EXHIBIT 4.6
U.S. BANCORP
CONTINGENT ZERO-COUPON ACCRETING REDEEMABLE SECURITIESSM DUE 2021
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(CONVERTIBLE SENIOR NOTES)
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REGISTRATION RIGHTS AGREEMENT
New York, New York
August 6, 2001
Xxxxxxx Xxxxx Xxxxxx Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
U.S. Bancorp, a corporation organized under the laws of Delaware (the
"Company"), proposes to issue and sell to Xxxxxxx Xxxxx Barney Inc. and U.S.
Bancorp Xxxxx Xxxxxxx Inc. (the "Initial Purchasers"), its Contingent
Zero-Coupon Accreting Redeemable Securities (Convertible Senior Notes) Due
2021 (the "CZARS"), upon the terms set forth in a purchase agreement dated as
of July 30, 2001 (the "Purchase Agreement") relating to the initial placement
of the CZARS (the "Initial Placement"). To induce the Initial Purchasers to
enter into the Purchase Agreement and to satisfy a condition to their
obligations thereunder, the Company agrees with you for your benefit and the
benefit of the holders from time to time of the CZARS (including the Initial
Purchasers) (each, a "Holder" and collectively, the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall have
their respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
"Additional Amounts" shall have the meaning set forth in Section 7
hereof.
"Applicable Conversion Price" shall mean the applicable Accreted
Value per $1,000 principal amount at maturity of CZARS as of such date of
determination divided by the conversion rate in effect as of such date of
determination or, if no CZARS are then outstanding, the conversion rate
that would be in effect were CZARS then outstanding.
"Broker-Dealer" shall mean any broker or dealer registered as such
under the Exchange Act.
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"Closing Date" shall mean the closing date of the Initial Placement.
"CZARS" shall have the meaning set forth in the preamble hereto.
"Deferral Period" shall have the meaning indicated in Section 3(i)
hereof.
"Final Memorandum" shall mean the offering memorandum, dated July
30, 2001 relating to the CZARS, including any and all information
incorporated by reference therein.
"Holder" shall have the meaning set forth in the preamble hereto.
"Indenture" shall mean the Indenture dated as of October 1, 1991,
between the Company (as successor to First Bank System, Inc.) and
Citibank, N.A., as trustee, as supplemented, including by a supplemental
indenture thereto relating to the CZARS, dated as of August 6, 2001, as
the same may be amended or supplemented from time to time in accordance
with the terms thereof.
"Initial Placement" shall have the meaning set forth in the preamble
hereto.
"Initial Purchasers" shall have the meaning set forth in the
preamble hereto.
"Losses" shall have the meaning set forth in Section 5(d) hereof.
"Majority Holders" shall mean, on any date, the Holders of a
majority of the aggregate principal amount of the Registrable Securities
outstanding on such date.
"Managing Underwriters" shall mean the investment banker or
investment bankers and manager or managers that administer an
underwritten offering, if any, conducted pursuant to Section 6 hereof.
"NASD Rules" shall mean the Conduct Rules and the By-Laws of the
National Association of Securities Dealers, Inc.
"Notice and Questionnaire" shall mean a written notice delivered to
the Company substantially in the form attached as Annex A to the Final
Memorandum.
"Notice Holder" shall mean, on any date, any Holder of Registrable
Securities that has delivered a Notice and Questionnaire to the Company
on or prior to such date.
"Prospectus" shall mean a prospectus included in the Shelf
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part
of an effective registration statement in reliance upon Rule 430A under
the Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the CZARS covered
by the Shelf Registration Statement, and all amendments and supplements
thereto, including any and all exhibits thereto and any information
incorporated by reference therein.
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"Purchase Agreement" shall have the meaning set forth in the
preamble hereto.
"Registrable Securities" shall mean CZARS other than those that have
been (i) registered under the Shelf Registration Statement and disposed
of in accordance therewith or (ii) distributed to the public pursuant to
Rule 144 under the Act or any successor rule or regulation thereto that
may be adopted by the Commission.
"Shelf Registration Period" shall have the meaning set forth in
Section 2(c) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2 hereof
which covers some or all of the Registrable Securities on an appropriate
form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
information incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the CZARS under the
Indenture.
"Underwriter" shall mean any underwriter of CZARS in connection with
an underwritten offering thereof under the Shelf Registration Statement.
2. Shelf Registration. (a) The Company shall file with the Commission as
promptly as practicable, but in no event more than 90 days after the Closing
Date, a Shelf Registration Statement providing for the registration of, and
the sale on a continuous or delayed basis by the Holders of, all of the
Registrable Securities, from time to time in accordance with the methods of
distribution elected by such Holders as set forth in their Notice and
Questionnaire, pursuant to Rule 415 under the Act or any similar rule that may
be adopted by the Commission.
(b) The Company shall use reasonable efforts to cause the Shelf
Registration Statement to become or be declared effective under the Act as
promptly as possible but in any event no later than 150 days after the Closing
Date.
(c) The Company shall use reasonable efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended as
required by the Act, in order to permit the Prospectus forming part thereof to
be usable by Holders for a period (the "Shelf Registration Period") from the
date the Shelf Registration Statement is declared effective by the Commission
until the earliest of (i) the time when the CZARS and Common Stock issuable
upon conversion thereof covered by the Shelf Registration Statement can be
sold pursuant to Rule 144 under the Act or any successor rule or regulation
thereto, (ii) the expiration of the holding period applicable to the CZARS and
Common Stock issuable upon conversion thereof held by our non- Affiliates
under Rule 144(k) under the Act, or any successor provision and (iii) the date
on which all CZARS and Common Stock registered under the Shelf Registration
Statement are disposed of in accordance therewith. The Company shall be deemed
not to have used reasonable efforts to keep the Shelf Registration Statement
effective during the Shelf Registration Period if it voluntarily takes any
action that would result in Holders of Registrable Securities not being able
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to offer and sell such CZARS at any time during the Shelf Registration Period,
unless such action is required by applicable law or contemplated by Section
3(i) hereof.
(d) The Company shall cause the Shelf Registration Statement and the
related Prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement or such amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Act and the rules and regulations of the Commission; and
(ii) not to contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading (except as to information provided by
Holders in their Notices and Questionnaires or written responses pursuant to
Section 3(m) below or in writing, specifically for use in such Prospectus,
amendment or supplement, by the underwriters in any underwritten offering
(collectively, "Excluded Information")).
(e) Each Holder must complete and deliver a Notice and Questionnaire at
least five Business Days prior to the effectiveness of the Shelf Registration
Statement to be named as a selling holder in the Prospectus at the time of
effectiveness. Subsequently, each Holder of Registrable Securities shall
complete and deliver a Notice and Questionnaire to the Company at least three
Business Days prior to any intended distribution of Registrable Securities
pursuant to the Shelf Registration Statement. Upon receipt of a completed
Notice and Questionnaire from and after the date the Shelf Registration
Statement is declared effective, the Company shall, as promptly as is
practicable but in any event within five Business Days after such receipt, (i)
if required by applicable law, file with the Commission a post-effective
amendment to the Shelf Registration Statement or prepare and, if required by
applicable law, file a supplement to the related Prospectus or a amendment or
supplement to any document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and Questionnaire
is named as a selling holder in the Shelf Registration Statement and the
related Prospectus and so that such Holder is permitted to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment to
the Shelf Registration Statement, cause such post-effective amendment to be
declared effective under the Act as promptly as is practicable; (ii) provide
such Holder copies of any documents filed pursuant to Section 2(e)(i) hereof;
and (iii) notify such Holder as promptly as practicable after the
effectiveness under the Act of any post-effective amendment filed pursuant to
Section 2(e)(i) hereof; provided, that if such Notice and Questionnaire is
delivered during a Deferral Period, the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth
in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(i) hereof. Notwithstanding anything contained herein
to the contrary, the Company shall be under no obligation to name any Holder
that is not a Notice Holder as a selling holder in the Shelf Registration
Statement or related Prospectus; provided, however, that any Holder that
becomes a Notice Holder pursuant to the provisions of this Section 2(e)
(whether or not such Holder was a Notice Holder at the time the Shelf
Registration Statement was declared effective) shall be named as a selling
holder in the Shelf Registration Statement or related Prospectus in accordance
with the requirements of this Section 2(e).
3. Registration Procedures. The following provisions shall apply in connection
with the Shelf Registration Statement.
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(a) The Company shall:
(i) furnish to each of the Initial Purchasers, not less than five
Business Days (or in the case of any amendment or supplement required by
Section 3(h) hereof, such lesser time period as shall be practicable) prior to
the filing thereof with the Commission, a copy of the Shelf Registration
Statement and each amendment thereof and each amendment or supplement, if any,
to the Prospectus included therein (including all documents incorporated by
reference therein after the initial filing) and shall use its reasonable
efforts to reflect in each such document, when so filed with the Commission,
such comments as the Initial Purchasers reasonably propose prior to the filing
thereof; and
(ii) include information regarding the Notice Holders and the methods of
distribution they have elected for their Registrable Securities provided to
the Company in Notices and Questionnaires as necessary to permit such
distribution by the methods specified therein.
(b) The Company shall ensure that:
(i) the Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto
complies in all material respects with the Act; and
(ii) the Shelf Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except as to Excluded
Information).
(c) The Company shall advise the Initial Purchasers, the Notice Holders
and any underwriter that has provided in writing to the Company a telephone or
facsimile number and address for notices, and confirm such advice by notice in
writing (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied
by an instruction to suspend the use of the Prospectus until the Company shall
have remedied the basis for such suspension):
(i) when the Shelf Registration Statement and any amendment thereto has
been filed with the Commission and when the Shelf Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for any amendment or supplement to
the Shelf Registration Statement or the Prospectus or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation or, to the
Company's knowledge, threatening of any proceeding for that purpose;
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the CZARS or the Common Stock issuable
upon conversion thereof included therein for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose; and
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(v) of the happening of any event (without being required to specify the
details of any such event) that requires any change in the Shelf Registration
Statement or the Prospectus so that, as of such date, they do not contain any
untrue statement of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which they
were made) not misleading.
(d) Except during a Deferral Period, the Company shall use its reasonable
efforts to obtain the withdrawal at the earliest possible time of any order
suspending the effectiveness of the Shelf Registration Statement or the
qualification of the securities covered thereby for sale in any jurisdiction.
(e) The Company shall furnish to each Notice Holder, without charge, at
least one copy of the Shelf Registration Statement and any post-effective
amendment thereto, including all material incorporated therein by reference,
and, if a Notice Holder so requests in writing, all exhibits thereto
(including exhibits incorporated by reference therein).
(f) During the Shelf Registration Period, the Company shall promptly
deliver to each Notice Holder, without charge, as many copies of the
Prospectus (including the preliminary Prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as any such
person may reasonably request. Subject to Section 3(c) above, the Company
consents to the use of the Prospectus or any amendment or supplement thereto
by each of the foregoing in connection with the offering and sale of the
CZARS.
(g) Prior to any offering of CZARS pursuant to the Shelf Registration
Statement, the Company shall arrange for the qualification of the CZARS for
sale under the laws of such jurisdictions as any Notice Holder shall
reasonably request and shall maintain such qualification in effect so long as
required; provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not then so qualified or to
take any action that would subject it to service of process in suits in any
jurisdiction where it is not then so subject.
(h) Upon the occurrence of any event contemplated by subsections (c)(ii)
through (v) of this Section 3, the Company shall promptly (or within the time
period provided for by Section 3(i) hereof, if applicable) prepare a
post-effective amendment to the Shelf Registration Statement or an amendment
or supplement to the related Prospectus or file any other required document so
that, as thereafter delivered to Initial Purchasers of the securities included
therein, the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(i) Upon the occurrence or existence of any pending corporate development
or any other material event that, in the sole judgment of the Company, makes
it appropriate to suspend the availability of the Shelf Registration Statement
and the related Prospectus, the Company shall give notice (without notice of
the nature or details of such events) to the Notice Holders that the
availability of the Shelf Registration is suspended and, upon receipt of any
such notice, each Notice Holder agrees not to sell any Registrable Securities
pursuant to the Shelf Registration until such Notice Holder's receipt of
copies of the supplemented or amended Prospectus
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provided for in Section 3(h) hereof, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. The period during which the
availability of the Shelf Registration and any Prospectus is suspended (the
"Deferral Period") shall not exceed 45 days in any three-month period or 90
days in any twelve-month period. In such circumstances, the length of the
periods provided for in Sections 2(a) and (b) hereof shall be extended by the
number of days included in the Deferral Period. For purposes of measuring any
Deferral Period, the five-day period described in Section 7(c) below shall be
included in the number of days of such Deferral Period.
(j) Not later than the effective date of the Shelf Registration
Statement, the Company shall provide a CUSIP number for the CZARS registered
under the Shelf Registration Statement and provide the Trustee with printed
certificates for such CZARS, free of any restrictive legends, in a form
eligible for deposit with The Depository Trust Company.
(k) The Company shall comply with all applicable rules and regulations of
the Commission and shall make generally available to its security holders an
earnings statement satisfying the provisions of Section 11(a) of the Act as
soon as practicable after the effective date of the Shelf Registration
Statement and in any event no later than 45 days after the end of a 12- month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of the Company's first fiscal quarter commencing after the effective
date of the Shelf Registration Statement which statement shall cover such
12-month period.
(l) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act in a timely manner.
(m) In addition to the information required in the Notice and
Questionnaire, the Company may require each Holder of CZARS to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such CZARS as the
Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement. The Company may exclude from the Shelf Registration
Statement the CZARS of any Holder that fails to furnish such information
within a reasonable time after receiving such request.
(n) If requested by the Majority Holders, the Company shall enter into
such customary agreements (including, if requested, an underwriting agreement
in customary form) and take all other appropriate actions in order to expedite
or facilitate the registration or the disposition of the CZARS, and in
connection therewith, if an underwriting agreement is entered into, cause the
same to contain indemnification provisions and procedures no less favorable
than those set forth in Section 5 hereof.
(o) The Company shall:
(i) make reasonably available for inspection by a representative of the
Majority Holders of CZARS to be registered thereunder, any underwriter
participating in any disposition pursuant to the Shelf Registration Statement,
and any attorney, accountant or other agent retained
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by the Majority Holders or any such underwriter all relevant financial and
other records and pertinent corporate documents of the Company and its
subsidiaries;
(ii) use its reasonable best efforts to have the Company's officers,
directors, employees, accountants and auditors to supply all relevant
information reasonably requested by the Holders or any such underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement as is customary for similar due diligence examinations; provided,
however, that any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such information shall
be kept confidential by the Holders or any such underwriter, attorney,
accountant or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation
of confidentiality;
(iii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions shall be reasonably satisfactory to the Managing
Underwriters, if any) addressed to each selling Holder and the underwriters,
if any, covering such matters as are customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(iv) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Shelf Registration Statement), addressed to the underwriters, if any, in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten offerings; and
(v) deliver such documents and certificates as may be reasonably
requested by the Majority Holders or the Managing Underwriters, if any,
including those to evidence compliance with Section 3(i) hereof and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
The actions set forth in clauses (iii), (iv) and (v) of this paragraph (o)
shall, if requested by the Majority Holders, be performed at (A) the
effectiveness of the Shelf Registration Statement; and (B) each closing under
any underwriting or similar agreement as and to the extent required
thereunder.
(p) The Company shall use its reasonable efforts (i) if the CZARS have
been rated prior to the initial sale of such CZARS, to confirm such ratings
will apply to the CZARS covered by the Shelf Registration Statement; or (ii)
if the CZARS were not previously rated, to cause the CZARS covered by the
Shelf Registration Statement to be rated with at least one nationally
recognized statistical rating agency, if so requested by the Majority Holders
or by any Managing Underwriters.
(q) In the event that any Broker-Dealer shall underwrite any CZARS or
participate as a member of an underwriting syndicate or selling group or
"assist in the distribution" (within the
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meaning of the NASD Rules) thereof, whether as a Holder of such CZARS or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such Broker-Dealer in
complying with the NASD Rules, including, without limitation, by:
(i) if the NASD Rules shall so require, engaging a "qualified independent
underwriter" (as defined in the NASD Rules) to participate in the preparation
of the Shelf Registration Statement, to exercise usual standards of due
diligence with respect thereto and, if any portion of the offering
contemplated by the Shelf Registration Statement is an underwritten offering
or is made through a placement or sales agent, to recommend the yield of such
CZARS;
(ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof;
and
(iii) providing such information to such Broker-Dealer as may be required
in order for such Broker-Dealer to comply with the requirements of the NASD
Rules.
The Company shall use its reasonable efforts to take all other steps
necessary to effect the registration of the CZARS covered by the Shelf
Registration Statement.
4. Registration Expenses. The Company shall bear all expenses incurred in
connection with the performance of its obligations under Sections 2 and 3
hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel (which shall initially be Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, but which may, with the written consent of the
Initial Purchasers, be another nationally recognized law firm experienced in
securities matters designated by the Majority Holders) to act as counsel for
the Holders in connection with the initial Shelf Registration Statement.
5. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each Holder of CZARS covered by the Shelf Registration Statement
(including each Initial Purchaser), the directors, officers, employees and
agents of each such Holder and each person who controls any such Holder within
the meaning of either the Act or the Exchange Act from and against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement as originally
filed or in any amendment thereof, or in any preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading (in the case of the Prospectus, in the light of the
circumstances under which they were made), and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in
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conformity with any Excluded Information, provided, further, that the Company
shall not be liable for any loss, claim, damage or liability (i) arising from
an offer or sale of CZARS occurring during a Deferral Period, provided the
Holder has received a notice thereof with respect to such Deferral Period, or
(ii) if the Holder fails to deliver at or prior to the written confirmation of
sale, a Prospectus that is amended or supplemented, and such Prospectus, as
amended or supplemented, would have corrected the untrue statement or omission
or alleged untrue statement or omission of a material fact contained in the
Prospectus delivered by the Holder, so long as the Prospectus, as amended or
supplemented, has been delivered to such Holder prior to such time. This
indemnity agreement shall be in addition to any liability which the Company
may otherwise have.
(b) Each Holder of securities covered by the Shelf Registration Statement
(including each Initial Purchaser) severally and not jointly agrees to
indemnify and hold harmless the Company, each of their directors, officers,
employees, representatives, agents and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each such Holder, but only with
reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
shall be acknowledged by each Notice Holder that is not an Initial Purchaser
in such Notice Holder's Notice and Questionnaire and shall be in addition to
any liability which any such Notice Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 5
or notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 5, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any other
obligations to any indemnified party. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel chosen
by the indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action; or (iv) the indemnifying party shall authorize the
indemnified party to employ
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separate counsel at the expense of the indemnifying party. An indemnifying
party shall not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party
shall severally agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from
the offer and sale pursuant to the Shelf Registration Statement which resulted
in such Losses. Notwithstanding the provisions of this Section 5, no Holder
shall be required to contribute any amount in excess of the amount by which
the total price at which the CZARS purchased by it were resold exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. The Holders' obligations to contribute as provided in this Section
5(d) are several and not joint. If the allocation reflecting relative benefits
is unavailable for any reason, the indemnifying party and the indemnified
party shall severally contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the Initial Placement (before deducting expenses). Benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discount and commissions received by the Initial Purchasers in the Initial
Placement. Benefits received by any other Holders shall be deemed to be equal
to the value of receiving CZARS registered under the Act and the total net
gain received by such Holder with respect to the offer and sale of CZARS
pursuant to the Shelf Registration Statement. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts
and commissions received in the offering which resulted in such Losses.
Relative fault shall be determined by reference to, among other things,
whether any untrue or any alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
provided by the indemnifying party, on the one hand, or by the indemnified
party, on the other hand, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or any other method of
allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
5, each person who controls a Holder within the meaning of either the Act or
the Exchange Act and each director, officer, employee, representative and
agent of such
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Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act and each director, officer, employee, representative and agent of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 5 shall remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling persons referred
to in this Section 5 thereof, and shall survive the sale by a Holder of
securities covered by the Shelf Registration Statement.
6. Underwritten Registrations. (a) If any of the CZARS covered by the Shelf
Registration Statement are to be sold in an underwritten offering, the
Managing Underwriters shall be selected by the Holders of a majority of the
aggregate principal amount of Registrable Securities included in such
offering, subject to the consent of the Company (which shall not be
unreasonably withheld or delayed), and such Holders shall be responsible for
all underwriting commissions and discounts in connection therewith.
(b) No person may participate in any underwritten offering pursuant to
the Shelf Registration Statement unless such person (i) agrees to sell such
person's CZARS on the basis reasonably 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 reasonably
required under the terms of such underwriting arrangements.
7. Registration Defaults. The Company shall pay additional amounts (the
"Additional Amounts") to the Holders of CZARS in respect of the CZARS after the
events listed below as follows:
(a) if the Shelf Registration Statement is not filed with the
Commission on or prior to the 90th day following the Closing Date
(subject to extension as provided in Section 3(i)), then commencing on
the 91st day after the Closing Date; or
(b) the Shelf Registration Statement is not declared effective by
the Commission on or prior to the 150th day following the Closing Date
(subject to extension as provided in Section 3(i)), then commencing on
the 151st day after the Closing Date; or
(c) the Shelf Registration Statement has been declared effective but
ceases to be effective (other than pursuant to Section 3(i) hereof) at
any time during the Shelf Registration Period, then commencing on the day
the Shelf Registration Statement ceases to be effective without being
succeeded within five Business Days by a post-effective amendment to the
Shelf Registration Statement ; or
(d) if the aggregate duration of Deferral Periods in any period
exceeds the number of days permitted in respect of such period pursuant
to Section 3(i) hereof, then commencing on the day the aggregate duration
of Deferral Periods in any period exceeds the number of days permitted in
respect of such period.
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The Additional Amounts payable for any period from and including the date
of occurrence of an event of default, as specified above, shall accrue:
o in respect of any CZAR that is a Registrable Security, at a rate per
year equal to 0.25% for the first 90 days after the occurrence of
such event and 0.5% thereafter of the Accreted Value thereof; and
o in respect of any shares of Common Stock into which the CZARS have
been converted that is a Registrable Security, at a rate per year
equal to 0.25% for the first 90 days after the occurrence of such
event and 0.5% thereafter of the then Applicable Conversion Price;
provided, however, that (1) upon the filing of the Shelf Registration
Statement (in the case of paragraph (a) above), (2) upon the effectiveness of
the Shelf Registration Statement (in the case of paragraph (b) above), (3)
upon the effectiveness of the Shelf Registration Statement which had ceased to
remain effective (in the case of paragraph (c) above), or (4) upon the
termination of the Deferral Period that caused the limit on the aggregate
duration of Deferral Periods in a period set forth in Section 3(i) to be
exceeded (in the case of paragraph (d) above), Additional Amounts shall cease
to accrue. Notwithstanding anything herein to the contrary, Additional Amounts
shall cease to accrue at the time of expiration of the Company's obligation to
keep the Shelf Registration Statement continuously effective pursuant to
Section 2(c) above.
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8. No Inconsistent Agreements. The Company has not entered into, and agrees
not to enter into, any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders herein or that otherwise
conflicts with the provisions hereof.
9. Amendments and Waivers. The provisions of this Agreement may not be
amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Majority Holders; provided that, with
respect to any matter that directly or indirectly affects the rights of either
Initial Purchaser hereunder, the Company shall obtain the written consent of
each such Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective; provided, further, that no
amendment, qualification, supplement, waiver or consent with respect to
Section 7 hereof shall be effective as against any Holder of Registered
Securities unless consented to in writing by such Holder; and provided,
further, that the provisions of this Article 9 may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the
written consent of the Initial Purchasers and each Holder.
10. Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery:
(a) if to a Holder, at the most current address given by such holder
to the Company in accordance with the provisions of the Notice and
Questionnaire, which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the
Indenture,
(b) if to the Initial Purchasers, initially at the address set forth
in the Purchase Agreement; and
(c) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when given in accordance with the foregoing procedure.
The Initial Purchasers or the Company by notice to the other parties may
designate additional or different addresses for subsequent notices or
communications.
11. Remedies. Each Holder, in addition to being entitled to exercise all
rights provided to it herein, in the Indenture or in the Purchase Agreement or
granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The
Company 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 in any action for specific performance
the defense that a remedy at law would be adequate.
12. Successors. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns of each of
the parties. The Company hereby agrees to
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extend the benefits of this Agreement to any Holder of Registrable Securities,
and any such Holder may specifically enforce the provisions of this Agreement
as if an original party hereto.
13. Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
14. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York.
16. Severability. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way impaired or
affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
17. CZARS Held by the Company, etc. Whenever the consent or approval of
Holders of a specified percentage of principal amount of CZARS is required
hereunder, CZARS held by the Company or its Affiliates (other than subsequent
Holders of CZARS if such subsequent Holders are deemed to be Affiliates solely
by reason of their holdings of such CZARS) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the Initial Purchasers.
Very truly yours,
U.S. BANCORP
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
U.S. Bancorp Xxxxx Xxxxxxx
By: XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxxx X. Xxxx
------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
