EXHIBIT 4.2
U.S. BANCORP
FORM OF INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of December 30, 1998, among
U.S. Bancorp (the "Company"), and the prospective holders of shares of Common
Stock of the Company named on the signature pages hereof (the "Owners").
R E C I T A L S
WHEREAS, the parties hereto have entered into that certain
Agreement and Plan of Merger, dated September 3, 1998 (the "Merger Agreement"),
providing for, among other things, the transfer to the Owners of a number of
shares of the Company's Common Stock equal in the aggregate to the Merger
Consideration (as defined in Section 3.01 of the Merger Agreement);
WHEREAS, in connection with the Merger (as defined in Section
2.01 of the Merger Agreement) the Company will prepare and file a registration
statement in compliance with the Act with respect to the shares of the Company's
Common Stock to be received as Merger Consideration; and
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements herein contained,
and in order to induce the Owners to enter into the Merger Agreement, the
parties hereto agree as follows:
1. Certain Definitions. As used in this Indemnification Agreement, the
following terms shall have the following respective meanings:
1.1 The term "Act" means the Securities Act of 1933, as amended.
1.2 The term "Common Stock" means the common stock, par value
$1.25 per share, of the Company or any securities into which such shares shall
have been changed or any securities resulting from any reclassification or
recapitalization of such shares.
1.3 The term "Holder" means any person owning or having the right
to acquire Registrable Securities and any other parties specified in Section
4.3.
1.4 The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
1.5 The term "Registrable Securities" means (i) Common Stock
issuable or issued as Merger Consideration in accordance with the Merger
Agreement, and (ii) any Common Stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of the Shares (or the shares of Common Stock issued on
conversion thereof), excluding in all cases, however, any Shares sold or
transferred by a Holder in a transaction in which such Holder's rights under
this Indemnification Agreement are not assigned in accordance with the terms
hereof.
1.6 The term "SEC" shall mean the Securities and Exchange
Commission.
1.7 The term "Shares" shall mean the shares of the Company's
Common Stock received by the Owners as Merger Consideration.
2. Indemnification. In the event any Registrable Securities are included
in a registration statement filed by the Company as contemplated by the Merger
Agreement:
2.1 Indemnification by the Company. To the fullest extent
permitted by law, the Company will indemnify and hold harmless each Holder, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the 1934
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof, whether commenced or threatened)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (a) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including all documents incorporated therein by reference, any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (b) 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 (c) any violation or alleged violation by the Company
of the Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law, and the
Company will pay to each such Holder, underwriter or controlling person any
legal or other expenses reasonably incurred by them in connection with
investigating, defending or settling any such loss, claim, damage, liability, or
action, as such expenses are incurred; provided, however, that the indemnity
agreement contained in this Section 2.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any case for
any such loss, claim, damage, liability, or action to the extent that it arises
out of or is based upon an untrue statement which occurs in reliance upon and in
conformity with written information furnished by any such Holder, underwriter or
controlling person to the Company expressly for use in connection with such
registration.
2.2 Indemnification by the Holders. To the extent permitted by
law, each Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, severally
but not jointly, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof, whether commenced or
threatened) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration and each such Holder will pay to any
person intended to be indemnified pursuant to this Section 2.2, any legal or
other expenses reasonably incurred by them, as such expenses are incurred, in
connection with investigating, defending or settling any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this Section 2.2 shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided further that in no event shall any indemnity by any Holder
under this Section 2.2 exceed the gross proceeds from the offering received by
such Holder.
2.3 Indemnification Procedure. Promptly after receipt by any
indemnified party under this Section 2 of notice of the commencement of any
action (including any governmental action) involving a claim referred to in
Section 2.1 or Section 2.2, such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with one counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the indemnified party under this Section 2 except to the extent (and only to the
extent) the failure to deliver notice is materially prejudicial to its ability
to defend such action. Any omission to so deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2. The indemnifying party
will not, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not such indemnified party or any person who
controls such indemnified party is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of each such indemnified party from all liability arising
out of such claim, action, suit or proceeding. Notwithstanding anything to the
contrary set forth herein, and without limiting any of the rights set forth
above, in any event any party will have the right to retain, at its own expense,
counsel with respect to the defense of a claim.
2.4 Contribution. If the indemnification provided for in this
Section 2 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, action, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, action or expense in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage, action or expense as well
as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contributions pursuant to the Section 2.4 were to be
determined by pro rata or per capita allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the first sentence of this Section 2.4.
2.5 Survival. The obligations of the Company and Holders under
this Section 2 shall survive the completion of any offering of Registrable
Securities in a registration statement.
3. Restrictions on Offers and Sales. Each Holder agrees to give, at any
time during the periods (i) from January 17, 1999, until the earnings release on
or about January 21, 1999 (the "Earnings Release Date"), and (ii) after the two
week period following the Earnings Release Date, written notice to the Company
not less than five (5) business days prior to its intention to sell Common Stock
pursuant to the registration statement and the applicable prospectus. Each
Holder agrees that, upon receipt of notice from the Company, such Holder will
not dispose of the Common Stock or deliver the prospectus related thereto until
such Holder receives copies of a supplemented or amended prospectus provided by
the Company, or until such Holder is advised in writing by the Company that the
use of the prospectus may be resumed, and has received from the Company copies
of any additional supplemental filings which are incorporated by reference in
the prospectus. If so directed by the Company, such Holder will deliver to the
Company all copies, other than permanent file copies, then in such Holder's
possession, of the prospectus covering such Common Stock current at the time of
receipt of such notice. If the Company does not respond to a Holder's notice
within the five-day period specified above, the Holder shall be permitted to
sell such Common Stock commencing on the fifth business day.
4. Miscellaneous.
4.1 Governing Law. This Indemnification Agreement shall be
governed by, and interpreted in accordance with, the laws of the State of New
York applicable to contracts made and to be performed entirely within such
state.
4.2 Amendments and Waivers. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement will be
effective against the Company or any Holder, unless such modification, amendment
or waiver is approved in writing by the Company and Holders owning 66 2/3% of
the Registrable Securities; except that any modification, amendment or waiver to
this Agreement which materially, adversely and disproportionately affects less
than all of the Holders shall require the consent of each such Holder so
affected in order to be effective with respect to such Holder. The failure of
any party to enforce any of the provisions of this Agreement will in no way be
construed as a waiver of such provisions and will not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
4.3 Successors and Heirs. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and heirs of the parties hereto, as
well as their executors, administrators, guardians, conservators, trustees or
receivers in bankruptcy.
4.4 Notices. All notices requests and other communications
hereunder to a party shall be in writing and shall be deemed given (a) on the
date of delivery, if personally delivered or telecopied (with confirmation), (b)
on the first business day following the date of dispatch, if delivered by a
recognized next-day courier service, or (c) on the third business day following
the date of mailing, if mailed by registered or certified mail (return receipt
requested), in each case to such party at its address or telecopy number set
forth below or such other address or numbers as such party may specify by notice
to the parties hereto.
If to the Company, to:
U.S. Bancorp
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Mitau, Esq.
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxx X. Xxxxx, Esq.
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
If to a Holder, to:
His or her address as listed in the stock records of the Company
4.5 Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
IN WITNESS WHEREOF, the parties have executed this
Indemnification Agreement as of the date first above written.
Name:
U.S. BANCORP
By:
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Name:
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