REGISTRATION RIGHTS AGREEMENT
BETWEEN
U.S. RENTALS, INC.
A DELAWARE CORPORATION
AND
USR HOLDINGS, INC.
A CALIFORNIA CORPORATION
TABLE OF CONTENTS
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PAGE NO.
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1. Certain Definitions.................................................... 1
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2. Registration Rights.................................................... 3
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2.1 Demand Registration.............................................. 3
2.1.1 Size of Offering......................................... 3
2.1.2 Company Participation.................................... 3
2.1.3 Delay.................................................... 4
2.2 "Piggyback" Registration......................................... 5
2.2.1 Notice................................................... 5
2.2.2 Underwritten Offering.................................... 5
2.2.3 Best Efforts............................................. 5
2.2.4 Withdrawals.............................................. 6
2.3 Selection of Underwriters........................................ 6
3. Registration Procedures................................................ 6
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3.1 Copies; Review................................................... 6
3.2 Amendments....................................................... 6
3.3 Notification..................................................... 7
3.4 Information Included............................................. 7
3.5 Copies........................................................... 8
3.6 Blue Sky Registration............................................ 8
3.7 Other Registrations.............................................. 8
3.8 Certificates..................................................... 8
3.9 Other Actions.................................................... 8
3.10 Due Diligence.................................................... 9
3.11 Section 11(a) Notice............................................. 9
3.12 Expenses......................................................... 9
4. Indemnification........................................................ 9
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4.1 Indemnification by the Company................................... 9
4.2 Indemnification by Holder of Registrable Securities.............. 10
4.3 Contribution..................................................... 11
4.4 Conduct of Indemnification Proceedings........................... 11
5. Other Agreements....................................................... 12
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5.1 Holdback Agreements.............................................. 12
5.1.1 Restrictions on Public Sale by the Company............... 12
5.1.2 Restrictions on Public Sale by the Holder................ 12
5.2 Rule 144......................................................... 12
(i)
5.3 Representations and Warranties................................... 12
5.3.1 Validity................................................. 12
5.3.2 No Inconsistent Agreements............................... 13
5.3.3 Furnish Information...................................... 13
5.3.4 Assignment............................................... 13
6. Miscellaneous Provisions............................................... 13
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6.1 Amendments; Waivers.............................................. 13
6.2 Integration...................................................... 13
6.3 Interpretation; Governing Law.................................... 13
6.4 Headings......................................................... 13
6.5 Counterparts..................................................... 14
6.6 Successors and Assigns........................................... 14
6.7 Expenses; Legal Fees............................................. 14
6.8 Representation by Counsel; Interpretation........................ 14
6.9 Specific Performance............................................. 14
6.10 Time is of the Essence........................................... 14
6.11 Notices.......................................................... 14
(ii)
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT"), is entered into
as of January __, 1997, between U.S. Rentals, Inc., a Delaware corporation (the
"COMPANY"), and USR Holdings, Inc., a California corporation (the "HOLDER"). The
parties agree as follows.
RECITALS
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A. The Holder owns shares of the Company's Common Stock (the "COMMON
STOCK").
B. The Common Stock was issued without registration under the
Securities Act, and therefor, its resale by the Holder is subject
to restrictions under the Securities Act.
C. In connection with the Company's initial Offering of its Common
Stock the Company has agreed to enter into this Agreement with
the Holder.
1. CERTAIN DEFINITIONS
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As used in this Agreement:
"AFFILIATE" means any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with another Person.
"BUSINESS DAY" means any day that commercial banks are not authorized or
required to close in Los Angeles, California.
"COMMISSION" means the Securities and Exchange Commission or any other similar
or successor agency of the United States government administering the Securities
Act.
"COMMON STOCK" means the Common Stock of the Company, par value $0.01 per share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and any similar or
successor federal statute, and the rules and regulations of the Commission
thereunder, as in effect at the time.
"OFFERING" means the registration of the Company's securities under the
Securities Act, whether underwritten or not, for sale to the public.
"S-3 REGISTRATION STATEMENT" means a Registration Statement on Form S-3.
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"PERMITTED TRANSFEREE" means
(a) any entity all of the equity of which is directly or indirectly owned
by the transferor;
(b) in the case of a transferor who is an individual, (i) such
transferor's spouse and lineal descendants, (ii) such transferor's
successors, personal representatives and heirs, (iii) any trustee of
any trust created primarily for the benefit of any, some or all of
such spouse and lineal descendants (but that may include beneficiaries
that are charities) or of any revocable trust created by such
transferor, (iv) following the death of such transferor, all
beneficiaries under either such trust, (v) the transferor, in the case
of a transfer from any Permitted Transferee back to its transferor and
(vi) any entity all of the equity of which is directly or indirectly
owned by any of the foregoing; or
(c) any charitable or educational organization that is exempt from federal
income taxes.
"PERSON" means a corporation, an association, a trust, a partnership, a limited
liability company, a joint venture, an organization, a business, an individual,
a government or political subdivision thereof, or a governmental body.
"PROSPECTUS" means the prospectus included in any Registration Statement,
together with and including any amendment or supplement to such prospectus,
covering the Offering of any portion of the Registrable Securities covered by a
Registration Statement, and all material incorporated by reference in such
Prospectus.
"REGISTRABLE SECURITIES" means shares of the Common Stock held by the Holder or
otherwise acquired by the Holder (collectively, the "SHARES") and any securities
issued or issuable with respect to the Shares by way of a stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation, reclassification or other reorganization. A security
will cease to be a Registrable Security when it (a) has been effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (b) is distributed to the public pursuant to
Rule 144 (or any similar rule then in force) under the Securities Act or (c) has
otherwise been transferred and a new certificate not bearing a restrictive
legend and not subject to any stop transfer order lawfully has been delivered by
or on behalf of the Company and no other restriction on transfer exists.
"REGISTRATION STATEMENT" means a registration statement filed by the Company
with the Commission covering Registrable Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any similar
federal statute, together with the rules and regulations of the Commission
promulgated thereunder, as in effect at the time.
2
Other Definitions. The following terms have the meanings set forth in the
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following sections:
Definition Section
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"COMPANY" Introduction
"CONTROLLING PERSON" 6.1
"DEMAND NOTICE" 2.1
"DEMAND REGISTRATION STATEMENT" 2.1
"COMMON STOCK" Recitals
"OTHER SHARES" 2.1.2
"PIGGYBACK NOTICE" 2.2.1
"PIGGYBACK REGISTRATION STATEMENT" 2.2
"REGISTRATION EXPENSES" 5
"SHARES" 1
2. REGISTRATION RIGHTS
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2.1 DEMAND REGISTRATION. Commencing six months after the initial Offering of
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the Common Stock, the Holder may, by notice to the Company (the "DEMAND
NOTICE"), demand that the Company file, and the Company will file, a
Registration Statement as soon as practicable covering the Registrable
Securities specified in the Demand Notice (a "DEMAND REGISTRATION STATEMENT").
Such Demand Registration Statement will be filed on an appropriate form under
the Securities Act, no later than 90 days after the Company receives the Demand
Notice. The Company is only required to file two Demand Registration Statements
(other than on Form S-3). In addition, the Holder will be entitled at any time
while the Company is eligible to file Registration Statements on Form S-3, to
demand that the Company file and cause to be declared effective S-3 Registration
Statements as provided herein. The Company will use its best efforts to cause
any Demand Registration Statement to be declared effective on the date requested
by the managing underwriter for the Offering (no earlier than 60 days from the
date of the Demand Notice), or, if such Offering is not underwritten, as soon as
practicable after the filing with the Commission. The Company will keep such
Demand Registration Statement effective until the Offering is completed (but not
more than 180 days from the effective date of the Demand Registration
Statement).
2.1.1 SIZE OF OFFERING. The Holder will not make a Demand Notice unless
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the proposed size of the Offering is at least $10,000,000 (based
upon the reported trading price of the Registrable Securities at the
time of the Demand Notice).
2.1.2 COMPANY PARTICIPATION. The Company can elect to register equity
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securities of the Company in any Demand Registration Statement or to
participate in the Offering, by including any of its equity
securities in the Demand Registration Statement, subject to the
following:
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(a) NOTICE. The Company must give notice of such election to the
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Holder within 15 days after the Demand Notice was given to it,
including the number of Shares proposed to be sold by the
Company in the Offering (the "OTHER SHARES");
(b) CONDITIONS. The Company must agree to sell such Other Shares on
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the same basis provided in the underwriting arrangements
approved by the Holder and the Company (including standard
indemnification provisions) and to timely complete and execute
all questionnaires, powers of attorney, indemnities, holdback
agreements, underwriting agreements and other documents
reasonably required by such underwriting arrangements, by the
Commission, or by any state securities regulatory body;
(c) LIMITATION ON AMOUNT. The number of Other Shares that may be
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sold by the Company will be limited if the managing underwriter
decides that market conditions require a limitation. In such
event, the number of shares of Common Stock that may be sold in
the Offering will be allocated first to the Holder, second, to
the extent available, to the Company, and, third, to the extent
available, to any other party having registration rights with
respect to the Common Stock.
2.1.3 DELAY. The Company may delay the filing of a Demand Registration
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Statement if upon receipt of the Demand Notice (a) the Company
notifies the Holder that it is contemplating filing a registration
statement within 120 days of such demand, (b) the Company notifies
the Holder that a material event has occurred or is likely to occur
that has not been publicly disclosed that, if disclosed, would have
a material adverse effect on the Company and its ability to
consummate the Offering under the Demand Registration Statement, or
(c) the Company decides that the registration and offering could
interfere with any material financing, acquisition, disposition,
corporate reorganization or other material transaction involving the
Company or its subsidiaries. In the case of clause (a) of this
subsection, the Company will use its best efforts, as soon as
practicable, upon the earlier of the Company's abandonment of its
contemplated registration statement or the expiration of the 120-day
period to file the Demand Registration Statement, unless such Demand
Notice is withdrawn by the Holder. In the case of clause (b) or
clause (c), the Company may not delay the filing of the Demand
Registration Statement for more than 120 days from the date of the
Demand Notice unless such Demand Notice is withdrawn by the Holder.
The Company cannot exercise the foregoing rights of postponement
more than once in any 12-month period. If there is a postponement
under any clause above, the Demand Notice may be withdrawn by the
Holder by notice to the Company. In such case, no Demand Notice will
have been delivered for the purposes of Section 2.1.
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2.2 "PIGGYBACK" REGISTRATION. If at any time, or from time to time, the
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Company decides to file a Registration Statement covering any shares of its
Common Stock (other than a registration statement on Form S-4 or S-8, or
any form substituted therefor) for its own account or for the account of
any stockholder (a "PIGGYBACK REGISTRATION STATEMENT"), the Holder will be
entitled to include Registrable Securities in such registration and related
Offering on the following terms and conditions.
2.2.1 NOTICE. The Company will promptly give notice of such decision to
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the Holder (a "PIGGYBACK NOTICE"). The Holder will have the right to
request, by notice to the Company within ten (10) Business Days
after it receives the Piggyback Notice, that a specific number of
Registrable Securities held by the Holder be included in the
Piggyback Registration Statement and related underwritten Offering.
If the Piggyback Registration Statement relates to an underwritten
Offering, the Piggyback Notice must specify the name of the managing
underwriter for such Offering. The Piggyback Notice must also
specify the number of shares to be registered for the account of the
Company and for the account of any stockholder, and the intended
method of disposition of such shares.
2.2.2 UNDERWRITTEN OFFERING. If the Piggyback Registration Statement
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relates to an underwritten Offering, as a condition to participation
in such Piggyback Registration Statement the Holder must agree to
sell its Registrable Securities on the same basis provided in the
underwriting arrangements approved by the Company (including
standard indemnification provisions) and to timely complete and
execute all questionnaires, powers of attorney, indemnities,
holdback agreements, underwriting agreements and other documents
required under the terms of such underwriting arrangements, by the
Commission or by any state securities regulatory body.
2.2.3 BEST EFFORTS. The Company will use its best efforts to include in
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the Piggyback Registration Statement the number of Registrable
Securities requested in response to the Piggyback Notice. If the
managing underwriter for any underwritten Offering under the
Piggyback Registration Statement reasonably decides that inclusion
of all or any portion of the Holder's specified Registrable
Securities in such Offering would materially and adversely affect
the ability of the underwriters to sell all of the securities
requested to be included in such Offering, and delivers to the
Holder its written opinion to such effect, the number of securities
that may be sold in such Offering will be limited. Securities to be
sold will be allocated first to the Company (or, if the Offering is
being made principally for the account of another Person, to such
Person), second to the Holder, and, third, to any other party having
registration rights with respect to the Common Stock.
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2.2.4 WITHDRAWALS. The Holder will have the right to withdraw its
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Registrable Securities from the Piggyback Registration Statement,
but if it relates to an underwritten Offering, it may only do so
during the time period and on terms agreed upon by the Holder and
the underwriters for such underwritten Offering. The Company will,
on five (5) Business Days notice to the Holder, have the right to
withdraw any Piggyback Registration Statement at any time prior to
the effective date thereof.
2.3 SELECTION OF UNDERWRITERS. If the Registrable Securities covered by a
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Demand Registration Statement are to be sold in an underwritten Offering,
the managing underwriter of such Offering may be designated by the Holder.
Such underwriter must be reasonably acceptable to the Company. If the
Registrable Securities included in a Piggyback Registration Statement are
to be sold in an underwritten Offering, the managing underwriter of such
Offering will be designated by the Company.
3. REGISTRATION PROCEDURES
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The Company will use its best efforts to effect any registration under
Section 2 in a manner that permits the sale of the Registrable Securities
covered thereby in accordance with the intended method or methods of
disposition. The Company will, as promptly as practicable, do the following.
3.1 COPIES; REVIEW. At least five (5) Business Days before filing a
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Registration Statement or Prospectus, the Company will furnish to the
Holder (if the Holder is participating in such Registration Statement) (the
"REGISTERING HOLDER") and the underwriters, if any, copies of all such
documents proposed to be filed. Such documents will be subject to the
review of the Registering Holder and such underwriters (and their
respective counsel). The Company will not file any Registration Statement
or any Prospectus to which the Registering Holder or the underwriters, if
any, reasonably object. If the Registration Statement is a Piggyback
Registration Statement relating to an underwritten Offering and the
underwriters do not agree with such objection by the Registering Holder,
and the Registering Holder is permitted to withdraw its Registrable
Securities from such Offering, the Company can file the Piggyback
Registration Statement notwithstanding such objection by the Registering
Holder.
3.2 AMENDMENTS. The Company will (a) prepare and file with the Commission
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such amendments and post-effective amendments to the Registration Statement
as may be necessary to keep the Registration Statement effective for the
applicable time period required herein, (b) 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 (c) comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended methods of disposition by
the Registering Holder set forth in such Registration Statement or
Prospectus supplement.
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3.3 NOTIFICATION. The Company will promptly notify the Registering Holder and
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the managing underwriters, and (if requested by any such Person) confirm
such notification in writing, (a) when the Prospectus has been filed, and,
with respect to the Registration Statement, when it has become effective,
(b) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (c)
of the issuance of any stop order suspending the effectiveness of the
Registration Statement, or the refusal or suspension of qualification of
registration of Registrable Securities, or the initiation of any
proceedings for that purpose, (d) if at any time the representations and
warranties of the Company contemplated by Section 8 cease to be true and
correct, and (e) of any event that makes any material statement made in the
Registration Statement, the Prospectus or any document incorporated therein
by reference untrue or that 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 in any
material respect. The Company will make every reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible moment. If any event
contemplated by clause (e) occurs, the Company will promptly prepare a
supplement or post-effective amendment to the Registration Statement or the
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. Upon receipt of any notice
from the Company that any event of the kind described in clause (e) has
happened, the Registering Holder will discontinue offering the Registrable
Securities until the Registering Holder receives the copies of the
supplemented or amended Prospectus contemplated by the previous sentence,
or until it is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.
The period during which distribution of the Shares is suspended will not be
counted toward completion of the required period of effectiveness for any
Registration Statement.
3.4 INFORMATION INCLUDED. If requested by the managing underwriters or the
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Registering Holder, the Company will immediately incorporate in a
Prospectus supplement or post-effective amendment such information as the
managing underwriters and the Registering Holder agree should be included
therein relating to the sale of the Registrable Securities, including, but
not limited to, information with respect to the number of Registrable
Securities being sold to such underwriters or other Persons, the purchase
price being paid therefor by such underwriters or other Persons and any
other terms of the distribution of the Registrable Securities to be sold in
such Offering. Such information will include, if applicable, any required
disclosure of arrangements with underwriters. The Company will make all
required filings of such Prospectus supplement or post-effective amendment
as promptly as practicable after being notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
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3.5 COPIES. The Company will (a) promptly furnish to the Registering Holder
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and each managing underwriter 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), and (b) promptly deliver to the Registering Holder and the
underwriters 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 the Registering Holder
and the underwriters in connection with the Offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto.
3.6 BLUE SKY REGISTRATION. Prior to any Offering of Registrable Securities
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covered by a Registration Statement under Section 2, the Company will
register or qualify or cooperate with the Registering Holder, the
underwriters and their respective counsel in connection with the
registration or qualification of such Registrable Securities under the
securities or blue sky laws of such jurisdictions as the Registering Holder
or underwriter reasonably request in writing, and do any and all other acts
or things necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities. The Company will not be
required to take any actions under this subsection if such actions would
require it to submit to the general taxation of such jurisdiction or to
file therein any general consent to service of process, unless this
limitation means that the Registrable Securities would not be qualified (or
exempt from qualification) for offer and sale in at least 20 states.
3.7 OTHER REGISTRATIONS. The Company will use its best efforts to cause the
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Registrable Securities covered by the Registration Statement to be
registered with or approved by such governmental agencies or authorities
other than the Commission and state securities regulatory bodies as may be
necessary to enable the Registering Holder or the underwriters to
consummate the disposition of such Registrable Securities.
3.8 CERTIFICATES. The Company will cooperate with the Registering Holder and
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the managing underwriter to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold that do not
bear any restrictive legends. Such certificates will be in such
denominations and registered in such names as the managing underwriter
requests at least two business days prior to any sale of Registrable
Securities to the underwriters.
3.9 OTHER ACTIONS. In addition, the Company will (a) make such representations
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and warranties to the Registering Holder and the underwriters as are
customarily made by issuers to underwriters in primary underwritten
offerings (or as may be reasonably requested by the underwriters), (b)
obtain opinions of counsel to the Company and updates (which counsel and
opinions must be reasonably satisfactory to the Registering Holder), (c)
obtain customary "cold comfort" letters and updates from the Company's
independent certified public accountants addressed to the underwriters, and
use its best
8
efforts to obtain such a letter for the Registering Holder or to obtain a
letter from such accountants authorizing the Registering Holder to rely on
such "cold comfort" letter, (d) if an underwriting agreement is entered
into, ensure that it sets forth in full the indemnification provisions and
procedures of Section 6 with respect to the Company and the Registering
Holder, and (e) deliver such documents and certificates as may be requested
by the Registering Holder and the managing underwriter to evidence
compliance with clause (a) and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company
with the Registering Holder. The above will be done in connection with each
closing under such underwriting or similar agreement or as and to the
extent required thereunder.
3.10 DUE DILIGENCE. The Company will make available for inspection by the
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Registering Holder, any underwriter participating in any, and any attorney
or accountant retained by the Registering Holder or managing underwriter,
all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to be available to discuss and to supply all information
reasonably requested by any such person in connection with the Registration
Statement. All such records, information or documents will be subject to
standard confidentiality arrangements.
3.11 SECTION 11(a) NOTICE. The Company will make generally available to its
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stockholders earnings statements satisfying the provisions of Section 11(a)
of the Securities Act.
3.12 EXPENSES. Except as set forth in the next to last sentence of this
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Section, all expenses incident to the Company's performance of or
compliance with this Agreement, including, but not limited to, all
registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger expenses,
telephone and delivery expenses, and fees and disbursements of Company
counsel and of independent certified public accountants of the Company
(including the expenses of any special audit required by or incident to
such performance), will be borne by the Company. The Company will also pay
its internal expenses, the expense of any annual audit and the fees and
expenses of any Person retained by the Company. In addition, the Company
will pay all reasonable fees and disbursements of counsel to the Holder.
All such expenses are referred to as "REGISTRATION EXPENSES." All
underwriting fees and commissions with respect to an underwritten Offering,
and transfer taxes, if any, will be borne by the Holder in proportion to
the number of Registrable Securities sold by it.
4. INDEMNIFICATION
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4.1 INDEMNIFICATION BY THE COMPANY. The Company will indemnify and hold
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harmless the Holder, its officers, directors, agents (including, but not
limited to counsel) and employees and each Person who controls the Holder
(within the meaning of Section 15 of the Securities Act) (each, a
"CONTROLLING PERSON") (all of the foregoing are "INDEMNIFIED PERSONS") from
and against any and all losses, claims, damages and
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liabilities (including any investigation, legal or other expenses
("LOSSES") reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted) to
which the Indemnified Person may become subject under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such Losses arise out of or are based
upon (a) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus or preliminary
prospectus or any amendment or supplement thereto or 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, or (b)
any violation by the Company of the Securities Act or the Exchange Act, or
other federal or state law applicable to the Company and relating to any
action or inaction required of the Company in connection with such
registration. In addition, the Company will reimburse the Indemnified
Person for any investigation, legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such
Loss. The Company will not be liable with respect to the portion of any
such Loss that arises out of or is based upon any alleged untrue statement
or alleged omission made in such Registration Statement, preliminary
Prospectus, Prospectus, or amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the
Indemnified Person specifically for use therein. Such indemnity will remain
in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person, and will survive the transfer of such
securities by the Indemnified Person. The Company will also indemnify
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their officers
and directors and each Person who controls such Persons (within the meaning
of Section 15 of the Securities Act) to the same extent customarily
requested by such Persons in similar circumstances.
4.2 INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. If the Holder sells
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Registrable Securities under a Prospectus that is part of a Registration
Statement, the Holder will indemnify and hold harmless the Company, its
directors and each officer who signed such Registration Statement and each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act) under the same circumstances as the foregoing indemnity
from the Company to the Holder but only to the extent that such Losses
arise out of or are based upon any untrue statement of a material fact or
omission of a material fact that was made in the Prospectus, the
Registration Statement, or any amendment or supplement thereto, in reliance
upon and in conformity with written information relating to the Holder
furnished to the Company by the Holder expressly for use therein. In no
event will the aggregate liability of the Holder exceed the amount of the
net proceeds received by the Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation. Such indemnity
will remain in full force and effect regardless of any investigation made
by or on behalf of the Company or such officer, director, employee or
Controlling Person, and will survive the transfer of such securities by the
Holder. The Company and the Holder will be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar securities
10
industry professionals participating in the distribution, to the same
extent as customarily furnished by such Persons in similar circumstances.
4.3 CONTRIBUTION. If the indemnification provided for in the foregoing
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Sections is unavailable to an indemnified party or is insufficient to hold
such indemnified party harmless for any Losses in respect of which the
foregoing Sections would otherwise apply by their terms (other than by
reason of exceptions provided in the foregoing Sections), then each
applicable indemnifying party, in lieu of indemnifying such indemnified
party, will have a joint and several obligation to contribute to the amount
paid or payable by such indemnified party as a result of such Losses. Such
contribution will be in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party, on the one hand, and indemnified party, on the other hand, will be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact, has been
taken or made by, or relates to information supplied by, such indemnifying
party or indemnified party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party as a
result of any such Losses will be deemed to include any investigation,
legal or other fees or expenses incurred by such party in connection with
any investigation or proceeding, to the extent such party would have been
indemnified for such expenses if the indemnification provided for in the
foregoing Sections was available to such party.
4.4 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
--------------------------------------
indemnification hereunder will (a) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification, and (b)
permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. Any Person
entitled to indemnification hereunder will have the right to employ
separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel will be at the expense of such Person and
not of the indemnifying party unless (x) the indemnifying party has agreed
to pay such fees or expenses, (y) the indemnifying party has failed to
assume the defense of such claim and employ counsel reasonably satisfactory
to such Person, or (z) in the opinion of counsel of the Person to be
indemnified, a conflict of interest may exist between such Person and the
indemnifying party with respect to such claims. In the case of (z) 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 will not have the right to assume the defense of such
claim on behalf of such Person. If such defense is not assumed by 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). No indemnified party will be required
to consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term the
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giving of a release, by all claimants or plaintiffs, to such indemnified
party from all liability in respect to such claim or litigation. Any
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of
more than one counsel in each relevant jurisdiction for all parties
indemnified by such indemnifying party with respect to such claim.
5. OTHER AGREEMENTS
----------------
5.1 HOLDBACK AGREEMENTS.
-------------------
5.1.1 RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company will not
------------------------------------------
effect any public or private sale or distribution of securities of
the same class as the Registrable Securities, or securities
convertible into or exchangeable or exercisable for securities of
the same class as the Registrable Securities during the 10-day
period prior to, and during the 90-day period beginning on the
closing date of, an Offering made pursuant to Demand Notice.
5.1.2 RESTRICTIONS ON PUBLIC SALE BY THE HOLDER. If requested by the
-----------------------------------------
managing underwriter of an underwritten Offering, the Holder will
not effect any public sale or distribution of securities of the same
class (or securities exchangeable or exercisable for or convertible
into securities of the same class) as the securities included in the
Offering (including, but not limited to, a sale pursuant to Rule 144
of the Securities Act) during the 10-day period prior to and the 90-
day period (in the case of Offerings subsequent to the initial
Offering (or shorter period requested by the underwriter) beginning
on the effective date of, such Offering.
5.2 RULE 144. The Company will file, on a timely basis, all reports required
--------
to be filed by it under the Securities Act and the Exchange Act, and will
take such further action and provide such documents as any holder of
Registrable Securities may request, all to the extent required from time to
time to enable the Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the
conditions 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 Commission. Upon the request of the Holder, the
Company will deliver to the Holder a statement verifying that it has
complied with such information and requirements.
5.3 REPRESENTATIONS AND WARRANTIES.
------------------------------
5.3.1 VALIDITY. The Company represents and warrants to the Holder that
--------
this Agreement has been duly and validly executed and delivered by
the Company and constitutes a legally valid and binding agreement of
the Company enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and except that
the remedy of
12
specific performance and injunctive and other forms of equitable
relief are subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought and except as rights to indemnity and contribution hereunder
may be limited by federal or state securities laws.
5.3.2 NO INCONSISTENT AGREEMENTS. The Company represents and warrants
--------------------------
that it has not previously entered into, and will not on or after
the date of this Agreement enter into, any agreement with respect to
its securities that is inconsistent with the terms of this
Agreement, including any agreement that impairs or limits the
registration rights granted to the Holder or that otherwise
conflicts with the provisions hereof or would preclude the Company
from discharging its obligations under this Agreement.
5.3.3 FURNISH INFORMATION. The Company will promptly deliver to the
-------------------
Holder copies of all financial statements, reports and proxy
statements that the Company is required to send to its stockholders
generally.
5.3.4 ASSIGNMENT. This Agreement and the rights hereunder are assignable
----------
by any Holder to Permitted Transferees in connection with the
transfer of Registrable Securities, and upon assignment such
Permitted Transferees will become "HOLDER" under this Agreement.
Such Permitted Transferees must agree in writing to be bound by the
terms of this Agreement and to any lender in connection with a loan
to a Holder that is secured by Registerable Securities, so long as
such lender agrees in writing to be bound by the terms hereof. Other
than as set forth above, this Agreement is not assignable. Further,
no rights under this Agreement may be assigned without the
concurrent assignment of the related Shares.
6. MISCELLANEOUS PROVISIONS
------------------------
6.1 AMENDMENTS; WAIVERS. Amendments, waivers, demands, consents and approvals
-------------------
under this Agreement must be in writing and designated as such. No failure
or delay in exercising any right will be deemed a waiver of such right.
6.2 INTEGRATION. This Agreement is the entire agreement between the parties
-----------
pertaining to its subject matter, and supersedes all prior agreements and
understandings of the parties in connection with such subject matter.
6.3 INTERPRETATION; GOVERNING LAW. This Agreement is to be construed as a
-----------------------------
whole and in accordance with its fair meaning. This Agreement is to be
interpreted in accordance with the laws of the State of California.
6.4 HEADINGS. Headings of Sections and subsections are for convenience only
--------
and are not a part of this Agreement.
13
6.5 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
------------
all of which constitute one agreement.
6.6 SUCCESSORS AND ASSIGNS. This Agreement is binding upon and inures to the
----------------------
benefit of each party and such party's respective heirs, personal
representatives, successors and assigns, including any Permitted
Transferees. Nothing in this Agreement, express or implied, is intended to
confer any rights or remedies upon any other person.
6.7 EXPENSES; LEGAL FEES. Each party will pay its own expenses in the
--------------------
negotiation, preparation and performance of this Agreement. The prevailing
party in any action relating to this Agreement will be entitled to recover,
in addition to other appropriate relief, reasonable legal fees, costs and
expenses incurred in such action.
6.8 REPRESENTATION BY COUNSEL; INTERPRETATION. Each party acknowledges that it
-----------------------------------------
has been represented by counsel in connection with this Agreement. Any rule
of law, including, but not limited to, Section 1654 of the California Civil
Code, or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the party that drafted it,
has no application and is expressly waived.
6.9 SPECIFIC PERFORMANCE. In view of the uniqueness of the matters
--------------------
contemplated by this Agreement, the Indemnitee would not have an adequate
remedy at law for money damages if this Agreement is not being performed in
accordance with its terms. The Company therefore agrees that the Indemnitee
will be entitled to specific enforcement of the terms hereof in addition to
any other remedy to which the Indemnitee may be entitled.
6.10 TIME IS OF THE ESSENCE. Time is of the essence in the performance of each
----------------------
and every term, provision and covenant in this Agreement.
6.11 NOTICES. Any notice to be given hereunder must be in writing and delivered
-------
as follows (or to another address as either shall designate in writing):
IF TO U.S. RENTALS, INC.: IF TO USR HOLDINGS, INC.:
------------------------ ------------------------
0000 Xxxxxxx Xxxxx, Xxxxx 000 At the most recent address on the books
Xxxxxxx, Xxxxxxxxxx 00000 and records of the Company for USR
Attention: President Holdings, Inc.
[ REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ]
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This Registration Rights Agreement has been signed as of the date on
page one.
U.S. RENTALS, INC.
_____________________________
By:
Its:
USR HOLDINGS, INC.
_____________________________
By: Xxxxxxx X. Xxxxxxx
Its: President
