an amendment or supplement in the
Prospectus and (y) having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, the
Investor thereafter fails to deliver such Prospectus as so amended or
supplemented, prior to or concurrently with the sale of a Registrable Security
to the Person asserting the claim for which such Losses arise.
(b) Indemnification By Holder of Registrable Securities. The
Investor agrees to indemnify and hold harmless the Company and its partners,
trust managers, officers, 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) (collectively, the "Company") against all
Losses arising out of or based upon any 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, to the extent, but only to the extent, that such untrue statement
or omission is contained in any information or affidavit so furnished in
writing by the Investor to the Company specifically for inclusion in such
Registration Statement or Prospectus. 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. The obligation of the Investor to indemnify hereunder
shall be limited to the net amount of proceeds received by such Investor from
the sale of Registrable Securities pursuant to such Registration Statement or
Prospectus.
(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
(provided that the failure to give prompt notice shall not impair any Person's
right to indemnification hereunder to the extent such failure has not
materially prejudiced the indemnifying party) 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
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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 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. The relative fault of the Company
and the Investor 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
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentations.
8. Rule 144. The Company hereby agrees that it will timely file the
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder (or, if the
Company is not required to file such reports, it will, upon the request of the
Investor, make publicly available other information so long as necessary to
permit sales pursuant to Rule 144 under the Securities Act), and it will take
such further action as the Investor may reasonably request, all to the extent
required from time to time to enable the Investor to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144. Upon the request of the Investor, the
Company will deliver to the Investor a written statement as to whether it has
complied with such information and requirements.
9. Participation in Underwritten Registrations. 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 Company and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
12
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.
10. Miscellaneous.
(a) Other Registration Rights. Notwithstanding anything in
this Agreement to the contrary, nothing in this Agreement shall be construed as
limiting the ability of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Asset Management Inc. and its clients
and affiliates, USAA Real Estate Company, ABKB/LaSalle Securities Limited
Partnership and its clients, and LaSalle Advisors Limited Partnership and its
clients (collectively, the "Majority Shareholders"), from exercising their
registration rights which were granted to them by the Company.
(b) 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.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and the Investor.
(d) Notices. The notice provisions contained in Article 12 of
the Contribution Agreement shall be incorporated herein and shall be governing
under this Agreement.
(e) Successors and Assigns. This Agreement and the rights
granted hereunder may not be assigned by the Investor without the written
consent of the Company. Notwithstanding the foregoing, the Investor may
assign its rights under Section 2 or 3 hereof to (i) any of its employees,
officers or directors who, in the reasonable opinion of counsel to the Company,
are "accredited investors" within the meaning of Rule 501(a) promulgated under
the Securities Act or (ii) Permitted Transferees (under and defined in the
partnership agreement of the Operating Partnership); provided that no
transferee shall have any of the rights granted under this Agreement until such
transferee shall acknowledge its rights and obligations hereunder by a signed
written statement of each transferee's acceptance of such rights and
obligations.
(f) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
13
(h) GOVERNING LAW. THIS AGREEMENT, AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
(i) Severability. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any current or future law, and if
the rights or obligations of the parties under this Agreement would not be
materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. In lieu of such illegal, invalid or
unenforceable provision, there shall be added simultaneously as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible, and the parties
hereto request the court or any arbitrator to whom disputes relating to this
Agreement are submitted to reform the otherwise illegal, invalid or
unenforceable provision in accordance with this Section 10(i).
(j) ARBITRATION. ANY DISPUTE OR CLAIM IN LAW OR EQUITY
ARISING OUT OF OR RELATED TO THIS AGREEMENT (A "CLAIM") SHALL BE RESOLVED BY
NEUTRAL BINDING 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 10(J) SHALL BE HELD
IN DALLAS, TEXAS. ANY PARTY WHICH SHALL BE THE PREVAILING PARTY IN ANY
ARBITRATION CONDUCTED HEREUNDER (AS DETERMINED BY THE ARBITRATOR) SHALL BE
ENTITLED TO RECOVER FROM THE NON-PREVAILING PARTY REIMBURSEMENT OF ALL
REASONABLE COSTS OF SUCH ARBITRATION (INCLUDING REASONABLE ATTORNEYS' FEES).
EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO COMMENCE ANY ACTION IN CONNECTION
WITH ANY CLAIM IN ANY COURT (OTHER THAN AN ACTION FOR THE SOLE PURPOSE TO
ENFORCING THE OBLIGATION OF A PARTY HERETO TO SUBMIT TO BINDING ARBITRATION OR
THE ENFORCEMENT OF AN AWARD GRANTED BY ARBITRATION HEREUNDER) AND EXPRESSLY
AGREES TO BE BOUND BY THE DETERMINATION OF THE ARBITRATOR UNDER THIS SECTION
10(J).
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
14
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
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"INVESTOR"
AG INDUSTRIAL INVESTORS, L.P.,
a Delaware limited partnership
By: AG Industrial Investors Acquisition
Corp, a Delaware corporation,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Vice President
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