REGISTRATION RIGHTS AGREEMENT
(PennCorp)
This Registration Rights Agreement (the "Agreement") is made
and entered into as of December 14, 1995, by and among PennCorp Financial
Group, Inc., a Delaware corporation (the "Company"), I.C.H. Corporation
("ICH"), a Delaware corporation, SWL Holding Corporation ("SWL Holding"), a
Delaware corporation, and Care Financial Corporation ("CFC"), a Delaware
corporation (CFC, SWL Holding and ICH, together with Facilities Management
Installation, Inc., a Delaware corporation ("FMI"), collectively being
referred to herein as the "Debtors").
This Agreement is made pursuant to the Purchase Agreement (the
"Purchase Agreement"), dated as of December 1, 1995, by and among the
Debtors, Southwestern Financial Corporation, a Delaware corporation,
Southwestern Financial Services Corporation, a Delaware corporation, and
the Company. In order to induce the Debtors to perform their obligations
under the Purchase Agreement and to consummate the transactions
contemplated thereby, the Company has agreed to provide the registration
and other rights set forth in this Agreement. The execution and delivery
of this Agreement is a condition to the consummation of the Purchase
Agreement.
The parties agree as follows:
1. Securities Subject to this Agreement
(a) Certain Definitions. The terms set forth below are used
herein as so defined:
"Bankruptcy Court" means the United States Bankruptcy Court for
the Northern District of Texas, Dallas Division.
"Closing" means the closing of the transactions contemplated by
the Purchase Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $.01 per
share, of the Company, and any class or series of capital stock into which
such common stock thereafter may be changed.
"Date of Distribution" means the first date on which shares of
Common Stock are delivered to Distributees pursuant to the Plan of
Reorganization.
"Distributees" means the holders of claims against and/or
interests in one or more of the Debtors' estates who receive Common Stock
pursuant to the Plan of Reorganization in exchange for such claims or
interests.
"Eligible Distributee" means, if the Commission shall have
objected to the delivery of the final prospectus contained in the Shelf
Registration to prospective Distributees in connection with the
solicitation of acceptances of the proposed Plan of Reorganization, those
Distributees who, within 180 days after the Date of Distribution, deliver
to the Company a written opinion of counsel (in form and substance
reasonably satisfactory to the Company, which may set forth the analysis
relied upon in reaching the relevant legal conclusion) to the effect that
the offer and sale by such Distributee of the Common Stock, in the manner
proposed to be offered and sold by such Distributee, is required to be made
pursuant to a registration statement under the Securities Act.
Notwithstanding the foregoing, no Person shall be an Eligible Distributee
unless such Person agrees in writing to be bound by the terms and
provisions of this Agreement to the same extent as the Debtors.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to
time.
"Holder" has the meaning set forth in the definition of
Registrable Securities.
"Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, or other entity.
"Plan of Reorganization" means a plan of reorganization with
respect to the Debtors' jointly administered cases under Chapter 11 of the
United States Bankruptcy Code that has been confirmed by the Bankruptcy
Court, has not been stayed pending appeal and becomes effective in
accordance with its terms or an order of the Bankruptcy Court.
"Plan of Reorganization Effective Date" means the date on which
the Plan of Reorganization becomes effective, it being understood that the
Debtors shall be obligated to provide written notice of such date to the
Company.
"Pro Rata Basis" means a pro rata allocation, among a specified
group of Persons, based on the number of shares of Common Stock requested
to be included in a registered offering by such group of Persons.
"Registrable Securities" means the shares of Common Stock
acquired by CFC pursuant to the Purchase Agreement, or by any other Debtor
from CFC, or by Eligible Distributees pursuant to the Plan of
Reorganization (each, a "Holder"), until such time as such securities shall
cease to be Registerable Securities as provided in Section 1(b) hereof.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to
time.
"Selling Holder" means a Holder who is selling Registrable
Securities pursuant to a registration statement under this Agreement.
(b) Registrable Securities. Any Registrable Security will
cease to be a Registrable Security when (i) a registration statement
covering such Registrable Security has been declared effective by the
Commission and such security has been disposed of pursuant to such
effective registration statement or (ii) such security is sold pursuant to
a registered public offering or pursuant to Section 4(1) of the Securities
Act or pursuant to Rule 144, Rule 144A or Regulation S under the Securities
Act (or any similar provision then in force) or (iii) such security is
eligible for sale pursuant to Rule 144(k) under the Securities Act.
2. Shelf Registration
(a) The Company agrees to file with the Commission as soon as
practicable after the Closing a "shelf" registration statement on any
appropriate form pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission with respect to all of,
and only, the then Registrable Securities (the "Shelf Registration"). The
Company agrees (i) to use its commercially reasonable efforts to have such
Shelf Registration declared effective as soon as possible after such filing
and (ii) to keep such Shelf Registration continuously effective (and to
take any and all other actions necessary in order to permit public sale
of the Registrable Securities covered by such Shelf Registration) until the
earlier of: (a) three years following the date on which such Shelf
Registration is declared effective, (b) one year after the Plan of
Reorganization Effective Date, and (c) the date on which all the
Registrable Securities cease to be such as provided in Section 1(b) hereof
(the earlier of such dates being the "Expiration Date"). In the event the
Shelf Registration Statement is not declared effective on or before
January 31, 1996, interest on a notional amount of $10,000,000 shall accrue
at the rate of 5% per annum (based on a 365-day year) from February 1,
1996, through and including the day prior to the date on which the Shelf
Registration Statement is declared effective by the Commission (the "Shelf
Registration Effective Date"); provided that in the event the value of
PennCorp Shares required to be delivered to the Holders pursuant to the
Purchase Agreement shall be reduced as contemplated by Section 3(c) hereof,
the $10,000,000 notional amount on which interest shall accrue shall be
reduced by an amount equal to the reduction in such value, effective as of
the date the proceeds to which the Holders are entitled pursuant to clause
(c) are paid to the Holders via wire transfer of immediately available
funds. Such interest shall be paid, in cash, on the Shelf Registration
Effective Date to ICH (for the benefit of the Debtors as they may agree
among themselves) via wire transfer of immediately available funds.
(b) The Company agrees, if necessary, to supplement or make
amendments to the Shelf Registration, if required by the registration form
utilized by the Company for such Shelf Registration or by the instructions
applicable to such registration form or by the Securities Act or the rules
and regulations thereunder. The Company will pay all Registration Expenses
(as hereinafter defined) in connection with such Shelf Registration,
whether or not it becomes effective. In connection with any underwritten
offering of Registrable Securities under the Shelf Registration, the
Company shall have the right to designate one or more nationally recognized
investment banking firms as the managing underwriter or underwriters with
respect to such offering.
(c) In connection with the filing of the Shelf Registration,
there shall be included a "Plan of Distribution" section in the prospectus
contained therein, which shall provide that such prospectus may be
delivered (subject to any applicable order of the Bankruptcy Court) by one
or more of the Debtors to prospective Distributees in connection with the
solicitation of acceptances of a proposed plan of reorganization related to
the Debtors. In the event the Commission objects to the delivery of the
final prospectus contained in the Shelf Registration to prospective
Distributees, the Company agrees to file such amendments or prospectus
supplements as may be necessary to identify as Selling Holders all Eligible
Distributees; provided,
however, that the Company shall not be obligated to file more than one such
prospectus supplement during any calendar quarter to reflect any changed in
the relevant facts related to the Eligible Distributees.
3. Piggy-Back Registration.
(a) Request for Registration. At any time after the date
hereof and prior to the Expiration Date, if the Company proposes to file a
registration statement under the Securities Act (other than a registration
statement on Form S-4 or S-8 (or any successor form that may be adopted by
the Commission) or a registration statement filed in connection with an
exchange offer or offering of securities solely to the Company's existing
securityholders) with respect to an underwritten offering for cash of
Common Stock for the Company's own account or for the account of any of its
securityholders, then the Company shall give written notice to each Holder
or, if after the Date of Distribution, to ICH and to each Eligible
Distributee not less than 20 days before the anticipated effective date of
such registration statement. Such notice shall offer each Holder the
opportunity to have all or any of the Registrable Securities held by such
Person included in the registration statement proposed to be filed (the
"Piggy-back Registration"). Within ten days after receiving such notice,
each Holder may make a written request to the Company that any or all of
such Person's Registrable Securities be included in the Piggy-back
Registration, which notice shall specify the number of shares to be so
included. Subject to Section 3(b) hereof, the Company shall include in the
Piggy-back Registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within ten
days after the receipt by each Holder of the Company's notice. The Company
may in its discretion withdraw any registration statement filed pursuant to
this Section 3(a). Any Holder shall be permitted to withdraw all or part
of the Registrable Securities from a Piggy-back Registration at any time
prior to the effective date of such Piggy-back Registration.
(b) Priority on Piggy-back Registration. The Company shall
use its reasonable best efforts to cause the managing underwriter or
underwriters to permit the shares of Registrable Securities requested by
the Holders of Registrable Securities ("Selling Piggy-back Holders") to be
included in the Piggy-back Registration (on the same terms and conditions
as the Common Stock included therein for the account of the Company or any
other holders of Common Stock). Notwithstanding the foregoing, if the
managing underwriter or underwriters of such offering advise the Company in
writing that inclusion of the Registrable Securities requested to be
included in the offering would materially and adversely affect the price or
success of the offering (a "Material Adverse Effect"), then (i) if such
Piggy-back Registration is
incident to a primary registration on behalf of the Company, the Company
shall include in the registration statement (A) first, all the shares to be
sold by it and (B) second, the maximum amount of securities requested to be
included in the Piggy-back Registration by the Selling Piggy-back Holders
that would not cause a Material Adverse Effect (provided that the amount to
be included by the Selling Piggy-back Holders shall be allocated, subject
to any written agreement among the Selling Piggy-back Holders, on a Pro
Rata Basis among such Selling Piggy-back Holders if the inclusion of all
the requested Registrable Securities in such registration statement would
cause a Material Adverse Effect) and (C) third, the shares requested to be
included by any other securityholder (in such amounts as they may agree
among themselves) and (ii) if such Piggy-back Registration is incident to a
secondary registration on behalf of holders of Common Stock (other than
Holders) pursuant to demand registration rights, the Company shall include
in such registration statement (A) first, the number of shares of such
Person(s) on whose behalf the registration is being made (allocated among
such Persons as they may determine, if applicable) and (B) second, the
maximum number of Registrable Securities requested to be included in such
registration pursuant to this Section 3 in excess of the securities of such
Person(s) on whose behalf the registration is being made that, in the
opinion of such managing underwriters, would not have a Material Adverse
Effect, allocated, subject to any written agreement among the Selling
Piggy-back Holders, on a Pro Rata Basis among such Selling Piggy-back
Holders and the Company, to the extent it desires to include shares for its
own account in such registration.
(c) Additional Rights Incident to Certain Piggy-back
Registrations. Notwithstanding anything herein to the contrary, if the
Shelf Registration has not yet been declared effective (and, accordingly,
pursuant to the Purchase Agreement the number of PennCorp Shares has not
been determined and the PennCorp Shares have not been issued) and the
Company files a registration statement that, but for the failure of the
PennCorp Shares to have been delivered, otherwise would have enabled the
Holders to participate in a Piggy-back Registration, the Company shall
nevertheless treat the filing of such registration as though it were
subject to Section 3(a) hereof. In that regard, to the extent the Holders
request the right to participate therein (which shall specify, rather than
a number of shares of stock requested to be included therein, the amount of
proceeds the Holders desire to receive from such offering) the Company
shall use its reasonable best efforts to cause the managing underwriter or
underwriters to permit to be included such registration that number of
shares which is sufficient to produce the amount of gross proceeds sought
by the Requesting Holders, which shall be specified in the final prospectus
for such offering as a use of proceeds from such registration.
Notwithstanding the foregoing, if the managing underwriter or underwriters
of such offering advise the Company in writing
that the amount of proceeds proposed to be obtained by the Company
(including to make the payment to the Holders contemplated by this Section
3(c)) would have a Material Adverse Effect, then the Company and the
Selling Piggy-back Holders shall reduce on a Pro Rata Basis (based, for
purposes of this clause (c), on the amount of gross proceeds sought by the
Company and the Holders) the size of the offering such that, as reduced,
the proposed amount of proceeds sought in the offering would not have a
Material Adverse Effect. If the size of the offering is reduced as
aforesaid but any over-allotment option granted to the underwriters in
connection therewith shall be exercised in whole or in part, the Company
and the Holders shall share in the gross proceeds therefrom on a Pro Rata
Basis (calculated as stated in the immediately preceding sentence).
Notwithstanding anything herein to the contrary, the Holders shall not be
entitled to participate in any such registration unless they shall execute
an agreement in form and substance reasonably satisfactory to the Company,
to the effect that any payments made to them pursuant to this Section 3(c)
shall constitute a reduction, on a dollar-for-dollar basis, in the value of
the remaining amount of PennCorp Shares, if any, required to be delivered
to the Holders after such offering pursuant to the Purchase Agreement.
4. Holdback Agreements.
To the extent not inconsistent with applicable law, each
Selling Holder agrees not to effect any public sale or distribution of such
Registrable Securities or similar securities of the Company, including a
sale pursuant to Rule 144 or Rule 144A under the Securities Act, during the
14 days prior to, and during the 180-day period (or such lesser period, if
any, agreed to by the Company in connection with such registration
statement) beginning on the commencement of an underwritten public
distribution under any registration statement pursuant to this Agreement
(except as part of such underwritten public distribution), if and to the
extent requested by the Company or by the managing underwriter or
underwriters.
5. Registration Procedures
In connection with any registration statement hereunder, the
Company will as expeditiously as possible:
(a) at least five days before filing a registration statement
or prospectus or as promptly as practicable prior to filing any
amendments or supplements thereto, the Company will furnish to each
Debtor that is a Selling Holder or, if after the Date of
Distribution, to ICH and to one counsel selected by it to represent
Eligible Distributees who are Selling Holders copies of all
such documents proposed to be filed, which documents will be subject
to the review of such Selling Holders (and their counsel) or such
counsel, as applicable; and after the filing of a registration
statement, the Company will promptly notify each such Selling Holder
or such counsel, as applicable, of comments received from, or any
stop order issued or threatened by, the Commission and take all
reasonable actions required to respond to such comments or, as the
case may be, to prevent the entry of such stop order or to remove it
if it has been entered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the applicable period required by the terms
hereof or, in the case of Piggy-Back Registrations pursuant to
Section 3, for such time period as the Company shall determine in its
sole discretion (but not before the expiration of the 90-day period
referred to in subsection 4(3) of the Securities Act and Rule 174
thereunder, if applicable) and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in
accordance with the intended methods of disposition as set forth in
such registration statement;
(c) furnish to each Debtor that is a Selling Holder, prior to
filing a registration statement, copies of any document to be filed
as an exhibit to such registration statement or incorporated by
reference therein, and thereafter furnish to each Selling Holder such
number of copies of such registration statement, each amendment
thereto (including copies of any document to be filed as an exhibit
to such registration statement or incorporated by reference therein),
the prospectus included in such registration statement (including
each preliminary prospectus), and, promptly after the effectiveness
of a registration statement, to each Selling Holder the definitive
final prospectus filed with the Commission, all supplements thereto
and such other documents as such Selling Holder may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by such Selling Holder;
(d) register or qualify such Registrable Securities under
such other securities or blue sky laws of such jurisdictions within
the United States as any Selling Holder reasonably (in light of such
Selling Holder's intended plan of distribution) requests and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Selling Holder to consummate the disposition
in such jurisdictions of the Registrable Securities
owned by such Selling Holder and keep each such registration or
qualification (or exemption therefrom) effective during the period
such registration statement is effective; provided that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 5(d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any
such jurisdiction;
(e) cause such Registrable Securities to be registered with
or approved by such other governmental agencies or authorities as may
be necessary by virtue of the business and operations of the Company
and its Subsidiaries to enable the Selling Holder or Selling Holders
thereof to consummate the disposition of such Registrable Securities;
(f) notify each Selling Holder of such Registrable
Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence
of an event requiring the preparation of a supplement or amendment to
such prospectus, and prepare and file such supplement, amendment or
any other required documents, so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly make available to each
Selling Holder any such supplement or amendment;
(g) in connection with an underwritten public distribution,
enter into customary agreements (including, if requested, an
underwriting agreement in customary form) and take such other actions
as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities;
(h) make available for inspection during business hours on
reasonable advance notice by any Selling Holder of such Registrable
Securities, any underwriter participating in any disposition pursuant
to such registration statement, and any attorney, accountant or other
professional retained by any such Selling Holder or underwriter
(collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in
connection with such registration statement. Records which the
Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is necessary
to avoid or correct a material misstatement or omission in the
registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each Selling Holder of Registrable Securities agrees
that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the Company and
allow the Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
Each Selling Holder of Registrable Securities further agrees that
information obtained by it as a result of such inspections which is
deemed confidential by the Company shall not be used by it, and it
shall use its best efforts to cause any Inspector not to use such
confidential information, as the basis for any market transactions in
securities of the Company or for any purpose other than any due
diligence review with respect to decisions regarding such Selling
Holder's investment in the Registrable Securities, unless and until
such information is made generally available to the public;
(i) in the event such sale is pursuant to an underwritten
offering, use its commercially reasonable efforts to obtain for the
underwriters a comfort letter or comfort letters from the Company's
independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters as the
managing underwriter reasonably request;
(j) notify the Selling Holders and the managing underwriter
or underwriters, if any, promptly, and (if requested by any such
person) confirm such advice in writing, (1) when the prospectus or
any prospectus supplement or post-effective amendment (or document
incorporated by reference therein) has been filed, and, with respect
to the registration statement or any post-effective amendment, when
the same has become effective, (2) of any request by the Commission
for amendments or supplements to the registration statement or the
prospectus or for additional information, (3) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, and (4) of the happening of any event which makes any
statement made in the registration statement, the prospectus or any
document incorporated therein by reference
untrue or which requires the making of any changes in the
registration statement, the prospectus or any document incorporated
therein by reference in order to make the statements therein not
misleading;
(k) if requested by the managing underwriter or underwriters
or a Selling Holder participating in an underwritten offering,
promptly incorporate in a prospectus supplement or post-effective
amendment, as applicable, such information as the managing
underwriter or underwriters and the Selling Holders of a majority of
the Registrable Securities being sold agree should be included
therein which is not objectionable to the Company or its counsel
relating to the sale of the Registrable Securities, including,
without limitation, information with respect to the number of
Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and with respect to
any other terms of the underwritten (or best efforts underwritten)
offering of the Registrable Securities to be sold in such offering;
and make all required filings of such prospectus supplement or post-
effective amendment as soon as notified of the matters to be
incorporated in such prospectus supplement or post-effective
amendment;
(l) otherwise comply with all applicable rules and
regulations of the Commission, and make available to its
securityholders, as soon as reasonably practicable, an earnings
statement covering a period of twelve months, beginning within three
months after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act;
(m) in the case of an underwritten offering, obtain an
opinion or opinions from counsel for the Company in customary form
and content to opinions given in similar transactions;
(n) make available to the registrar a supply of definitive
securities certificates promptly after a registration of the
Registrable Securities and cooperate with each Selling Holder to
enable such certificates representing Registrable Securities to be in
such denominations and registered in such names as the managing
underwriters, if any, or Selling Holders may request;
(o) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be
(i) approved for listing on the principal securities exchange, if
any, on which the same type or class of securities issued by the
Company are then listed or (ii) if such securities are
not then listed on a securities exchange, authorized to be quoted on
the NASDAQ (or the National Market System of NASDAQ) or such other
national quotation system as the Company deems appropriate, provided
that the applicable listing requirements are met; and
(p) take all other action reasonably requested by the Selling
Holders of a majority of the Registrable Securities and necessary to
effect the registration of the Registrable Securities contemplated
hereby.
The Company may require each Selling Holder of Registrable
Securities as to which any registration is being effected to furnish to the
Company such information regarding the distribution of such Registrable
Securities as the Company may from time to time reasonably request in
writing and such other information as may be legally required in connection
with such registration. Notwithstanding anything herein to the contrary,
no Person may participate in any registration statement hereunder unless
such Person (x) agrees to sell such person's Registrable Securities on the
basis provided in any underwriting arrangements, if any, approved by the
Company (which approval shall not be unreasonably withheld) and (y)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, and other documents reasonably required under the
terms of such underwriting arrangements; provided, however, that no such
Person shall be required to make any representations or warranties in
connection with any such registration other than representations and
warranties as to (i) such Person's ownership of his or its Registrable
Securities to be sold or transferred free and clear of all liens, claims,
and encumbrances, (ii) such Person's power and authority to effect such
transfer, and (iii) such matters pertaining to compliance with securities
laws as may be reasonably requested; provided further, however, that the
obligation of such Person to indemnify pursuant to any such underwriting
arrangements shall be several, not joint and several, among such Persons
selling Registrable Securities, and the liability of each such Person will
be in proportion to, and provided further that such liability will be
limited to, the net amount received by such Person from the sale of its
Registrable Securities pursuant to such registration.
Each Selling Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
Section 5(f) hereof, such Selling Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Selling Holder's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 5(f) hereof, or until it is advised in writing by
the Company that the use of the prospectus may be resumed, and, if so
directed by the Company,
such Selling Holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Selling Holder's
possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice. In the event the Company shall give
any such notice, the Company shall extend the period during which such
registration statement shall be maintained effective by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 5(f) hereof to and including the date when each Selling
Holder of Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 5(f) hereof.
6. Registration Expenses
All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all
Securities Act registration and filing fees, fees and expenses associated
with filings required to be made with the National Association of
Securities Dealers, Inc., fees and expenses of compliance with securities
or "blue sky" laws (including reasonable fees and disbursements of counsel
in connection with "blue sky" qualifications of the Registrable
Securities), printing expenses, underwriting discounts, commissions and
fees attributable to the sale by the Selling Holders of the Registrable
Securities, messenger and delivery expenses, fees and expenses of counsel
for the Company and its independent certified public accountants (including
the expenses of any special audit or "cold comfort" letters required by or
incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), the fees and expenses of any
special experts retained by the Company in connection with such
registration, and fees and expenses of other persons retained by the
Company (all such expenses being herein called "Registration Expenses")
will be borne by the Company whether or not any registration statement
becomes effective; provided that in no event shall Registration Expenses
include any fees and expenses of any counsel, accountants, or other persons
retained or employed by the Holders and/or any Eligible Distributee.
7. Indemnification; Contribution
(a) Indemnification by Company. The Company agrees to
indemnify and hold harmless each Selling Holder of Registrable Securities,
its officers, directors and agents and each Person, if any, who controls
such Selling Holder within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (each such person being sometimes
hereinafter referred to as an "Indemnified Holder") from and against any
and all losses, claims, damages,
liabilities and judgments (including, without limiting the foregoing, the
reasonable legal and other expenses incurred in connection with any action,
suit or proceeding) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration or arising out of
or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments arise out of, or are based upon, any such untrue statement or
omission or allegation thereof based upon information furnished in writing
to the Company by such Selling Holder or on such Selling Holder's behalf
expressly for use therein; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or judgment arises out of or is based on an untrue statement or
alleged untrue statement or omission or alleged omission made in any
preliminary prospectus, if such Selling Holder failed to send or deliver a
copy of the final prospectus (as supplemented, if applicable) with or prior
to the delivery of written confirmation of the sale of such Registrable
Securities by such Selling Holder to the person asserting such loss, claim,
damage, liability or judgment who purchased Registrable Securities that are
the subject thereof from such Selling Holder if it is determined that it
was the responsibility of such Selling Holder to provide such Person with
of the final prospectus (as supplemented, if applicable) and the delivery
of such final prospectus (as supplemented, if applicable) would have cured
the defect giving rise to such loss, claim, damage, liability or judgment.
The Company also agrees to indemnify and provide contribution arrangements
to any underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) (collectively, "Securities Professionals") on substantially the same
basis as that of the indemnification of the Selling Holders provided in
this Section 7 if requested.
(b) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any Indemnified Holder in respect of which indemnity may
be sought from the Company, such Indemnified Holder shall promptly notify
the Company in writing, and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such
Indemnified Holder and the payment of all reasonable expenses. Such
Indemnified Holder shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the reasonable
fees and expenses of such counsel shall be at the expense of such
Indemnified Holder unless (i) the Company has agreed to pay such fees and
expenses or (ii) the Company shall have failed to promptly assume the
defense of such action or proceeding and to employ counsel reasonably
satisfactory to the Indemnified Holder, or (iii) the named parties to any
such action or proceeding (including any impleaded parties) include both
such Indemnified Holder and the Company, and such Indemnified Holder shall
have been advised in writing by counsel that there is a conflict of
interest on the part of counsel employed by the Company to represent such
Indemnified Holder (in which case, if such Indemnified Holder notifies the
Company in writing that it elects to employ separate counsel at the expense
of the Company, the Company shall not have the right to assume the defense
of such action or proceeding on behalf of such Indemnified Holder, it being
understood, however, that the Company shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to
appropriate local counsel) at any time for such Indemnified Holder and any
other Indemnified Holders, which firm shall be designated in writing by a
majority of such Indemnified Holders). The Company shall not be liable for
any settlement of any such action or proceeding effected without the
Company's written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent, or if there is a final,
unappealable judgment for the plaintiff in any such action or proceeding,
the Company agrees to indemnify and hold harmless such Indemnified Holders
from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment. The Company will not consent to
entry of any judgment or enter into any settlement which has not been
consented to in writing by such Indemnified Holder, which consent shall not
be unreasonably withheld.
(c) Indemnification by Holders of Registrable Securities.
Each Selling Holder, severally and not jointly with any other Selling
Holder, agrees to indemnify and hold harmless the Company, its directors
and officers employees and agents and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Selling Holder, but only with respect to
losses, claims, damages, liabilities and judgments arising out of, or based
upon, any such untrue statement or omission or allegations thereof based
upon information furnished in writing by such Selling Holder or on such
Selling Holder's behalf expressly for use in any registration statement or
prospectus or any amendment or supplement thereto, or any preliminary
prospectus relating to the Shelf Registration; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary or final
prospectus, the indemnity agreement contained in this subsection shall not
apply to the extent that any such losses, claims, damages, liabilities or
judgments result from the fact that a final prospectus (as supplemented, if
applicable) was not sent or given to the person asserting any such loss,
claim, damage, liability or judgment at or prior to the written
confirmation of the sale of the Common Stock concerned to such person if it
is determined that it was the responsibility of the Company or any other
person or entity (other than the Selling Holder) to provide such person
with a final prospectus (as supplemented, if applicable) and such final
prospectus (as supplemented, if applicable) would have cured the defect
giving rise to such loss, claim, damage, liability or judgment. In case
any action or proceeding shall be brought against the Company or its
directors, officers, employees or agents or any such controlling person, in
respect of which indemnity may be sought against such Selling Holder, such
Selling Holder shall have the rights and duties given to the Company, and
the Company or its directors, officers, employees or agents or such
controlling person shall have the rights and duties given to such Selling
Holder by the preceding Section 7(b). Notwithstanding the foregoing, in no
event shall the liability of any Selling Holder pursuant to this
Section 7(c) exceed the net proceeds received by such Selling Holder from
the sale of Registrable Securities. Each Selling Holder also agrees to
indemnify and hold harmless Securities Professionals with respect to the
matters referred to in this Section 7(c) on substantially the same basis as
that of the indemnification provided to the Company. The Company shall be
entitled to receive indemnities from Securities Professionals participating
in the distribution, to the same extent as provided above with respect to
information so furnished in writing by such persons specifically for
inclusion in any prospectus or registration statement or any amendment or
supplement thereto or any preliminary prospectus.
(d) Contribution. If the indemnification provided for in
this Section 7 is unavailable to the Company, the Indemnified Holders or
the Securities Professionals in respect of any losses, claims, damages,
liabilities or judgments referred to herein (other than by reason of
exceptions provided in subsection 7(a) or 7(c)), then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments as
between the Company, on the one hand, and each Indemnified Holder on the
other, in such proportion as is appropriate to reflect the relative fault
of the Company and of each Indemnified Holder in connection with such
statements or omissions, as well as any other relevant equitable
considerations. The relative fault of the Company and the Indemnified
Holders on the one hand and of the Securities Professionals on the other
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statements of a material fact relates to information
supplied by the
Company and the Indemnified Holders or by the Securities Professionals.
The relative fault of the Company on the one hand and of each Indemnified
Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Indemnified Holders agree that it would not
be just and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of
this Section 7(d), no Selling Holder shall be required to contribute any
amount in excess of the amount by which the total price at which the
Registrable Securities of such Selling Holder were offered to the public
exceeds the amount of any damages which such Selling 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.
(e) Survival. The indemnity and contribution agreements
contained in this Section 7 shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement or any
underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the
consummation of the sale or successive resale of the Registrable
Securities.
8. Miscellaneous
(a) Remedies. In addition to being entitled to exercise all
rights provided herein and granted by law, including recovery of damages,
each Holder will be entitled to specific performance of its rights under
Sections 2 and 3(c) of this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason
of a breach by it of the provisions of this Agreement and hereby agrees to
waive the defense in any action for specific performance that a remedy at
law would be adequate.
(b) Compliance with Certain Rules. Each of the parties
hereto undertakes, with respect to any of the securities of the Company, to
comply with the provisions of Rules 10b-6 and 10b-7 of the Exchange Act.
(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the Company
has obtained the written consent of Selling Holders of at least a majority
of the Registrable Securities.
(d) No Conflicting Agreements. The Company will not on or
after the date of this Agreement enter into, and the Company has not prior
to the date hereof entered into, any agreement with respect to any of its
securities which otherwise conflicts with the provisions hereof.
(e) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
If to the Debtors:
c/o I.C.H. Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
With a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
5400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the Company:
PennCorp Financial Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to:
Weil, Gotshal & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to any Eligible Distributee:
At the address specified by it upon its execution of a
counterpart to this Agreement.
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, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on
the day delivered if sent by an air courier guaranteeing overnight
delivery.
(f) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of
the parties, including without limitation and without the need for an
express assignment, subsequent holders of Registrable Securities.
(g) Counterparts. This Agreement may be executed 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Texas.
(j) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable;
this Agreement shall be construed and enforced as if such illegal, invalid,
or unenforceable provision had never comprised a part of this Agreement;
and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement. furthermore, in lieu of each such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of
this Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable.
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights granted
by the Company with respect to the Registrable Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PENNCORP FINANCIAL GROUP, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Senior Vice President
I.C.H. CORPORATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
SWL HOLDING CORPORATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
CARE FINANCIAL CORPORATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President
