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Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and entered
into as of December 20, 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 20, 1996, among the Company, American Industrial Properties REIT, Inc.,
a Maryland corporation ("Sub"), and USAA (the "SHARE PURCHASE AGREEMENT"), USAA
purchased 998,100 Common Shares (the "SHARES") from Sub; 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:
1. Definitions.
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Closing Date: The closing date as defined in the 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.
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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 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.
2. Registration Rights.
(a) Shelf RegistrationUpon 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
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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.
(b) 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
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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.
(c) Incidental Registration. If at any time during the five year period
following the Closing Date the Company proposes to file a registration statement
under the Securities Act (other than in connection with the Shelf Registration,
a Demand Registration or a Registration Statement on Form S-4 or S-8, or any
form that is substituting therefor or is a successor thereto) with respect to an
offering of any class of security by the Company for its own account or for the
account of any of its security holders, then the Company shall give written
notice of such proposed filing to 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)
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if the actions described in clause (A) would, in the judgment of the managing
underwriter, be insufficient to substantially eliminate the adverse effect that
inclusion of the Registrable Securities requested to be included would have on
such offering, such Registrable Securities will be excluded from such offering.
No registration pursuant to a request or requests referred to in this
subsection 2(c) shall be deemed to be a Shelf Registration.
3. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holder of Registrable Securities. 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.
(b) 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.
4. Registration Procedures. In connection with the Company's registration
obligations pursuant to Section 2 hereof, the Company will use its commercially
reasonable efforts to effect such registration to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company will use commercially
reasonable efforts to as expeditiously as possible:
(a) prepare and file with the SEC, as soon as practicable, and in any
event within 60 days from the date of request, a Registration Statement relating
to the applicable registration on any appropriate form under the Securities Act,
which forms shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution thereof and shall
include all financial statements of the Company, and use its commercially
reasonable efforts
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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;
(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 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;
(c) 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;
(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment;
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(e) 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;
(f) 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;
(g) 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);
(h) 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;
(i) 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;
(j) 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;
(k) 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;
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(l) 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;
(m) 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;
(n) 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;
(o) 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;
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(p) 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
(q) 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.
5. Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation:
all registration and filing fees; fees with respect to filings required to be
made with the NASD; fees and expenses of compliance with 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
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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.
6. Indemnification; Contribution.
(a) 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.
(b) 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.
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(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however that any Person
entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such Person unless (a) the
indemnifying party has agreed to pay such fees or expenses, (b) the indemnifying
party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to such Person or (c) based upon written advice of
counsel to such Person, there shall be one or more defenses available to such
Person that are not available to the indemnifying party or there shall exist
conflicts of interest pursuant to applicable rules of professional conduct
between such Person and the indemnifying party (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person), in each of which events the fees and expenses of such counsel
shall be at the expense of the indemnifying party. The indemnifying party will
not be subject to any liability for any settlement made without its consent (but
such consent will not be unreasonably withheld), but if settled with its written
consent, or if there be a final judgment for the plaintiff in any such action or
proceeding, the indemnifying party shall indemnify and hold harmless the
indemnified parties from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. No indemnified party will be
required to consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
(d) Contribution. If for any reason the indemnification provided for in
the preceding clauses (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless as contemplated by the preceding clauses (a)
and (b), then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and 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.
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7. Rule 144. The Company hereby agrees that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of 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.
8. Participation in Underwritten Registrations.
(a) If any of the Registrable Securities covered by the Shelf Registration
are to be sold in an Underwritten Offering, 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.
(b) No Person may participate in any Underwritten Registration hereunder
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
Nothing in this Section 8 shall be construed to create any additional rights
regarding the registration of Registrable Securities in any Person otherwise
than as set forth herein.
9. Miscellaneous.
(a) Remedies. Each party hereto, in addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement to
the extent available under applicable law. Each party hereto agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
(b) 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.
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(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 USAA.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or air courier guaranteeing overnight delivery:
(i) if to 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.
(ii) if to the Company, initially at 0000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxxx, President and Chief
Executive Officer, and thereafter at such other address as may be designated
from time to time by notice given in accordance with the provisions of this
Section 9(d).
(e) 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.
(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.
(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. 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.
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(j) 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"
USAA REAL ESTATE COMPANY
By:_____________________________________
T. Xxxxxxx Xxxxxx
Senior Vice President - Operations
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