Exhibit 99.02
Option, Transfer and Registration Agreement
between
United States Filter Corporation
and
NI Industries, Inc.
dated as of
October 24, 1996
Option, Transfer and Registration Agreement
between
United States Filter Corporation,
and
NI Industries, Inc.
dated as of
October 24, 1996
TABLE OF CONTENTS
_________________
PAGE
____
1. Certain Definitions . . . . . . . . . . . . . . . . 1
2. Restrictions on Transferability . . . . . . . . . . 2
3. Restrictive Legends . . . . . . . . . . . . . . . . 2
4. Notice of Proposed Transfers . . . . . . . . . . . . 3
5. Company Registration . . . . . . . . . . . . . . . . 4
6. Expenses of Registration . . . . . . . . . . . . . . 4
7. Indemnification . . . . . . . . . . . . . . . . . . 5
8. Obligations of the Company . . . . . . . . . . . . . 6
9. Securities Law Compliance . . . . . . . . . . . . . 7
10. Standoff Agreement . . . . . . . . . . . . . . . . 7
11. Rule 144 Requirements . . . . . . . . . . . . . . . 7
12. Put Right and Call Offer . . . . . . . . . . . . . 7
13. Amendment . . . . . . . . . . . . . . . . . . . . . 8
14. Investment Representation. . . . . . . . . . . . . . 8
15. Notices, etc.. . . . . . . . . . . . . . . . . . . . 9
16. Entire Agreement; Severability . . . . . . . . . . . 9
17. Governing Law . . . . . . . . . . . . . . . . . . . 9
18. Counterparts . . . . . . . . . . . . . . . . . . . . 9
OPTION, TRANSFER AND REGISTRATION AGREEMENT
___________________________________________
This Option, Transfer and Registration Agreement
("Agreement") is entered into as of October 24, 1996 among United
States Filter Corporation, a Delaware corporation (the
"Company"), and NI Industries, Inc., a Delaware corporation
("NI"), with reference to certain shares of Common Stock, $.01
par value (the "Common Stock"), of the Company.
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Commission" shall mean the United States Securities
and Exchange Commission or any other federal agency at the
time administering the Securities Act.
"Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the time and any successor thereto.
"Registrable Shares" shall mean the Shares held by NI;
provided, however, that Shares shall be treated as
Registrable Shares only if and so long as they have not been
(i) sold in a public distribution or a public securities
transaction pursuant to an effective registration statement
under the Securities Act, or (ii) sold in a transaction
exempt from the registration and prospectus delivery
requirements of the Securities Act as a result of which all
transfer restrictions and restrictive legends with respect
thereto are removed upon the consummation of such sale.
The terms "register", "registered" and "registration"
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of
such registration statement.
"Registration Expenses" shall mean all registration,
qualification and filing fees, fees and disbursements of
counsel for the Company, accounting fees incident to any
such registration, state securities or blue sky fees and
expenses, transfer agent and registrar fees, reasonable fees
and expenses of any special experts retained by the Company
in connection with any such registration, and any listing
fees.
"Restricted Shares" shall mean the shares of the
Company required to bear the legend set forth in paragraph
(a) of Section 3 hereof.
"Rule 144" shall mean Rule 144 promulgated under the
Securities Act, as such Rule shall be in effect at the time,
and any successor thereto.
"Securities Act" shall mean the United States
Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"Selling and Distribution Expenses" shall mean all
underwriting discounts, selling commissions and stock
transfer taxes attributable to the sale of Shares by NI and
any out-of-pocket expenses of NI incurred in connection with
the registration of Shares, including, without limitation,
fees and disbursements of counsel for NI if such counsel is
not also counsel for the Company, printing expenses and
marketing expenses.
"Shares" shall mean the 75,786 shares of Common Stock
issued to or for the benefit of NI on the date hereof, as
that number shall be adjusted for indemnification pursuant
to the Asset Purchase Agreement, and any shares of Common
Stock issued in respect thereof in connection with stock
splits, stock dividends or distributions, or combinations or
similar recapitalizations, on or after the date hereof.
"Asset Purchase Agreement" shall mean the Asset
Purchase Agreement dated as of October 23, 1996 by and among
the Company, Xxxxxx Environmental Services, Inc. ("Xxxxxx")
and U.S. Filter Recovery Services (California), Inc.
2. Restrictions on Transferability. The Shares may be
sold, assigned, transferred or pledged only in accordance with
the conditions specified in this Agreement, which conditions are
intended to ensure compliance with the provisions of the
Securities Act.
3. Restrictive Legends.
(a) Each certificate representing Shares shall (unless
otherwise permitted by subsection (c) of this Section 3 or
Section 4) be stamped with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY
BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO IT
STATING THAT SUCH REGISTRATION IS NOT REQUIRED.
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(b) Each certificate representing Shares shall also be
stamped with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF THE OPTION,
TRANSFER AND REGISTRATION AGREEMENT BETWEEN NI AND THE
COMPANY WHICH INCLUDES RESTRICTIONS ON CERTAIN SALES OF
THE SECURITIES. COPIES OF THE AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY.
(c) NI consents to the Company's making a notation on
its records and giving instructions to any transfer agent of the
Company in order to implement the restrictions on transfer
established in this Agreement. The legend placed on any
certificate pursuant to Section 3(a) and any notations or
instructions with respect to the Restricted Shares represented by
such certificate will be promptly removed, and the Company will
promptly issue a certificate without such legend to NI (i) if
such Restricted Shares are disposed of pursuant to an effective
registration statement under the Securities Act, or (ii) if NI
satisfies the requirements of Rule 144(k) and, where reasonably
determined necessary by the Company, provides the Company with an
opinion of counsel (which may be an opinion of NI's in-house
counsel), both such counsel and such opinion being reasonably
satisfactory to the Company, to the effect that (A) NI meets the
requirements of Rule 144(k) or (B) a public sale, transfer or
assignment of the Shares may be made without registration under
the Securities Act.
4. Notice of Proposed Transfers. The holder of each
certificate representing Restricted Shares by acceptance thereof
agrees to comply in all respects with the provisions of this
Section 4. Prior to any proposed sale, assignment, transfer or
pledge of any Restricted Shares, unless there is in effect a
registration statement under the Securities Act covering the
proposed transfer, NI shall notify the Company in writing of its
intention to effect such sale, assignment, transfer or pledge and
the intended manner and circumstances thereof in reasonable
detail. If requested by the Company, any such notice shall be
accompanied at NI's expense by a written opinion of legal counsel
who is, and whose legal opinion shall be, reasonably satisfactory
to the Company, addressed to the Company, to the effect that the
proposed transfer of Restricted Shares may be effected without
registration under the Securities Act, and by such certificates
and other information as the Company may reasonably require to
confirm such opinion, whereupon NI shall be entitled to transfer
such Restricted Shares in the manner contemplated by such
opinion. Each certificate evidencing the Restricted Shares
transferred as above provided shall bear, except if such transfer
is made pursuant to Rule 144, the appropriate restrictive legend
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set forth in Section 3(a) above, except that such certificate
shall not bear such restrictive legend if in the opinion of
counsel for NI and the Company such legend is not required in
order to establish compliance with any provisions of the
Securities Act. So long as such restrictive legend shall be
required to remain on any such certificates, the transfer of the
Restricted Shares represented thereby shall be conditioned upon
the transferee thereof becoming a party hereto (except that such
transferee shall have no rights under Sections 5 or 12 hereof).
5. Company Registration.
(a) Notice of Registration. If, at any time or from
time to time, the Company shall determine to register any of its
Common Stock, either for its own account or the account of a
security holder or holders exercising their respective demand
registration rights, for distribution pursuant to an underwritten
offering, the Company will (i) promptly give to NI written notice
thereof, and (ii) include in such registration (and any related
qualification under blue sky laws or other compliance), subject
to Section 5(b), all the Registrable Shares if so requested in
writing by NI within 30 days after their receipt of such written
notice from the Company.
(b) Underwriting. The right of NI to registration
pursuant to this Section 5 shall be conditioned upon NI'S
participation in such underwriting and the inclusion of the
Registrable Shares in the underwriting to the extent provided
herein. NI shall (together with the Company and the other
holders distributing shares of Common Stock through such
underwriting), if required by the managing underwriter of such
offering, enter into an underwriting agreement in customary form
with the managing underwriter selected for such underwriting by
the Company (or by the holders who have demanded such
registration), and shall provide to the Company upon written
request such information referenced in Section 5(d) hereof as may
be specified in such request. Notwithstanding any other
provision of this Section 5, if the managing underwriter in its
sole discretion determines that marketing factors require a
limitation of the number of shares to be underwritten, the
managing underwriter may limit the Registrable Shares to be
included in such registration. The Company shall so advise NI
and the holders distributing their securities through such
underwriting pursuant to piggyback registration rights similar to
this Section 5, and the number of Registable Shares and other
securities that may be included in such registration and
underwriting by NI and such other holders shall be reduced by the
number of shares determined by the managing underwriter not to be
included in such registration, such cutback to be allocated among
NI such other holders in proportion, as nearly as practicable, to
the respective amounts of the Registrable Shares and such other
4
securities. If NI disapproves of the terms of any such
underwriting, NI may elect to withdraw therefrom by written
notice to the Company and the managing underwriter.
(c) Right to Terminate Registration. The Company
shall have the right to terminate or withdraw any registration
under this Section 5 prior to the effectiveness of such
registration whether or not NI has elected to include securities
in such registration.
6. Expenses of Registration. All Registration Expenses
incurred in connection with any registration pursuant to Section
5 shall be borne by the Company. All Selling and Distribution
Expenses included in such registration attributable to the
Registrable Shares registered on behalf of NI shall be borne by
NI pro rata on the basis of the number of Registrable Shares so
registered.
7. Indemnification.
(a) The Company will indemnify NI, each of its
officers, directors, partners, employees and agents and each
person controlling NI within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification
or compliance has been effected pursuant to this Agreement,
against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any
such registration, qualification or compliance, or any omission
(or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not
misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any other
federal, state or common law rule or regulation applicable to the
Company in connection with any such registration, qualification
or compliance, and the Company will reimburse NI, each of its
officers, directors, employees and agents and each person
controlling NI for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending
any such claim, loss, damage, liability or action, provided that
the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises
out of or is based on any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in
conformity with any written information furnished to the Company
pursuant to an instrument duly executed by NI or controlling
5
person and stated to be specifically for use therein.
(b) NI will, if Registrable Shares held by NI are
included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if
any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and will reimburse the Company, each of its
directors, officers, persons, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only if and
to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with any written
information furnished to the Company pursuant to an instrument
duly executed by NI and stated to be specifically for use
therein.
(c) Each party entitled to indemnification under this
Section 7 (the "Indemnified Party") shall give written notice to
the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Agreement unless, but only to the extent that, the failure to
give such notice is actually prejudicial to an Indemnifying
Party's ability to defend such action. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
6
(d) In order to provide for just and equitable
contribution to joint liability under the Securities Act in any
case in which NI, or any controlling person of NI, makes a claim
for indemnification pursuant to this Section 7 but it is
judicially determined (by the entry of a final judgment or decree
by a court of competent jurisdiction and the expiration of time
to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding
the fact that this Section 7 provides for indemnification in such
case, then, the Company and NI will contribute to the aggregate
losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so
that NI is responsible for the portion represented by the
percentage that the public offering price of its Registrable
Shares offered by the registration statement bears to the public
offering price of all Shares offered by such registration
statement; and the Company is responsible for the remaining
portion not payable by any other holder; provided, however, that,
in any such case, (A) NI will not be required to contribute any
amount in excess of the public offering price of all such
Registrable Shares offered by it pursuant to such registration
statement; and (B) no person guilty of fraudulent misrepresenta-
tion (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Obligations of the Company. Whenever required under
this Agreement to use its best efforts to effect the registration
of any Registrable Shares, the Company shall, as expeditiously as
reasonably possible:
(a) If Registrable Shares owned by NI have been
included in a registration statement furnished to NI such numbers
of copies of the registration statement and all amendments
thereto, any prospectus included in such registration statement,
including any preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as
NI may reasonably request in order to facilitate the disposition
of Registrable Shares owned by NI.
(b) Enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the
managing underwriter of such offering. NI shall also enter into
and perform its obligations under such an agreement.
9. Securities Law Compliance. If Registrable Shares owned
by NI have been included in any registration pursuant to this
Agreement NI will comply with the Securities Act and with the
Exchange Act with respect to any such registration.
10. Standoff Agreement. NI agrees in connection with any
registration of the Company's Common Stock, upon request of the
7
underwriters managing any underwritten offering of the Company's
securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any
Registrable Shares (other than those included in such
registration), without the prior written consent of the Company
or such underwriters, as the case may be, for such period of time
(not to exceed 120 days) from the effective date of such
registration as may be requested by the Company or such managing
underwriters.
11. Rule 144 Requirements. The Company agrees to:
(a) use its best efforts to file with the Commission
in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act;
(b) furnish to NI upon request (i) a written statement
by the Company as to its compliance with the requirements of Rule
144(c), and the reporting requirements of the Securities Act and
the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company, and (iii) such other reports and
documents of the Company as NI may reasonably request to avail
itself of any similar rule or regulation of the Commission
allowing itself to sell any such securities without registration;
and
(c) cooperate with NI in such manner as NI may
reasonably request so as to enable sales made in compliance with
the requirements of Rule 144 to be made in compliance with the
requirements of any transfer agent, registrar or the broker
through whom any sales are to be executed.
12. Put Right and Call Offer.
(a) Subject to Section 12(b) below, NI shall have the
right to sell (the "Put Right") during the Put Right Exercise
Period (as defined below), and upon exercise of that right the
Company shall purchase, all the Shares then owned by NI at a
purchase price per Share equal to 105% of the Average Specified
Price (as defined below) during the Put Right Exercise Period.
If the Put Right is not duly exercised during the Put Right
Exercise Period, it shall expire at the end of the Put Right
Exercise Period. The Put Right may be exercised only once.
(b) The Company may offer to purchase from (the "Call
Offer") during the Call Offer Period (as defined below) all or
any portion of the Shares then owned by NI at a purchase price
equal to 105% of the Average Specified Price (as defined below).
NI may, at its option, accept such Call Offer upon written notice
delivered to the Company within twenty business days after notice
of the Call Offer is given to NI. If NI does not duly accept the
Call Offer in accordance with the terms of the Call Offer and
8
this Agreement, or if any NI accepts the Call Offer but
subsequently does not sell to the Company the Shares agreed to be
sold by NI to the Company within the period provided for in this
Section 12, then both the Call Offer and all rights of NI under
Section 12(a) with respect to the Shares subject to such Call
Offer shall then immediately expire and be of no further force
and effect.
(c) The "Average Specified Price" for each Share
subject to a Put Right or a Call Offer shall be $32.9875, which
is equal to the average of the closing prices of the Common Stock
as reported by the New York Stock Exchange for each of the ten
consecutive trading days ending on October 3, 1996. The "Put
Right Exercise Period" shall be the 90-day period commencing on
the 90th day after the date of this Agreement. The "Call Offer
Period" shall be the 60-day period commencing on the 120th day
after the date of this Agreement. A Put Right may be exercised
and a Call Offer may be made only by written notice to the
Company or NI, as the case may be, and such notice shall contain
the number of Shares to be purchased. The purchase price payable
upon purchase and sale of the Shares subject to a Put Right or
Call Offer hereunder shall be paid in cash on the Closing Date
(as defined below).
(d) In the event of an exercise of a Put Right or the
making of a Call Offer, the parties to such transaction shall
mutually determine a closing date (a "Closing Date") which shall
not be more than 30 days, subject to any applicable regulatory
waiting periods, after the date the Put Right is exercised or
Call Offer is made and accepted by NI, or if any such day is not
a business day, then the first business day thereafter. Such
closing ("Closing") shall be held at 11:00 a.m., local time, at
the principal executive office of the Company, or at such other
time or place as the parties may agree. On the Closing Date of a
purchase of Shares pursuant to this Section, NI shall deliver to
the Company certificates, with stock powers duly endorsed in
blank, representing the Shares to be purchased.
13. Amendment. Any provision of this Agreement may be
amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by the written consent of the Company and
NI. Any amendment or waiver effected in accordance with this
Section 16 shall be binding upon NI, each future holder of any
Shares who is a party to this Agreement, and the Company.
14. Investment Representation. NI hereby confirms and
represents and warrants to the Company that NI is acquiring the
Shares for investment only and not with a view to or in
connection with any resale or distribution of the Shares. NI has
reviewed all information provided by the Company to Xxxxxx
pursuant to Section 4.06 of the Asset Purchase Agreement.
9
15. Notices, etc. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered by hand, courier service,
United States mail (return receipt requested) or by facsimile,
addressed as follows:
(a) If to the Company:
United States Filter Corporation
00-000 Xxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Tel: (000) 000-0000
FAX: (000) 000-0000
(b) If to NI:
President
NI Industries, Inc.
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Tel: (313)
FAX: (000) 000-0000
or to such other address or facsimile number of a party of which
such party has given notice to the other parties pursuant to this
Section.
16. Entire Agreement; Severability. This Agreement and the
Stock Purchase Agreement together with the Schedules and Exhibits
thereto set forth all of the provisions, covenants, agreements,
conditions and undertakings among the parties hereto with respect
to the subject matter hereof. The provisions of this Agreement
are severable, and in the event that any one or more provisions
are deemed illegal or unenforceable, the remaining provisions
shall remain in full force and effect.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws (other than those with
respect to choice of law) of the State of Delaware. Each of the
parties hereto agrees that all claims in any action or proceeding
arising out of or related to this Agreement may be heard and
determined in any Delaware state court or federal court sitting
in the State of Delaware.
18. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
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Agreement as of the date first above written.
UNITED STATES FILTER CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Title: Chief Financial Officer
NI INDUSTRIES , INC.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Title: Vice President
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