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AMERICAN INDUSTRIAL PROPERTIES
REIT
April 14, 1994
Dear Fellow Shareholder,
In his last letter to you, Paul Koether of American Holdings stated that
we, as the management of the Trust, "don't get it". On the contrary, we believe
that . . .
KOETHER DOESN'T WANT YOU TO GET IT.
Koether continues to speak as if he has the same interests as other
shareholders in the Trust. Unlike many of you, however, he is not a
long-standing shareholder interested in the growth of the Trust. AMERICAN
HOLDINGS HAS ONLY ACQUIRED ITS SHARES OVER THE PAST FEW MONTHS -- BUYING-IN TO
THE TRUST AT VERY LOW PRICES. Now, Koether says we should liquidate the Trust,
or sell it in an auction to the highest bidder. Sure, this might allow American
Holdings to make a quick return on its investment, at the expense of our growth
plan for the Trust -- but is it really a smart plan for most of the Trust's
shareholders? We don't think so.
Last October, you and your fellow shareholders overwhelmingly decided by
an 81% vote not to proceed with a liquidation of the Trust. You voted
overwhelmingly for a plan to maximize shareholder value by growing the Trust. We
have taken this mandate very seriously. Over the past several months, we have
been hard at work to arrange financing to recapitalize the Trust's business. We
believe this recapitalization is critical to the Trust's growth and to the
future reinstatement of quarterly distributions to shareholders.
We believe there are three key elements to the merger proposal which are
necessary to achieve your goals:
1. The Trust would be better served to be organized in Maryland, as
are the large majority of all recently formed real estate
investment trusts, than in Texas, where very few REITs are
organized,
2. We need to increase the authorized share limit of the Trust to
provide the ability to raise new equity capital at some point in
the future. The Trust can't grow otherwise, and
3. The per share price of the Trust's shares needs to be increased,
via the reverse share split, to attract new capital from investors
who cannot invest in low value stocks.
In each case, our conclusions on these points are based on information we
have received from bankers, securities analysts and others in our efforts to
recapitalize the Trust. We believe each of these elements is important to
achieve your goals.
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DON'T BE FOOLED BY KOETHER'S MISLEADING RHETORIC.
Courts have called Koether a greenmailer and a corporate blackmailer. He
always appears to have an agenda of his own. Now he wants you to buy-in to his
agenda -- that of having the Trust liquidated or "auctioned" to the highest
bidder.
We don't believe Koether shares your goals and objectives for the Trust.
Don't allow Koether to change the course of the Trust set last October. We
strongly believe the proposed merger is essential to the Trust's plans to
recapitalize its business for the growth and profitability of your investment
and urge you to vote FOR the proposal on the WHITE PROXY CARD.
On behalf of your Trust Managers,
/s/CHARLES W. WOLCOTT
Charles W. Wolcott
President and CEO
IMPORTANT
1. Be sure to vote only on the WHITE PROXY CARD. WE URGE YOU NOT TO SIGN ANY
BLUE PROXY CARDS YOU RECEIVE FROM AMERICAN HOLDINGS OR ITS ASSOCIATES.
2. If your shares are held in "street name," only your broker or banker can vote
your shares and only upon receipt of your specific instructions. Please
return the WHITE PROXY CARD in the envelope provided or contact the person
responsible for your account and instruct that individual to vote a WHITE
PROXY CARD on your behalf today.
3. If you have executed American Holdings' blue proxy card, you have every right
to change your vote by signing, dating and returning the enclosed WHITE PROXY
CARD. Any proxy may be revoked by a later-dated proxy. Only your latest-dated
proxy will count at the Special Meeting of Shareholders.
4. If you have any questions or need assistance in voting your shares, please
feel free to contact me, Charles Wolcott, at our toll-free number,
1-800-550-6053, or contact D.F. King & Co., Inc. at 1-800-669-5550.
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AMERICAN INDUSTRIAL PROPERTIES REIT
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST MANAGERS OF
AMERICAN INDUSTRIAL PROPERTIES REIT
SPECIAL MEETING MAY 10, 1994
The undersigned hereby appoints W. H. Bricker and Charles W. Wolcott, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes either of them to represent and to vote all of the
undersigned's Shares of Beneficial Interest in the Trust, held of record on
March 4, 1994, at the Special Meeting of Shareholders to be held on May 10,
1994 or at any postponements or adjournments thereof, on the proposals below,
as directed.
(1) THE ADOPTION AND APPROVAL OF THE MERGER AGREEMENT AND THE MERGER
THEREUNDER OF AMERICAN INDUSTRIAL PROPERTIES REIT (THE "TRUST")
WITH AND INTO A MARYLAND CORPORATION WHICH IS A WHOLLY-OWNED
SUBSIDIARY OF THE TRUST.
/ / FOR: / / AGAINST: / / ABSTAIN:
(2) IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE SPECIAL MEETING OR ANY POSTPONEMENTS OR ADJOURNMENTS
THEREOF.
/ / FOR: / / AGAINST: / / ABSTAIN:
This Proxy, when properly executed, will be voted in the manner described
above. If no direction is made, this Proxy will be voted FOR the first proposal
and at the discretion of the Proxies with respect to the second proposal.
Please sign exactly as your name appears on your Share certificate. When Shares
are held in more than one name, all parties should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by an authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
_________________________ ______
Signature of Shareholder Date
_________________________ ______
Signature if Shares held Date
in more than one name
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.
