REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into as of December 19, 1996, by and between
American Industrial Properties REIT, a Texas real estate
investment trust (the "Company"), and USAA Real Estate Company,
a Delaware corporation ("USAA").
WITNESSETH:
WHEREAS, pursuant to that certain Share Purchase Agreement,
dated as of December 13, 1996, between the Company and USAA (the
"Share Purchase Agreement"), USAA purchased 924,600 Common Shares
(the "Shares"); and
WHEREAS, pursuant to the terms of the Share Purchase
Agreement, the Company and USAA agreed that the Company would
grant certain registration rights to USAA 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:
0. Definitions.
As used in this Agreement, the following
capitalized terms shall have the following meanings:
Closing Date: The closing date as defined in the
Share 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.
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.
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 is sold under circumstances in
which all of the applicable conditions of Rule 144 (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.
SEC: The Securities and Exchange Commission or
any successor entity.
Securities Act: The Securities Act of 1933, as
amended from time to time.
Share Purchase Agreement: See the Recitals to
this Agreement.
Shares: See the Recitals to this Agreement.
Underwritten Registration or Underwritten
Offering: A registration in which securities of the Company are
sold to an underwriter for reoffering to the public.
1. Registration Rights.
( ) Shelf Registration. Upon the written request of USAA,
the Company shall file 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") for all of the then Registrable Securities,
subject to the request of USAA to exclude any Registrable
Securities.
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 USAA or any underwriter of the Registrable Securities.
If USAA so elects, the offering of Registrable
Securities pursuant to a Shelf Registration shall be in the form
of an Underwritten Offering.
(a) Demand Registration.
At any time during the five year period following the
Closing Date, USAA may make a written request (the "Demand
Notice") for registration under the Securities Act (a "Demand
Registration") of the Registrable Securities held by it.
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. Unless USAA shall
consent in writing, no other party, including the Company, 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). USAA may, at any time prior
to the effective date of the Registration Statement relating to
such registration, revoke its Demand Notice by providing a
written notice to the Company.
If USAA so elects, the offering of Registrable
Securities pursuant to a Demand Registration shall be in the form
of an Underwritten Offering. If the managing underwriter or
underwriters of such offering advise the Company and USAA in
writing that in their opinion the number of shares of Registrable
Securities 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 which in the
opinion of such managing underwriter or underwriters can be sold
without any such material adverse effect; provided, however, that
Registrable Securities 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 three Demand
Registrations.
No registration pursuant to a request or requests
referred to in this subsection 2(b) shall be deemed to be a Shelf
Registration.
(b) 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 USAA as soon as practicable (but in no
event less than thirty days before the anticipated filing date),
and such notice shall (i) offer USAA 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), USAA
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 USAA that either because of (i) the kind of
securities which USAA, the Company, or any other Persons intend
to include in such offering or (ii) the size of the offering
which USAA, 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 USAA and other
holders registering securities of the Company pursuant to similar
incidental registration rights shall be reduced pro rata
(according to the Registrable Securities beneficially owned by
such holders) 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.
2. Hold-Back Agreements.
( ) Restrictions on Public Sale by Holder of Registrable
Securities. USAA 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 such Registration
Statement, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such Underwritten
Registration), during the 10-day period prior to the filing of a
Registration Statement with respect to such Underwritten
Offering, 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.
(a) Restrictions on Sale of Securities by the Company. The
Company agrees 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 (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 such Underwritten
Offering, and during the 90-day period beginning on the effective
date of any Registration Statement (except as part of such
registration statement (x) where USAA consents or (y) where USAA
is 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 USAA is not simultaneously participating in a registration
statement pursuant to Section 2(b) hereof) or the commencement of
a public distribution of Registrable Securities pursuant to such
registration statement.
3. 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 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:
( ) 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 USAA and the
underwriters, if any, copies of all such documents proposed to be
filed, which documents will be subject to the review of USAA and
the underwriters, 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 USAA or the underwriters, if any, shall
reasonably object;
(a)
(a) 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 covered by 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 covered by 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 USAA 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(l) hereof, if applicable;
(b) notify USAA and the managing underwriters, if any,
promptly, and (if requested by any such Person) confirm such
advice in writing, (1) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (2) of any request
by the SEC for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (3) of
the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, (4) if at any time the
representations and warranties of the Company contemplated by
paragraph (n) below cease to be true and correct, (5) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (6) of the happening of any event
which makes any statement made in the Registration Statement, the
Prospectus or any document incorporated therein by reference
untrue or which requires the making of any changes in the
Registration Statement, the Prospectus or any document
incorporated therein by reference in order to make the statements
therein not misleading;
(c) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the Registration
Statement at the earliest possible moment;
(d) if reasonably requested by the managing underwriter or
underwriters or USAA, promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the
managing underwriters and USAA 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;
(e) prior to the filing of any document which is to be
incorporated by reference into the Registration Statement or the
Prospectus (after initial filing of the Registration Statement),
make available representatives of the Company for discussion of
such document and make such changes in such document prior to the
filing thereof as USAA or the underwriters may reasonably
request;
(f) furnish to USAA 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 USAA 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 USAA 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 USAA, 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 USAA or any underwriter reasonably
requests in writing and do any and all other acts or things
necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the
Registration Statement;
(i) cooperate with USAA 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 USAA 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 USAA 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 the managing underwriters, if any,
and USAA, covering the matters customarily covered in opinions
requested in Underwritten Offerings and such other matters as may
be reasonably requested by USAA and the underwriters, if any);
(3) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to
USAA 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) the Company shall deliver such documents and
certificates as may be requested by USAA 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)
(n) make available for inspection by a representative of
USAA, any underwriter participating in any disposition pursuant
to such registration, and any attorney or accountant retained by
USAA 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 are designated by the Company 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 USAA 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 USAA 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.
USAA agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4(l)
hereof, USAA will forthwith discontinue disposition of
Registrable Securities until USAA's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 4(l)
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, USAA will deliver to the Company (at the
Company's expense), all copies, other than permanent file copies
then in USAA'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 USAA shall receive copies
of the supplemented or amended prospectus contemplated by Section
4(l) hereof or the Advice.
4. 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 securities or blue sky laws
(including fees and disbursements of counsel for the underwriters
or USAA 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 or USAA 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 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 USAA.
5. Indemnification; Contribution.
( ) Indemnification by Company. The Company agrees to
indemnify and hold harmless USAA and its partners, and their
respective partners, officers, directors, employees and agents,
and each Person who controls such Person (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 USAA
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
USAA, if requested.
(a) Indemnification by Holder of Registrable Securities.
USAA agrees to indemnify and hold harmless the Company and its
trust managers, officers, employees and agents, and each Person
who controls the Company (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) against any
losses, claims, damages, liabilities and expenses resulting from
any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement
or Prospectus or preliminary prospectus or necessary to make the
statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in
any information or affidavit so furnished in writing by USAA to
the Company specifically for inclusion in such Registration
Statement or Prospectus. In no event shall the liability of USAA
hereunder be greater in amount than the dollar amount of the
proceeds received by USAA 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.
(b)
(b) 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.
(c) Contribution. If for any reason the indemnification
provided for in the preceding clauses (a) and (b) is unavailable
to an indemnified party or insufficient to hold it harmless as
contemplated by the preceding clauses (a) and (b), then the
indemnifying party shall contribute to the amount paid or payable
by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and
the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any
other relevant equitable considerations, provided, that USAA
shall not be required to contribute an amount greater than the
dollar amount of the proceeds received by USAA 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 USAA 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.
6. 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 USAA, 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 USAA may reasonably request, all to the
extent required from time to time to enable USAA 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 USAA, the Company will
deliver to USAA a written statement as to whether it has complied
with such information and requirements.
7. Participation in Underwritten Registrations.
( ) If any of the Registrable Securities covered by the
Shelf Registration are to be sold in an Underwritten Offering,
the investment banker or investment bankers and manager or
managers that will administer the offering will be selected by
USAA; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
(a) 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.
8. Miscellaneous.
( ) 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.
(a) Additional 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 USAA hereunder without the written
consent of USAA. The Company has not previously entered into any
agreement with respect to its securities granting any
registration rights to any Person.
(b) 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 USAA.
(c) 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:
( ) if to USAA, at the most current address given by USAA
to the Company in accordance with the provisions of this
subsection, which address initially is 8000 Xxxxxx X. XxXxxxxxx
Xxxxxxx, XX-00, Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000-0000,
Attention: Xxxxx Xxxxxx.
(i) 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(d).
(d) 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, it being understood that the registration rights
granted to USAA hereunder shall also be for the benefit of, and
enforceable by, the single first transferee of 100% of USAA's
remaining registrable securities and, provided further, that the
Company cannot assign its rights hereunder except pursuant to a
merger.
(e) 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.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) 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.
(h) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(i) 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:
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
USAA REAL ESTATE COMPANY
By:
T. Xxxxxxx Xxxxxx
Senior Vice President - Operations
