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Registration Rights Agreement
Dated as of December 12, 1996
among
USI American Holdings, Inc.,
U.S. Industries, Inc.
and
BA Securities, Inc.
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
December 12, 1996, among USI American Holdings, Inc., a Delaware corporation
(the "Issuer"), U.S. Industries, Inc., a Delaware corporation (the "Company")
and BA Securities, Inc. (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated
December 6, 1996, among the Issuer, the Company and the Initial Purchaser (the
"Purchase Agreement"), which provides for the sale by the Issuer to the Initial
Purchaser of an aggregate of $125 million principal amount of the Issuer's 7
1/4% Senior Notes Due December 1, 2006, Series A (such Notes, including the
guarantees of the Company endorsed thereon, herein called the "Securities"). In
order to induce the Initial Purchaser to enter into the Purchase Agreement, the
Issuer and the Company have agreed to provide to the Initial Purchaser and its
direct and indirect transferees the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time, and the rules and regulations of the SEC thereunder.
"1934 Act" shall mean the Securities Exchange Act of l934, as
amended from time to time, and the rules and regulations of the SEC thereunder.
"Closing Date" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Issuer; provided, however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.
"Effective Time" shall mean the time that and date of which the SEC
declares any Registration Statement effective under the 1933 Act or as of which
such Registration Statement otherwise becomes effective.
"Exchange Offer" shall mean the exchange offer by the Issuer of
Exchange Securities for Registrable Securities pursuant to Section 2.1.
"Exchange Offer Registration" shall mean a registration under the
1933 Act effected pursuant to Section 2.1.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) under the 1933 Act, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all filings
and other material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2.1.
"Exchange Securities" shall mean the 7 1/4% Senior Notes Due
December 1, 2006, Series B issued by the Issuer under the Indenture (including
the guarantees of the Company endorsed thereon) containing terms identical to
the Securities in all material respects (except for references to certain
interest rate provisions, restrictions on transfers and restrictive legends), to
be offered to Holders of Registrable Securities in exchange for Registrable
Securities pursuant to the Exchange Offer.
"Holder" shall mean the Initial Purchaser, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture.
"Indenture" shall mean the Indenture dated as of December 12, 1996,
among the Issuer, the Company and PNC Bank, National Association, as trustee,
relating to the Securities and the Exchange Securities, as the same may be
amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the
preamble.
"Issuer" shall have the meaning set forth in the preamble and shall
also include the Issuer's successors.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided, however, that whenever the consent or approval
of Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Issuer and other obligors on the
Securities, the Company, or any Affiliate (as defined in the Indenture) of the
Issuer shall be disregarded in determining whether such consent or approval was
given by the Holders of such required percentage amount.
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"NASD" shall mean National Association of Securities Dealers, Inc.
"Participating Broker-Dealer" shall mean BA Securities, Inc. and
any other broker-dealer which makes a market in the Securities and exchanges
Registrable Securities in the Exchange Offer for Exchange Securities.
"Person" or "person" shall mean an individual, partnership,
corporation, limited liability company, trust, unincorporated organization or
other entity, or a government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus contained in a Registration
Statement or furnished pursuant to this Agreement, including any preliminary or
summary prospectus, and any such prospectus as amended or supplemented by any
prospectus supplement, including any such prospectus supplement with respect to
the terms of the offering of any portion of the Registrable Securities covered
by a Shelf Registration Statement, and by all other amendments and supplements
to a prospectus, including post-effective amendments, and in each case including
all filings and other material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Registrable Securities" shall mean the Securities; provided,
however, that any particular Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Securities shall have
been declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities have
been sold to the public pursuant to Rule l44 (or any similar provision then in
force, but not Rule 144A) under the 1933 Act, (iii) such Securities shall have
ceased to be outstanding, or (iv) the Exchange Offer is consummated (except in
the case of Securities purchased from the Issuer and continued to be held by the
Initial Purchaser).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Issuer and the Company with this Agreement,
including without limitation (i) all SEC, stock exchange or NASD registration
and filing fees, including, if applicable, the fees and expenses of any
"qualified independent underwriter" (and its counsel) that is required to be
retained by any holder of Registrable Securities in accordance with the rules
and regulations of the NASD, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws and compliance with the
rules of the NASD (including reasonable fees and disbursements of
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counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities and
any filings with the NASD), (iii) all expenses of any Person in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements thereto,
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all fees
and expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges (which listing
shall be at the sole discretion of the Issuer), (v) all rating agency fees, (vi)
the fees and disbursements of counsel for the Issuer and the Company and of the
independent public accountants for the Issuer and the Company, including the
expenses of any special audits or reviews or "cold comfort" letters required by
or incident to such performance and compliance, (vii) the fees and expenses of
the Trustee, any authenticating agent, any paying agent, any escrow agent or any
custodian, (viii) the reasonable fees and disbursements of Fried, Frank, Harris,
Shriver & Jacobson, special counsel representing the Holders of Registrable
Securities, and (ix) any fees and disbursements of the underwriters customarily
required to be paid by issuers or sellers of securities and the fees and
expenses of any special experts retained by the Issuer and the Company in
connection with any Registration Statement, but excluding underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a Holder.
"Registration Statement" shall mean an Exchange Offer
Registration Statement or a Shelf Registration Statement.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant
to Section 2.2.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Issuer pursuant to Section 2.2, which covers all the
Registrable Securities on an appropriate form under Rule 415 under the 1933 Act,
or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Special Circumstance Holder" shall have the meaning set forth in
Section 2.2(a).
"TIA" shall mean the Trust Indenture Act of 1939, as amended, and
the rules and regulations of the SEC thereunder.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
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2. Registration Under the 1933 Act.
2.1 Exchange Offer. (a) The Issuer and the Company shall (i) prepare
and, as soon as practicable but not later than 45 days following the Closing
Date, file with the SEC an Exchange Offer Registration Statement with respect to
a proposed Exchange Offer and the issuance and delivery to the Holders, in
exchange for the Registrable Securities, a like principal amount of Exchange
Securities, which will have terms identical in all material respects to the
Notes (except that the Exchange Notes will not contain terms with respect to
transfer restrictions or interest rate increases as described herein), (ii) use
their best efforts to cause the Exchange Offer Registration Statement to be
declared effective under the 1933 Act within 135 days following the Closing
Date, (iii) use their best efforts to keep the Exchange Offer Registration
Statement effective until the closing of the Exchange Offer, and (iv) use their
best efforts to cause the Exchange Offer to be consummated not later than 165
days following the Closing Date. The Exchange Securities will be issued under
the Indenture. Promptly upon the effectiveness of the Exchange Offer
Registration Statement, the Issuer shall commence the Exchange Offer, it being
the objective of such Exchange Offer to enable each Holder eligible and electing
to exchange Registrable Securities for Exchange Securities (assuming that such
Holder (A) is not an affiliate of the Issuer within the meaning of Rule 405
under the 1933 Act, (B) is not a broker-dealer tendering Registrable Securities
acquired directly from the Issuer for its own account, (C) acquired the Exchange
Securities in the ordinary course of such Holder's business, and (D) has no
arrangements or understandings with any person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities) to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions under the 1933 Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States.
(b) In connection with the Exchange Offer, the Issuer and the
Company shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period
of not less than 20 Business Days (as defined in Section 14(d) under the
Exchange Act) after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as
the "Exchange Period");
(iii) utilize the services of the Depository for the
Exchange Offer;
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(iv) permit Holders to withdraw tendered Registrable
Securities at any time prior to 5:00 p.m. (Eastern Time), on the last
business day of the Exchange Period, by sending to the institution
specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange, and a statement that such
Holder is withdrawing his election to have such Securities exchanged;
(v) notify each Holder that any Registrable Security not
tendered will remain outstanding and continue to accrue interest, but will
not retain any rights under this Agreement (except in the case of the
Initial Purchaser and Participating Broker-Dealers as provided herein);
and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
(c) As soon as practicable after the close of the Exchange Offer,
the Issuer and the Company shall:
(i) accept for exchange all Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement and
the letter of transmittal which shall be an exhibit thereto;
(ii) deliver to the Trustee for cancellation all
Registrable Securities so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities so accepted
for exchange in a principal amount equal to the principal amount of the
Registrable Securities of such Holder so accepted for exchange.
(d) Interest on each Exchange Security will accrue from the last
date on which interest was paid on the Registrable Securities surrendered in
exchange therefor or, if no interest has been paid on the Registrable
Securities, from the date of original issuance thereof. The Exchange Offer shall
not be subject to any conditions, other than (i) that the Exchange Offer, or the
making of any exchange by a Holder, does not violate applicable law or any
applicable interpretation of the staff of the SEC, (ii) the due tendering of
Registrable Securities in accordance with the Exchange Offer, (iii) that each
Holder of Registrable Securities exchanged in the Exchange Offer shall have
represented that all Exchange Securities to be received by it shall be acquired
in the ordinary course of its business and that at the time of the consummation
of the Exchange Offer it shall have no arrangement or understanding with any
person to participate in the distribution (within the meaning of the 1933 Act)
of the Exchange Securities and shall have made
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such other representations as may be reasonably necessary under applicable SEC
rules, regulations or interpretations to render the use of Form S-4 or other
appropriate form under the 1933 Act available, and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer which, in the
Issuer's judgment, would reasonably be expected to impair the ability of the
Issuer to proceed with the Exchange Offer. The Issuer shall inform the Initial
Purchaser of the names and addresses of the Holders to whom the Exchange Offer
is made, and the Initial Purchaser shall have the right to contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
2.2 Shelf Registration. (a) If (i) because of any changes in law,
SEC rules or regulations or applicable interpretations thereof by the staff of
the SEC, the Issuer and the Company are not permitted to effect the Exchange
Offer as contemplated by Section 2.1, (ii) for any other reason the Exchange
Offer is not consummated within 165 days following the original issue of the
Registrable Securities (it being understood that the Exchange Offer will be
deemed to have been consummated if conducted and closed in compliance with
Section 2.1 hereof regardless of the principal amount, if any, of Registrable
Securities tendered pursuant thereto), (iii) the Initial Purchaser so requests
with respect to Registrable Securities held by it which are not eligible to be
exchanged for Exchange Securities in the Exchange Offer, or (iv) a Holder (A) is
not permitted by applicable law to participate in the Exchange Offer based upon
written advice of counsel furnished to the Issuer to the effect that such Holder
may not be legally able to participate in the Exchange Offer, or (B) elects to
participate in the Exchange Offer but (based upon written advice of counsel
furnished to the Issuer) does not receive fully tradeable Exchange Securities
pursuant to the Exchange Offer (any such Holder herein called a "Special
Circumstance Holder"), then the Issuer and the Company shall, at their cost and
expense:
(1) As promptly as practicable, file with the SEC, and
thereafter shall use their best efforts to cause to be declared effective
as promptly as practicable, a Shelf Registration Statement relating to the
offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by the
Majority Holders participating in the Shelf Registration and set forth in
such Shelf Registration Statement.
(2) Use their best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming
part thereof to be usable by Holders for a period of three years (or one
year in the case of a request by the Initial Purchaser) from the date of
the original issue of the Securities, or for such shorter period that will
terminate when all Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be outstanding or otherwise to be Registrable
Securities.
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(3) Notwithstanding any other provisions hereof, use their
best efforts to ensure that (x) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (y) any 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, and (z) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements, in light of the circumstances under which they were
made, not misleading.
(b) The Issuer and the Company shall, if necessary, supplement or
amend the Shelf Registration Statement, as required by Section 3(b), and shall
furnish to the Holders of Registrable Securities copies of any such supplement
or amendment promptly after its being used or filed with the SEC.
(c) The Issuer and the Company shall not be required to include any
Registrable Securities of a Holder in any Shelf Registration Statement pursuant
to this Agreement unless such Holder furnishes to the Issuer, within 20 business
days after receipt by such Holder of a request therefor, such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Issuer and the Company may reasonably request for
use in connection with such Shelf Registration Statement.
2.3 Expenses. The Issuer and the Company shall pay all Registration
Expenses in connection with any registration pursuant to Section 2.1 or 2.2.
Each Holder shall pay all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
2.4 Effectiveness. (a) The Issuer and the Company will be deemed not
to have used their best efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, to become, or
to remain, effective during the requisite period if the Issuer or the Company
voluntarily takes any affirmative action that would, or omits to take any action
which omission would, result in any such Registration Statement not being
declared effective or in the Holders of Registrable Securities covered thereby
not being able to exchange or offer and sell such Registrable Securities during
that period as and to the extent contemplated hereby, unless such action is
required by applicable law.
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(b) An Exchange Offer Registration Statement pursuant to Section 2.1
or a Shelf Registration Statement pursuant to Section 2.2 will not be deemed to
have become effective unless it has been declared effective by the SEC;
provided, however, that if, after it has been declared effective, the Exchange
Offer or the offering of Registrable Securities pursuant to a Shelf Registration
Statement, as the case may be, is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, such Registration Statement will be deemed not to have become effective
during the period of such interference, until the Exchange Offer or the offering
of Registrable Securities pursuant to such Shelf Registration Statement, as the
case may be, may legally resume.
2.5 Interest. The Indenture and/or the Securities will provide that
if (a) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 45th day following the date of the original issue
of the Securities, (b) the Exchange Offer Registration Statement is not declared
effective on or prior to the 135th day following the date of original issue of
the Securities, (c) neither the Exchange Offer is consummated nor the Shelf
Registration Statement is declared effective on or prior to the 165th day
following the date of the original issue of the Securities, or (d) a Shelf
Registration Statement is required to be filed because of the request of the
Initial Purchaser or a Special Circumstance Holder, 45 days following the
request by any such Initial Purchaser or Special Circumstance Holder that the
Issuer and the Company file the Shelf Registration Statement (or 90 days if the
Shelf Registration Statement is reviewed by the SEC), then the parties hereto
agree that the interest rate borne by the Securities (except in the case of
clause (d) above, in which case only the Securities which have not been
exchanged in the Exchange Offer) shall be increased by 0.50% per annum. The
Indenture and/or the Securities further will provide that upon (i) the filing of
the Exchange Offer Registration Statement or the Shelf Registration Statement in
the case of clause (a) above, (ii) the effectiveness of the Exchange Offer
Registration Statement in the case of clause (b) above, (iii) the date of
consummation of the Exchange Offer or effectiveness of the Shelf Registration
Statement in the case of clause (c) above, or (iv) the effectiveness of the
Shelf Registration Statement in the case of clause (d) above, the interest rate
borne by the Securities from the date of such filing, effectiveness or the date
of such consummation or effectiveness, as the case may be, will be reduced to
the original interest rate borne by the Securities; provided, however, that, if
after any such reduction in interest rate, a different event specified in clause
(a), (b), (c) or (d) above occurs, the interest rate borne by the relevant
Securities shall again be increased pursuant to the foregoing provisions.
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3. Registration Procedures.
In connection with the obligations of the Issuer and the Company
with respect to Registration Statements pursuant to Sections 2.1 and 2.2, the
Issuer and the Company shall:
(a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Issuer, (ii) shall, in the
case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof, and (iii) shall comply as to form in
all material respects with the requirements of the applicable form and include
or incorporate by reference all financial statements required by the SEC to be
filed therewith or incorporated by reference therein, and use their best efforts
to cause such Registration Statement to become effective and remain effective in
accordance with Section 2;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period; and
cause each Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act, and
comply with the provisions of the 1933 Act applicable to them with respect to
the disposition of all securities covered by each Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement;
(c) in the case of a Shelf Registration: (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits, in order to facilitate the public sale or
other disposition of the Registrable Securities; and (iii) hereby consent to the
use of the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Registrable Securities in connection with the offering and
sale of the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
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(d) use their best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable each such Holder
and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the Issuer
and the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which they are not so qualified or to subject themselves to
taxation in respect of doing business in any jurisdiction in which they are not
otherwise so subject;
(e) notify promptly each Holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Issuer that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) in the case of a Shelf Registration, if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Issuer contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any (which shall not include the
Purchase Agreement), relating to the offering cease to be true and correct in
all material respects, (v) of the happening of any event or the discovery of any
facts during the period a Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus untrue
in any material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements therein not
misleading, and (vi) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification of the Registrable Securities or
the Exchange Securities, as the case may be, for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(f) in the case of the Exchange Offer Registration Statement: (i)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be reasonably acceptable to the Initial
Purchaser, and which shall contain a summary statement of the positions taken or
policies made by the staff of the
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SEC with respect to the potential "underwriter" status of any broker-dealer that
holds Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities and that will be the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities to be received by such broker-dealer in the Exchange Offer, whether
such positions or policies have been publicly disseminated by the staff of the
SEC or such positions or policies, in the reasonable judgment of the Initial
Purchaser and its counsel, represent the prevailing views of the staff of the
SEC, including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Securities; (ii) furnish to each Participating Broker-Dealer who has delivered
to the Issuer the notice referred to in paragraph (e) above, without charge, as
many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary Prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request; (iii)
hereby consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any person
subject to the prospectus delivery requirements of the SEC, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto; and (iv) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange Offer
(A) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer"
; and (B) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (A) above and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the 1933
Act; and
(g) in the case of any Exchange Offer Registration Statement, each
of the Issuer and the Company agrees to deliver to the Initial Purchaser on
behalf of the Participating Broker-Dealers upon the effectiveness of the
Exchange Offer Registration Statement (i) an opinion of counsel substantially in
the form attached hereto as Exhibit A hereto, (ii) an officers' certificate
substantially in the form customarily delivered in a public offering of debt
securities, and (iii) a comfort letter in customary form if permitted by
Statement on Auditing Standards No. 72 of the American Institute of Certified
Public Accountants (or if such a comfort letter is not permitted, an agreed upon
procedures letter in customary form);
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(h) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchaser, and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities, copies of any request by the SEC or
any state securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(i) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(j) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference and all exhibits thereto, unless
requested);
(k) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the underwriters, if any, may
reasonably request at least two business days prior to the closing of any sale
of Registrable Securities;
(l) upon the occurrence of any event or the discovery of any facts,
each of the kind described in paragraph (e)(v) or (e)(vi) above, use their best
efforts to prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the Holders or to the purchasers of the Registrable Securities or
Participating Broker-Dealers, as the case may be, such Prospectus will not
contain at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(m) in the case of a Shelf Registration, a reasonable time prior to
the filing of any Registration Statement, any Prospectus, any amendment to a
Registration Statement, or amendment or supplement to a Prospectus or any
document which is to be incorporated by reference into a Registration Statement
or a Prospectus after initial filing of a Registration Statement, provide copies
of such document to the Initial Purchaser on behalf of such Holders; and make
representatives of the Company and the Issuer as shall be reasonably requested
by the Holders of Registrable Securities, or the Initial Purchaser on behalf of
such Holders, available for discussion of such document;
13
(n) obtain a CUSIP number for all Exchange Securities not later than
the effective date of a Registration Statement, and provide the Trustee with
printed certificates for the Exchange Securities or the Registrable Securities,
as the case may be, in a form eligible for deposit with the Depositary;
(o) (i) cause the Indenture to be qualified under the TIA, in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the Holders
to effect such changes to the Indenture as may be required for the Indenture to
be so qualified in accordance with the terms of the TIA, and (iii) execute, and
use their best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(p) in the case of a Shelf Registration, enter into agreements
(including customary underwriting agreements) and take all other customary and
appropriate actions in order to expedite or facilitate the disposition of such
Registrable Securities and in such connection whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration:
(i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters in
similar underwritten offerings as may be reasonably requested by them;
(ii) obtain opinions of counsel to the Issuer and the Company
and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters,
if any, and the holders of a majority in principal amount of the
Registrable Securities being sold) addressed to each selling Holder and
the underwriters, if any, covering the matters customarily covered in
opinions requested in sales of securities or underwritten offerings and
such other matters as may be reasonably requested by such Holders and
underwriters;
(iii) obtain "cold comfort" letters and updates thereof from
the Issuer's and the Company's independent certified public accountants
addressed to the underwriters, if any, and use reasonable efforts to have
such letter addressed to the selling Holders of Registrable Securities (to
the extent consistent with Statement on Auditing Standards No. 72 of the
American Institute of Certified Public Accounts), such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters to underwriters in connection with similar
underwritten offerings;
14
(iv) if requested, enter into a securities sales agreement
with the Holders and an agent of the Holders providing for, among other
things, the appointment of such agent for the selling Holders for the
purpose of soliciting purchases of Registrable Securities, which agreement
shall be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in
Section 5 with respect to the underwriters and all other parties to be
indemnified pursuant to said Section or, at the request of any
underwriters, in the form customarily provided to such underwriters in
similar types of transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar offerings
to the Holders of a majority in principal amount of the Registrable
Securities being sold and the managing underwriters, if any.
The above shall be done at (x) the effectiveness of such Registration Statement
(and each post-effective amendment thereto), and (y) each closing under any
underwriting or similar agreement as and to the extent required thereunder;
(q) in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Securities and
any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant retained by such Holders or
underwriters, pertinent financial and other records, pertinent corporate
documents and properties of the Issuer and the Company reasonably requested by
any such persons, and cause the respective officers, directors, employees, and
any other agents of the Issuer and the Company to supply all information
reasonably requested by any such representative, underwriter, special counsel or
accountant in connection with a Registration Statement, and make such
representatives of the Issuer and the Company available for discussion of such
documents as shall be reasonably requested by the Initial Purchaser;
(r) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such
15
document to the Initial Purchaser, make such changes in any such document prior
to the filing thereof as the Initial Purchaser may reasonably request and not
file any such document in a form to which the Initial Purchaser on behalf of the
Holders of Registrable Securities shall reasonably object, and make the
representatives of the Issuer available for discussion of such documents as
shall be reasonably requested by the Initial Purchaser; and
(ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the Holders of
Registrable Securities, to the Initial Purchaser, to counsel on behalf of the
Holders and to the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any, make such changes in any such document prior to
the filing thereof as the Holders, the Initial Purchaser or the underwriter or
underwriters reasonably request and not file any such document in a form to
which the Majority Holders or the Initial Purchaser on behalf of the Holders of
Registrable Securities or any underwriter may reasonably object, and make the
representatives of the Issuer and the Company available for discussion of such
document as shall be reasonably requested by the Holders, the Initial Purchaser
or any underwriter.
(s) in the case of a Shelf Registration, use their best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Issuer are then listed if requested
by the Majority Holders, or if requested by the underwriter or underwriters of
an underwritten offering of Registrable Securities, if any;
(t) in the case of a Shelf Registration, use their best efforts to
cause the rating of the Registrable Securities to be confirmed or the
Registrable Securities to be re-rated by the appropriate rating agencies, if so
requested by the Majority Holders, or if requested by the underwriter or
underwriters of an underwritten offering of Registrable Securities;
(u) otherwise use their best efforts to comply with all applicable
rules and regulations of the SEC and make available to their security holders,
as soon as reasonably practicable, an earnings statement of the Company covering
at least 12 months which shall satisfy the provisions of Section 11(a) of the
1933 Act and Rule 158 thereunder;
(v) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter and their counsel (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD); and
16
(w) upon consummation of an Exchange Offer, obtain a customary
opinion of counsel to the Issuer and the Company addressed to the Initial
Purchaser and to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer, and which includes an opinion
that (i) each of the Issuer and the Company has duly authorized, executed and
delivered the Exchange Securities and the Indenture, and (ii) the Exchange
Securities and the Indenture constitute legal, valid and binding obligations of
the Issuer and the Company, enforceable against them in accordance with their
respective terms (with customary exceptions).
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Issuer of the happening of any event
or the discovery of any facts, each of the kind described in paragraph (e)(v) or
(e)(vi) above, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by paragraph
(l) above, and, if so directed by the Issuer, such Holder will deliver to the
Issuer (at its expense) all copies in such Holder's possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. Notwithstanding anything to the contrary in this Agreement, if the
Issuer shall give any such notice to suspend the disposition of Registrable
Securities pursuant to a Shelf Registration Statement as a result of the
happening of any event or the discovery of any facts, each of the kind described
in paragraph (e)(v) or (e)(vi) above, the Issuer and the Company shall be deemed
to have used their best efforts to keep the Shelf Registration Statement
effective during such period of suspension, provided that the Issuer and the
Company shall use their best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to the Shelf
Registration Statement and shall extend the period during which the Shelf
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions.
If, at any time, the Issuer and the Company shall fail to be in
compliance with their obligations under this Agreement to effect or consummate
the Exchange Offer or file any Shelf Registration Statement and maintain the
effectiveness of any Shelf Registration Statement as provided herein, the Issuer
and the Company shall not (without the written consent of the Initial Purchaser)
permit to become effective or request acceleration of effectiveness of any
Registration Statement with respect to any securities (within the meaning of
Section 2(1) of the 1933 Act) of the Issuer other than (i) Registrable
Securities, (ii) securities issued or issuable under an employee benefit plan of
the Issuer or the Company and registered pursuant to Form S-8 under the 1933
Act, or (iii) securities issued or issuable in connection with an acquisition or
business combination transaction.
17
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Registrable Securities
included in such offering and shall be reasonably acceptable to the Issuer. No
Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (1) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements, and (2)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
4. Representations and Warranties.
Each of the Issuer and the Company, jointly and severally, hereby
represents and warrants to, and agrees with, the Initial Purchaser and each of
the Holders from time to time of Registrable Securities that:
4.1 Each Registration Statement covering Registrable Securities and
each Prospectus contained therein or furnished pursuant to this Agreement and
any further amendments or supplements to any such Registration Statement or
Prospectus, when it becomes effective or is filed with the SEC, as the case may
be, and, in the case of an underwritten offering of Registrable Securities, at
the time of the closing under the underwriting agreement relating thereto, will
conform in all material respects to the applicable requirements of the 1933 Act
and the TIA and will not 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; and at all times subsequent to the Effective
Time when a Prospectus would be required to be delivered under the Securities
Act, each such Registration Statement, and each Prospectus contained therein or
furnished pursuant to this Agreement, as then amended or supplemented, will
conform in all material respects to the applicable requirements of the 1933 Act
and the TIA and will not 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 in the light of the circumstances then
existing; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Issuer and the Company by a Holder
of Registrable Securities expressly for use therein.
18
4.2 Any documents incorporated by reference in any Prospectus
referred to in Section 4.1, when they become or became effective or are or were
filed with the Commission, as the case may be, will conform or conformed in all
material respects to the requirements of the 1933 Act or the 1934 Act, as
applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Issuer and the Company by a Holder
of Registrable Securities expressly for use therein.
4.3 The compliance by the Issuer and the Company with all the
provisions of this Agreement and the consummation of the transactions herein
contemplated will not (i) conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Issuer or the Company or any subsidiary of the Issuer or the Company is a party
or by which the Issuer or the Company or any subsidiary of the Issuer or the
Company is bound or to which any of the property or assets of the Issuer or the
Company or any subsidiary of the Issuer or the Company is subject, (ii) result
in any violation of the provisions of the charter or the by-laws of the Issuer
or the Company or (iii) result in a violation of any statute or any order, rule
or regulation of any United States court or governmental agency or body having
jurisdiction over the Issuer or the Company or any subsidiary of the Issuer or
the Company or any of their properties, which conflict, breach, default or
violation, in the case of clauses (i) and (iii), would singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries
taken as a whole or adversely affect the ability of the Issuer or the Company to
perform its obligations hereunder; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Issuer or the Company of
the transactions contemplated by this Agreement, except the registration under
the 1933 Act of the Exchange Securities or the Securities, as the case may be,
qualification of the Indenture under the TIA and such consents, approvals,
authorizations, registrations or qualifications as may be required under State
securities or blue sky laws in connection with the Exchange Offer and the
Exchange Securities or the offering and distribution of the Securities, as the
case may be.
4.4 This Agreement has been duly authorized, executed and delivered
by the Issuer and the Company.
19
5. Indemnification; Contribution.
5.1 Indemnification by the Issuer; Guaranty by the Company. The
Issuer shall, and it hereby agrees to, indemnify and hold harmless each Holder,
the Initial Purchaser, each Participating Broker-Dealer, each person who
participates as a placement or sales agent or as an underwriter and each person
who controls any of the foregoing persons (within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act), against any losses, claims, damages
or liabilities, joint or several, to which such persons may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or any Prospectus contained therein or furnished pursuant
to this Agreement; 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, and the Issuer shall,
and it hereby agrees to, reimburse (without duplication) such persons for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Issuer and the Company shall not be liable
to any such person in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement or Prospectus in reliance upon and in conformity with
information furnished in writing to the Issuer and the Company by Holders of
Registrable Securities expressly for use therein. The Company irrevocably and
unconditionally guarantees the prompt performance and payment of the
indemnification obligations of the Issuer set forth in this Section 5.1, when
and as the same shall become due and payable in accordance with the terms of
this Section 5.1 (and if any payments made by the Company pursuant to such
guarantee are subject to any withholding tax imposed by the United Kingdom
(including any political subdivision or taxing authority thereof) or the
jurisdiction of incorporation or residence (other than the United States or any
political subdivision thereof) of any assignee or successor to the Company
(including any political subdivision or taxing authority thereof), the Company
shall pay such additional amounts as may be necessary so that the net amounts
paid to the Initial Purchaser, after deduction for such withholding tax, shall
equal the amounts to which the Initial Purchaser is entitled under this Section
5.1; subject to such exceptions for payment of additional amounts as are set
forth in the Indenture).
5.2 Indemnification by the Holders. The Issuer and the Company may
require, as a condition to including any Registrable Securities in any Shelf
Registration Statement filed pursuant to Section 2.2 and to entering into any
underwriting agreement with respect thereto, that the Issuer and the Company
shall have received an undertaking reasonably satisfactory to them from the
Holders of such Registrable
20
Securities, severally and not jointly, (a) to indemnify and hold harmless the
Issuer, the Company, the Initial Purchaser, all other Holders of Registrable
Securities and each person who controls any of the foregoing persons (within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act), against
any losses, claims, damages or liabilities to which such persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or any Prospectus contained
therein or furnished 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 each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with information furnished in writing to the Issuer and the Company
by such Holder expressly for use therein, and (b) to reimburse (without
duplication) such persons for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that no such Holder shall be
required to undertake liability to any person under this Section 5.2 for any
amounts in excess of the dollar amount of the net proceeds to be received by
such Holder from the sale of such Holder's Registrable Securities pursuant to
such Shelf Registration.
5.3 Notices of Claims, Etc. Promptly after receipt by an indemnified
party under Section 5.1 or 5.2 of written notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 5, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and shall not, in
any event, relieve it from any liability which it may have to any indemnified
party other than under the indemnification provisions of or contemplated by
Section 5.1 or 5.2. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the commencement
thereof, such indemnifying party shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, such indemnifying party shall not be liable to
such
21
indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (a) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim, and (b) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
5.4 Contribution. Each party hereto agrees that, if for any reason
the indemnification provisions contemplated by Section 5.1 or 5.2 are
unavailable to or insufficient to hold harmless the indemnified parties in
respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then the indemnifying parties shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
parties and the indemnified parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of such indemnifying parties and indemnified
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying parties or by such indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first sentence
of this Section 5.4 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this Section 5.4.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 5.4 were determined by pro rata
allocation (even if the Holders or any agents or underwriters or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 5.4. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5.4, no Holder shall be required to contribute any
amount in
22
excess of the amount by which the dollar amount of the net proceeds
received by such Holder from the sale of any Registrable Securities exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations in this Section 5.4 to contribute shall be several in proportion to
the principal amount of Registrable Securities registered by them and not joint.
5.5 Other Matters. The obligations of the Issuer and the Company
under this Section 5 shall be in addition to any liability which the Issuer and
the Company may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each Holder, agent and
underwriter and each person, if any, who controls any Holder, agent or
underwriter within the meaning of the Securities Act; and the obligations of the
Holders and any agents or underwriters contemplated by this Section 5 shall be
in addition to any liability which the respective Holder, agent or underwriter
may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Issuer or the Company (including any person who,
with his consent, is named in any Registration Statement as about to become a
director of the Issuer or the Company) and to each person, if any, who controls
the Issuer or the Company within the meaning of the Securities Act.
6. Miscellaneous.
6.1 Rule 144 and Rule 144A. During any period that the Securities or
Registrable Securities are "restricted securities" within the meaning of Rule
144(a)(3) under the 1933 Act, for so long as each of the Company and the Issuer
is subject to the reporting requirements of Section 13 or 15 of the 1934 Act,
each of the Company and the Issuer covenants that it will file the reports
required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the
1934 Act and the rules and regulations adopted by the SEC thereunder, and that
if it is not subject to such reporting requirements or ceases to be so required
to file such reports, it will upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the 1933 Act and it will take such further action as any
Holder of Registrable Securities may reasonably request, and (c) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Securities without registration under the 1933 Act within the limitation of the
exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, (ii) Rule 144A under the 1933 Act, as such
23
Rule may be amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the request of any Holder of Registrable
Securities, the Issuer and the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
6.2 No Inconsistent Agreements. The Issuer and the Company have not
entered into and the Issuer and the Company will not after the date of this
Agreement enter into any agreement which is inconsistent with the rights granted
to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with the rights granted to the holders of
the Issuer's or the Company's other issued and outstanding securities under any
such agreements.
6.3 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Issuer and the Company have obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure.
6.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder to
the Issuer by means of a notice given in accordance with the provisions of this
Section 6.4, which address initially is the address set forth in the Purchase
Agreement with respect to the Initial Purchaser; and (b) if to the Issuer or the
Company, initially at the Issuer's address set forth in the Purchase Agreement,
and thereafter at such other address of which notice is given in accordance with
the provisions of this Section 6.4.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to a courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
24
6.5 Successor and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all the terms of this Agreement, and by taking and holding such
Registrable Securities such person shall be conclusively deemed to have agreed
to be bound by and to perform all the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such person shall be entitled to receive
the benefits hereof.
6.6 Third Party Beneficiaries. The Initial Purchaser (even if the
Initial Purchaser is not a Holder of Registrable Securities) shall be a third
party beneficiary to the agreements made hereunder between the Issuer and the
Company, on the one hand, and the Holders, on the other hand, and shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Issuer and the Company,
on the one hand, and the Initial Purchaser, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder.
6.7 Counterparts. This Agreement may be executed with counterpart
signature pages or in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
6.8 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
6.10 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
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6.11 Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may be irreparably harmed by any such
failure, and accordingly agree that each party, in addition to any other remedy
to which it may be entitled at law or in equity, shall be entitled to compel
specific performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement, in any court of
the United States or any State thereof having jurisdiction.
6.12 Inspection. For so long as this Agreement shall be in effect,
this Agreement and a complete list of the names and addresses of all the Holders
of Registrable Securities shall be made available for inspection and copying on
any business day by any Holder of Registrable Securities for proper purposes
only (which shall include any purpose related to the rights of the Holders of
Registrable Securities under the Securities, the Indenture and this Agreement)
at the offices of the Issuer and the Company at the address thereof set forth in
Section 6.4 or at the office of the Trustee under the Indenture.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
USI AMERICAN HOLDINGS, INC.
By: /s/ Frank Reilly
Name: Frank Reilly
Title: Senior Vice President, Chief
Financial Officer
U.S. INDUSTRIES, INC.
By: /s/ Frank Reilly
Name: Frank Reilly
Title: Senior Vice President, Chief
Financial Officer
Confirmed and accepted as of the date first above written:
BA SECURITIES, INC.
BY:
By: /s/ Elizabeth A. Birdwell
Name: Elizabeth A. Birdwell
Title: Managing Director
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Exhibit A
Form of Opinion of Counsel
BA SECURITIES, INC.
40 East 52nd Street, 5th Floor
New York, N.Y. 10022
Re: USI American Holdings, Inc.
7 1/4% Senior Notes Due December 1, 2006, Series A
Ladies and Gentlemen:
We have acted as counsel for each of USI American Holdings, Inc., a
Delaware corporation (the "Issuer"), and U.S. Industries Inc., a Delaware
corporation (the "Company"), in connection with (i) the purchase from the Issuer
by BA Securities, Inc., the Initial Purchaser named in the Purchase Agreement,
dated as of December 6, 1996 (the "Purchase Agreement"), among the Issuer, the
Company and you of $125,000,000 aggregate principal amount of 7 1/4% Senior
Notes Due December 1, 2006, Series A of the Issuer issued under an Indenture
dated as of December 12, 1996 (the "Indenture"), among the Issuer, the Company
and PNC Bank, National Association, as trustee, and (ii) the Exchange Offer (as
defined in the Registration Rights Agreement dated as of December 12, 1996 (the
"Registration Rights Agreement"), among the Issuer, the Company and you) to be
effected pursuant to the Registration Rights Agreement. This opinion is
furnished to you pursuant to Section 3(g) of the Registration Rights Agreement.
Unless otherwise defined herein, capitalized terms used in this opinion that are
defined in the Registration Rights Agreement are used herein as so defined.
We have examined such documents, records and matters of law as we
have deemed necessary for purposes of this opinion. In rendering this opinion,
as to all matters of fact relevant to this opinion, we have assumed the
completeness and accuracy of, and are relying solely upon, the representations,
warranties and agreements of the Issuer, the Company and the Initial Purchaser
set forth in the Purchase Agreement, the Indenture and the Registration Rights
Agreement, and the statements set forth in certificates of public officials and
officers of the Issuer and the Company, without making any independent
investigation or inquiry with respect to the completeness or accuracy of such
representations, warranties, agreements or statements.
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We are of the opinion as follows:
1. The Exchange Offer Registration Statement and the Prospectus
included therein comply as to form in all material respects with the
requirements of the 1933 Act (except that we express no opinion as to the
financial statements, related notes, financial statement schedules and other
financial, statistical and accounting data included or incorporated by reference
therein, or as to the Form T-1).
2. Any documents incorporated by reference in any Prospectus, when
they became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the 1933
Act or the 1934 Act, as applicable (except that we express no opinion as to the
financial statements, related notes, financial statement schedules and other
financial, statistical and accounting data included or incorporated by reference
therein, or as to the Form T-1).
3. In addition, we have participated in conferences with directors,
officers and other representatives of the Company and the Issuer,
representatives of the independent public accountants for the Company and the
Issuer, representatives of the Initial Purchaser and representatives of counsel
for the Initial Purchaser and the Holders, at which conferences the contents of
the Exchange Offer Registration Statement and related matters were discussed,
and, although we have not independently verified and are not passing upon and
assume no responsibility for the accuracy, completeness or fairness of the
statements contained in the Exchange Offer Registration Statement and the
Prospectus contained therein, no facts have come to our attention which lead us
to believe that the Exchange Offer Registration Statement including the
documents incorporated by reference therein (except for the financial
statements, related notes, financial statement schedules and other financial,
statistical and accounting data included or incorporated by reference therein,
as to which we express no opinion), at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus included in the Exchange Offer
Registration Statement (except for financial statements, related notes,
financial statement schedules and other financial, statistical and accounting
data included or incorporated by reference therein, as to which we express no
opinion), as of the date of such Prospectus or at the closing of the Exchange
Offer, included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
This opinion is being furnished to you solely for your benefit in
connection with the transactions contemplated by the Registration Rights
Agreement and may not be used for any other purpose or relied upon by any person
other than
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you. Except with our prior written consent, the opinions herein expressed are
not to be used, circulated, quoted or otherwise referred to in connection with
any transactions other than those contemplated by the Registration Rights
Agreement by or to any other person.
Very truly yours,