1
EXHIBIT 4.2
===============================================================================
REGISTRATION RIGHTS AGREEMENT
Dated December 3, 1997
among
SUPERIOR NATIONAL INSURANCE GROUP, INC.,
SUPERIOR NATIONAL CAPITAL TRUST I
and
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
and
CHASE SECURITIES INC.
as Initial Purchasers
===============================================================================
2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of December 3, 1997 among SUPERIOR NATIONAL INSURANCE GROUP,
INC., a Delaware corporation (the "Company"), SUPERIOR NATIONAL CAPITAL TRUST I,
a business trust created under the laws of the state of Delaware (the "Trust"),
and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION ("DLJ") and CHASE
SECURITIES INC. (together the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
November 26, 1997 (the "Purchase Agreement"), among the Company, as issuer of
the 10 3/4% Senior Subordinated Notes due 2017 (the "Senior Subordinated
Notes"), the Trust and the Initial Purchasers, which provides for, among other
things, the sale by the Trust to the Initial Purchasers of 105,000 of the
Trust's 10 3/4% Trust Preferred Securities, liquidation amount $1,000 per Trust
Preferred Security (the "Preferred Securities"), the proceeds of which will be
used by the Trust to purchase Senior Subordinated Notes. The Preferred
Securities, together with the Senior Subordinated Notes and the Company's
guarantee of the Preferred Securities (the "Company Guarantee"), are
collectively referred to as the "Securities." In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company and the Trust have
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
and delivery 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:
"Advice" shall have the meaning set forth in the last paragraph
of Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section
3(t) hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday,
or a day on which banking institutions in New York, New York or
Wilmington, Delaware are authorized or required to be closed.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble to
this Agreement and also includes the Company's successors and permitted
assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended
and Restated Declaration of Trust, dated as of December 3, 1997, by and
among the Company
3
2
Trustees, the Preferred Trustee and the Delaware Trustee, each as
defined therein, and the Company, as sponsor, and by the holders, from
time to time, of undivided beneficial interests in the assets of the
Trust.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Trust; provided, however, that such
depositary must have an address in the Borough of Manhattan, in The City
of New York.
"Effectiveness Period" shall have the meaning set forth in
Section 2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the
Trust to the Holders to exchange all of the Registrable Securities
(other than Private Exchange Securities) for a like principal amount of
Exchange Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Exchange Period" shall have the meaning set forth in Section
2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the Senior
Subordinated Notes, the 10 3/4% Senior Subordinated Notes due December
1, 2017 which are to be offered in exchange for the Subordinated Notes
(the "Exchange Notes") and which will contain terms identical to the
Senior Subordinated Notes (except that they will not contain terms with
respect to the transfer restrictions under the Securities Act, will not
require transfers thereof to be in minimum blocks of $100,000 principal
amount and will not provide for any increase in the interest rate
thereon), (ii) with respect to the Preferred Securities, the Trust's 10
3/4% Trust Preferred Securities, liquidation amount $1,000 per Preferred
Security, which are to be offered in exchange for the Preferred
Securities (the "Exchange Preferred Securities") and which will have
terms identical to the Preferred Securities (except they will not
contain terms with respect to transfer restrictions under the Securities
Act, will not require minimum transfers thereof to be in blocks of
$100,000 liquidation amount and will not provide for any increase in the
distribution rate thereon) and (iii) with respect to the Company
Guarantee, the
4
3
Company's guarantee (the "Exchange Company Guarantee") of the Exchange
Preferred Securities which will have terms identical to the Company
Guarantee.
"Holder" shall mean the Initial Purchasers, for so long as they
own any Registrable Securities, and each of their respective successors,
assigns and direct and indirect transferees who become registered owners
of Registrable Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Senior
Subordinated Notes and the Exchange Notes dated as of December 3, 1997
among the Company, as issuer, and the Indenture Trustee, as defined
therein, as the same may be amended from time to time in accordance with
the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n)
hereof.
"Issue Date" shall mean the date of original issuance of the
Securities.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Preferred Securities.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, limited liability company, or a
government or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, including a
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
material incorporated by reference therein.
5
4
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
hereof.
"Registrable Securities" shall mean the Securities and, if
issued, the Private Exchange Securities; provided, however, that
Securities or Private Exchange Securities, as the case may be, shall
cease to be Registrable Securities when (i) a Registration Statement
with respect to such Securities or Private Exchange Securities for the
exchange or resale thereof, as the case may be, shall have been declared
effective under the Securities Act and such Securities or Private
Exchange Securities, as the case may be, shall have been disposed of
pursuant to such Registration Statement, (ii) such Securities or Private
Exchange Securities, as the case may be, may be sold to the public
pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the Securities Act, (iii) such Securities or Private
Exchange Securities, as the case may be, shall have ceased to be
outstanding or (iv) with respect to the Securities, such Securities have
been exchanged for Exchange Securities upon consummation of the Exchange
Offer and are thereafter freely tradeable by the holder thereof (other
than an affiliate of the Company).
"Registration Expenses" shall mean any and all expenses incident
to performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC or National Association of
Securities Dealers, Inc. (the "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
(including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any
of the Exchange Securities or Registrable Securities) and compliance
with the rules of the NASD, (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in
preparing, printing and distributing any underwriting agreements,
securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating
agency fees, (v) the fees and disbursements of counsel for the Company
and of the independent certified public accountants of the Company,
including the expenses of any "cold comfort" letters required by or
incident to such performance and compliance, (vi) the fees and expenses
of the Trustee, and any exchange agent or custodian, (vii) all fees and
expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges and
(viii) the reasonable fees and expenses of any special experts retained
by the Company in connection with any Registration Statement.
6
5
"Registration Statement" shall mean any registration statement of
the Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and
all amendments and supplements to any 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.
"Rule 144(k) Period" shall mean the period of two years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue
Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to
this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Senior Subordinated Notes" shall have the meaning set forth in
the preamble to this Agreement.
"Shelf Registration" shall mean a registration effected pursuant
to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth
in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Trust pursuant to the provisions of
Section 2(b) hereof which covers all of the Registrable Securities or
all of the Private Exchange Securities, as the case may be, on an
appropriate form under Rule 415 under the Securities 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.
"TIA" shall have the meaning set forth in Section 3(1) hereof.
"Trustees" shall mean any and all trustees with respect to (i)
the Preferred Securities under the Declaration, (ii) the Senior
Subordinated Notes under the Indenture and (iii) the Company Guarantee.
7
6
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any
applicable law or applicable interpretation of the staff of the SEC, the Company
and the Trust shall, for the benefit of the Holders, at the Company's cost, use
its best efforts to (i) cause to be filed with the SEC by December 31, 1997 an
Exchange Offer Registration Statement on an appropriate form under the
Securities Act covering the Exchange Offer, (ii) cause such Exchange Offer
Registration Statement to be declared effective under the Securities Act by the
SEC not later than the date which is 180 days after the Issue Date, and (iii)
keep such Exchange Offer Registration Statement effective for not less than 30
calendar days (or longer if required by applicable law) after the date notice of
the Exchange Offer is mailed to the Holders. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company and the Trust shall promptly
commence the Exchange Offer, it being the objective of such Exchange Offer to
enable each Holder eligible and electing to exchange Registrable Securities for
a like principal amount of Exchange Notes or a like liquidation amount of
Exchange Preferred Securities, together with the Exchange Company Guarantee, as
applicable (assuming that such Holder is not an affiliate of the Company within
the meaning of Rule 405 under the Securities Act and is not a broker-dealer
tendering Registrable Securities acquired directly from the Company for its own
account, acquires the Exchange Securities in the ordinary course of such
Holder's business and 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 Securities Act and under state
securities or blue sky laws.
In connection with the Exchange Offer, the Company and the Trust
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 30 days 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 Depositary for the Exchange
Offer;
(iv) permit Holders to withdraw tendered Securities at any
time prior to the close of business, New York 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 Securities
delivered for exchange, and a statement that such Holder is withdrawing
his election to have such Securities exchanged;
8
7
(v) notify each Holder that any Security not tendered by
such Holder in the Exchange Offer will remain outstanding and continue
to accrue interest or accumulate distributions, as the case may be, but
will not retain any rights under this Agreement (except in the case of
the Initial Purchasers and Participating Broker-Dealers as provided
herein); and
(vi) otherwise comply in all respects with all applicable
laws relating to the Exchange Offer.
If any Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Company and the Trust of a written request from such Initial Purchaser, the
Company and the Trust, as applicable, shall issue and deliver to such Initial
Purchaser in exchange (the "Private Exchange") for the Securities held by such
Initial Purchaser, a like liquidation amount of Preferred Securities of the
Trust, together with the Exchange Company Guarantee, or a like principal amount
of the Senior Subordinated Notes of the Company, as applicable, that are
identical (except that such securities may bear a customary legend with respect
to restrictions on transfer pursuant to the Securities Act) to the Exchange
Securities (the "Private Exchange Securities") and which are issued pursuant to
the Indenture, the Declaration or the Company Guarantee (each of which provides
that the Exchange Securities will not be subject to the transfer restrictions
set forth in the Indenture or the Declaration, as applicable, and that the
Exchange Securities, the Private Exchange Securities and the Securities will
vote and consent together on all matters as one class and that neither the
Exchange Securities, the Private Exchange Securities nor the Securities will
have the right to vote or consent as a separate class on any matter). The
Private Exchange Securities shall be of the same series as the Exchange
Securities and the Company and the Trust will seek to cause the CUSIP Service
Bureau to issue the same CUSIP Numbers for the Private Exchange Securities as
for the Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and,
if applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer or the
Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable
Trustee for cancellation all Securities or portions thereof so accepted
for exchange by the Company; and
(iii) issue, and cause the applicable Trustee under the
Indenture, the Declaration or the Company Guarantee, as applicable, to
promptly authenticate and deliver to each Holder, new Exchange
Securities or Private Exchange Securities, as applicable, equal in
principal amount to the principal amount of the Senior
9
8
Subordinated Notes or equal in liquidation amount to the liquidation
amount of the Preferred Securities (together with the guarantee thereof)
as are surrendered by such Holder.
Distributions on each Exchange Preferred Security and interest on
each Exchange Note issued pursuant to the Exchange Offer and in the Private
Exchange will accrue from the last date on which a distribution or interest was
paid on the Preferred Security or the Subordinated Note surrendered in exchange
therefor or, if no distribution or interest has been paid on such Preferred
Security or Subordinated Note, from the Issue Date. To the extent not prohibited
by any law or applicable interpretation of the staff of the SEC, the Company and
the Trust shall use their best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the SEC. Each Holder of Registrable
Securities who wishes to exchange such Registrable Securities for Exchange
Securities in the Exchange Offer will be required to make certain customary
representations in connection therewith, including, in the case of any Holder of
Preferred Securities, representations that (i) it is not an affiliate of the
Trust or the Company (or, if it is an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable), (ii) the Exchange Securities to be received by it were
acquired in the ordinary course of its business, (iii) at the time of the
Exchange Offer, it has no arrangement with any Person to participate in the
distribution (within the meaning of the Securities Act) and does not intend to
engage in the distribution of the Exchange Preferred Securities and (iv) any
additional representations that in the opinion of counsel to the Company are
necessary under then-existing interpretations of the Commission in order for the
Exchange Offer Registration Statement to be declared effective. If a holder is a
Participating Broker-Dealer, the representations shall also include those set
forth in Section 3(t). The Company and the Trust shall inform the Initial
Purchasers, after consultation with the Trustee, of the names and addresses of
the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall
have the right to contact such Holders and otherwise facilitate the tender of
Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply solely
with respect to Registrable Securities that are Private Exchange Securities and
Exchange Securities held by Participating Broker-Dealers, and the Company and
the Trust shall have no further obligation to register the Registrable
Securities (other than Private Exchange Securities) pursuant to Section 2(b) of
this Agreement.
(b) Shelf Registration. In the event that (i) the Company, the
Trust or the Majority Holders reasonably determine, after conferring with
counsel (which may be in-house counsel), that the Exchange Offer Registration
provided in Section 2(a) above is not available because of any change in law or
in currently prevailing interpretations of the staff of the SEC, (ii) the
Exchange Offer Registration Statement is not declared effective within 180 days
of the
10
9
Issue Date, (iii) upon the request of any Initial Purchaser with respect
to any Registrable Securities held by it, if such Initial Purchaser is not
permitted, in the reasonable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, pursuant to
applicable law or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities that are freely
tradeable without restriction under the Securities Act and applicable blue sky
or state securities laws or (iv) the Company has received an opinion of
independent tax counsel experienced in such matters, to the effect that, as a
result of the consummation of the Exchange Offer, there is more than an
insubstantial risk that (x) the Trust would be subject to United States federal
income tax with respect to income received or accrued on the Senior Subordinated
Notes or the Exchange Notes, (y) interest payable by the Company on such Senior
Subordinated Notes or Exchange Notes would not be deductible by the Company, in
whole or in part, for United States federal income tax purposes or (z) the Trust
would be subject to more than a de minimus amount of other taxes, duties or
other governmental charges (any of the events specified in (i)-(iv) being a
"Shelf Registration Event" and the date of occurrence thereof, the "Shelf
Registration Event Date"), the Company and the Preferred Trustee on behalf of
the Trust will (a) promptly deliver to the Holders and the Delaware Trustee
written notice thereof and (b) at the Company's sole expense, as promptly as
practicable after such Shelf Registration Event Date, as the case may be, and,
in any event, within 45 days after such Shelf Registration Event Date (which
shall be no earlier than 75 days after the Closing Time), file a Shelf
Registration Statement providing for the sale by the Holders of all of the
Registrable Securities, and shall use its best efforts to have such Shelf
Registration Statement declared effective by the SEC as soon as practicable. No
Holder of Registrable Securities shall be entitled to include any of its
Registrable Securities in any Shelf Registration pursuant to this Agreement
unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and furnishes to the
Company and the Trust in writing, within 15 days after receipt of a request
therefor, such information as the Company and the Trust may, after conferring
with counsel with regard to information relating to Holders that would be
required by the SEC to be included in such Shelf Registration Statement or
Prospectus including therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Company and
the Trust all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company and the Trust agree to use their best efforts to keep
the Shelf Registration Statement continuously effective for the Rule 144(k)
Period (subject to extension pursuant to the last paragraph of Section 3 hereof)
or for such shorter period which will terminate when all of the Registrable
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or cease to be outstanding (the
"Effectiveness Period"). The Company and the Trust shall not permit any
securities other than Registrable Securities to be included in the Shelf
Registration. The Company and the Trust will, in the event a Shelf Registration
Statement is filed, provide to each Holder a reasonable number of copies of the
Prospectus which is a part of the Shelf Registration Statement, notify each such
Holder when the Shelf Registration has become effective and take certain other
11
10
actions as are required to permit certain unrestricted resales of the
Registrable Securities. The Company and the Trust further agree, if necessary,
to supplement or amend the Shelf Registration Statement, if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the Securities Act or by
any other rules and regulations thereunder for shelf registrations, and the
Company and the Trust agree to 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) Expenses. The Company, in its capacity as borrower, shall pay
all Registration Expenses in connection with the registration pursuant to
Section 2(a) or 2(b) hereof and will reimburse the Initial Purchasers for the
reasonable fees and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Initial Purchasers, incurred in connection with the Exchange Offer (if the
assistance of such counsel is requested by the Company but not if requested by
the Holders, Initial Purchasers or Participating Broker-Dealers) and, if
applicable, the Private Exchange, and either ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ or any
one other ounsel designated in writing by the Majority Holders to act as counsel
for the Holders of the Registrable Securities in connection with a Shelf
Registration Statement, which other counsel shall be reasonably satisfactory to
the Company. Except as provided herein, each Holder shall pay all expenses of
its counsel, 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.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof 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 offering of Registrable
Securities pursuant to a Shelf Registration Statement 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 been effective during the period of such interference, until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume. The Company and the Trust 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 either of them voluntarily takes any action that
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 unless
such action is required by applicable law.
(e) Additional Interest. In the event that (i) (A) neither the
Exchange Offer Registration Statement nor a Shelf Registration Statement is
filed with the SEC on or prior to December 31, 1997 or (B) notwithstanding that
the Company and the Trust have consummated or will consummate an Exchange Offer,
the Company and the Trust are required to file a Shelf Registration Statement
and such Shelf Registration Statement is not filed on or prior to the date
required by Section 2(b) hereof, then commencing on the day after the applicable
required
12
11
filing date, additional interest shall accrue on the principal amount of the
Senior Subordinated Notes, and additional distributions shall accumulate on the
liquidation amount of the Preferred Securities, each at a rate of 0.25% per
annum; or
(ii)(A) neither the Exchange Offer Registration Statement nor a
Shelf Registration Statement is declared effective by the SEC on or prior to the
180th day after Issue Date or (B) notwithstanding that the Company and the Trust
have consummated or will consummate an Exchange Offer, the Company and the Trust
are required to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the SEC on or prior to the 180th day
after the Issue Date, then, commencing on the 181st day after the Issue Date,
additional interest shall accrue on the principal amount of the Senior
Subordinated Notes and additional distributions shall accumulate on the
liquidation amount of the Preferred Securities, each at a rate of 0.25% per
annum; or
(iii) (A) the Trust has not exchanged Exchange Preferred
Securities for all Preferred Securities or the Company has not exchanged
Exchange Company Guarantees or Exchange Notes for all Company Guarantees or all
Senior Subordinated Notes validly tendered, in accordance with the terms of the
Exchange Offer on or prior to the 30th day after the date on which the Exchange
Offer Registration Statement was declared effective or (B) if applicable, the
Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the second
anniversary of the Issue Date (other than after such time as all Preferred
Securities have been disposed of thereunder or otherwise cease to be Registrable
Securities), then additional interest shall accrue on the principal amount of
Senior Subordinated Notes, and additional distributions shall accumulate on the
liquidation amount of the Preferred Securities, each at a rate of 0.25% per
annum commencing on (x) the 31st day after such effective date, in the case of
(A) above, or (y) the day such Shelf Registration Statement ceases to be
effective in the case of (B) above;
provided, however, that neither the additional interest rate on the Senior
Subordinated Notes, nor the additional distribution rate on the liquidation
amount of the Preferred Securities, may exceed in the aggregate 0.25% per annum;
provided, further, however, that (1) upon the filing of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of clause
(i) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (ii) above),
or (3) upon the exchange of Exchange Preferred Securities, Exchange Company
Guarantees and Exchange Notes for all Preferred Securities, Company Guarantees
and Senior Subordinated Notes tendered (in the case of clause (iii)(A) above),
or upon the effectiveness of the Shelf Registration Statement which had ceased
to remain effective (in the case of clause (iii)(B) above), additional interest
on the Senior Subordinated Notes, and additional distributions on the
liquidation amount of the Preferred Securities as a result of such clause (or
the relevant subclause thereof), as the case may be, shall cease to accrue.
Any amounts of additional interest and additional distributions
due pursuant to Section 2(e)(i), (ii) or (iii) above will be payable in cash on
the relevant record dates for the
13
12
payment of interest and distributions pursuant to the Indenture and the
Declaration respectively.
(f) Specific Enforcement. Without limiting the remedies available
to the Holders, the Company and the Trust acknowledge that any failure by the
Company or the Trust to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Holders for
which there is no adequate remedy at law, that it would not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, any Holder may obtain such relief as may be required to specifically
enforce the Company's and the Trust's obligations under Section 2(a) and Section
2(b) hereof.
3. Registration Procedures. In connection with the obligations of
the Company and the Trust with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Company and the Trust shall use their best
efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within
the relevant time period specified in Section 2 hereof on the appropriate form
under the Securities Act, which form (i) shall be selected by the Company and
the Trust, (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 all financial statements required by the SEC to be
filed therewith; and use its best efforts to cause such Registration Statement
to become effective and remain effective in accordance with Section 2 hereof;
provided, however, that if (1) such filing is pursuant to Section 2(b), or (2) a
Prospectus contained in an Exchange Offer Registration Statement filed pursuant
to Section 2(a) is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities, before filing
any Registration Statement or Prospectus or any amendments or supplements
thereof, the Company and the Trust shall furnish to and afford the Holders of
the Registrable Securities and each such Participating Broker-Dealer, as the
case may be, covered by such Registration Statement, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed. The Company
and the Trust shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders must be
afforded an opportunity to review prior to the filing of such document if the
Majority Holders or such Participating Broker-Dealer, as the case may be, their
counsel or the managing underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement effective for the Effectiveness Period or the
Applicable Period, as the case may be; and cause each Prospectus to be
supplemented, if so determined by the Company or the Trust or requested by the
SEC, by any required prospectus supplement and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act,
14
13
and comply with the provisions of the Securities Act, the Exchange Act and the
rules and regulations promulgated thereunder applicable to it with respect to
the disposition of all securities covered by each Registration Statement during
the Effectiveness Period or the Applicable Period, as the case may be, in
accordance with the intended method or methods of distribution by the selling
Holders thereof described in this Agreement (including sales by any
Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder
of Registrable Securities included in the Shelf Registration Statement, at least
three Business Days prior to filing, that a Shelf Registration Statement with
respect to the Registrable Securities is being filed and advising such Holder
that the distribution of Registrable Securities will be made in accordance with
the method selected by the Majority Holders; and (ii) furnish to each Holder of
Registrable Securities included in the Shelf Registration Statement 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, in order to facilitate the
public sale or other disposition of the Registrable Securities; and (iii)
consent to the use of the Prospectus or any amendment or supplement thereto by
each of the selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto;
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions by the time the applicable
Registration Statement is declared effective by the SEC as any Holder of
Registrable Securities covered by a Registration Statement and each underwriter
of an underwritten offering of Registrable Securities shall reasonably request
in writing in advance of such date of effectiveness, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Holder and underwriter to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by such Holder; provided, however, that the
Company and the Trust shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii) file any
general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers from whom the Company or the Trust has received prior written
notice that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(t) hereof and who are
seeking to sell Exchange Securities and are required to deliver Prospectuses,
notify each Holder of Registrable Securities, or such Participating
Broker-Dealers, as the case may be, their counsel and the managing underwriters,
if any, promptly and promptly confirm such notice in writing (i) when a
Registration Statement has become
15
14
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
amendments and supplements to a Registration Statement or 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
qualification of the Registrable Securities or the Exchange Securities to be
offered or sold by any Participating Broker-Dealer in any jurisdiction described
in paragraph 3(d) hereof 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 Company and the Trust
contained in any purchase agreement, securities sales agreement or other similar
agreement, if any cease to be true and correct in all material respects, (v) of
the happening of any event or the failure of any event to occur or the discovery
of any facts or otherwise, during the Effectiveness Period which makes any
statement made in such Registration Statement or the related Prospectus untrue
in any material respect or which causes such Registration Statement or
Prospectus to omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and (vi) of the Company and the Trust's reasonable determination
that a post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(g) in the case of a Shelf Registration, furnish to each Holder
of Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
(h) 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 in such denominations (consistent with
the provisions of the Indenture and the Declaration) and registered in such
names as the selling Holders or the underwriters may reasonably request at least
two Business Days prior to the closing of any sale of Registrable Securities
pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by Section
3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best efforts to prepare
a supplement or post-effective amendment to a 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 purchasers of
the Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the
16
15
light of the circumstances under which they were made, not misleading; and to
notify each Holder to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and each Holder hereby agrees to suspend
use of the Prospectus to correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time prior
to the filing of any document which is to be incorporated by reference into a
Registration Statement or a Prospectus after the initial filing of a
Registration Statement, provide a reasonable number of copies of such document
to the Holders; and make such of the representatives of the Company and the
Trust as shall be reasonably requested by the Holders of Registrable Securities
or the Initial Purchasers on behalf of such Holders available for discussion of
such document;
(k) obtain a CUSIP number for all Exchange Preferred Securities
and the Preferred Securities (and if the Trust has made a distribution of the
Senior Subordinated Notes to the Holders of the Preferred Securities, the Senior
Subordinated Notes or the Exchange Notes) as the case may be, 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;
(l) cause the Indenture, the Declaration, the Company Guarantee
and the Exchange Company Guarantee to be qualified under the Trust Indenture Act
of 1939 (the "TIA") in connection with the registration of the Exchange
Securities or Registrable Securities, as the case may be, and effect such
changes to such documents as may be required for them to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts to
cause the relevant 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 such documents to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in underwritten
offerings and take all such appropriate actions as are reasonably requested in
order to expedite or facilitate the registration or 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, if requested by (x) any Initial Purchaser, in the case where an
Initial Purchaser holds Securities acquired by it as part of its initial
distribution and (y) other Holders of Securities covered thereby: (i) make such
representations and warranties to Holders of such Registrable Securities and the
underwriters (if any), with respect to the business of the Trust, the Company
and its subsidiaries as then conducted and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and the Trust and
updates thereof (which may be in the form of a reliance letter) in form and
substance 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
17
16
the underwriters (if any) covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such underwriters (it being agreed that the matters to be covered
by such opinion may be subject to customary qualifications and exceptions);
(iii) obtain "cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriters from the independent
certified public accountants of the Company and the Trust (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company and the Trust or of any business acquired by the Company and the Trust
for which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings and such other matters as are reasonably requested by such
underwriters in accordance with Statement on Auditing Standards No. 72; and (iv)
if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement and the managing underwriters or agents)
with respect to all parties to be indemnified pursuant to said Section
(including, without limitation, such underwriters and selling Holders). The
above shall be done at each closing under such underwriting agreement, or as and
to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b)
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, make reasonably available for inspection by any selling
Holder of such Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Trust, the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Company and its subsidiaries to supply all relevant
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement; provided, however, that the
foregoing inspection and information gathering shall be coordinated on behalf of
the Initial Purchasers by you and on behalf of the other parties, by one counsel
designated by you and on behalf of such other parties as described in Section
2(c) hereof. Records which the Company and the Trust determine, in good faith,
to be confidential and any records 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 such Registration Statement provided that at least three (3)
business days' notice is provided to the Company prior to such disclosure, (ii)
the release of such Records is ordered pursuant to a
18
17
subpoena or other order from a court of competent jurisdiction or is necessary
in connection with any action, suit or proceeding or (iii) the information in
such Records has been made generally available to the public. Each selling
Holder of such Registrable Securities and each such Participating Broker-Dealer
will be required to agree in writing that information obtained by it as a result
of such inspections shall be deemed confidential and shall not be used by it as
the basis for any market transactions in the securities of the Trust or the
Company unless and until such is made generally available to the public by the
Company. Each selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to further agree in writing 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 its
expense to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(o) comply with all applicable rules and regulations of the SEC
so long as any provision of this Agreement shall be applicable and make
generally available to its securityholders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private Exchange,
if requested by a Trustee, obtain an opinion of counsel to the Company addressed
to the Trustee for the benefit of all Holders of Registrable Securities
participating in the Exchange Offer or the Private Exchange, as the case may be,
and which includes an opinion that (i) the Company and the Trust, as the case
requires, has duly authorized, executed and delivered the Exchange Securities
and Private Exchange Securities, and (ii) each of the Exchange Securities or the
Private Exchange Securities, as the case may be, constitute a legal, valid and
binding obligation of the Company or the Trust, as the case requires,
enforceable against the Company or the Trust, as the case requires, in
accordance with its respective terms (in each case, with customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to the
Company or the Trust, as applicable (or to such other Person as directed by the
Company or the Trust, respectively), in exchange for the Exchange Securities or
the Private Exchange Securities, as the case may be, the Company or the Trust,
as applicable, shall ▇▇▇▇, or cause to be marked, on such Registrable Securities
delivered by such Holders that such Registrable Securities are being cancelled
in exchange for the Exchange Securities or the Private Exchange Securities, as
the case may be; in no event shall such Registrable Securities be marked as paid
or otherwise satisfied;
19
18
(r) cooperate with each seller of Registrable Securities covered
by any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby;
(t) (A) 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 Purchasers or another representative of the Participating
Broker-Dealers, and which shall contain a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer (a "Participating 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
Purchasers or such other representative, 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 Securities Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(e), 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 reasonable request (each of the
Company and the Trust hereby consents 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
Securities Act, 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), (iii) use its best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such Persons must comply with such
requirements under the Securities Act and applicable rules and regulations in
order to resell the Exchange Securities; provided, however, that such period
shall not be required to exceed 90 days (or such longer period if extended
pursuant to the last sentence of Section 3 hereof) (the "Applicable Period"),
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
(x) the following provision:
20
19
"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 Securities Act in
connection with any resale of Exchange Securities received in
respect of such Registrable Securities pursuant to the Exchange
Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) 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
Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company and the Trust agree to deliver to the Initial Purchasers or to another
representative of the Participating Broker-Dealers, if requested by any such
Initial Purchasers or such other representative of the Participating
Broker-Dealers, on behalf of the Participating Broker- Dealers upon consummation
of the Exchange Offer (i) an opinion of counsel in form and substance reasonable
satisfactory to the Initial Purchasers or such other representative of the
Participating Broker-Dealers, covering the matters customarily covered in
opinions requested in connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being agreed that the
matters to be covered by such opinion may be subject to customary qualifications
and exceptions), (ii) an officers' certificate containing certifications
substantially similar to those set forth in Section 5(g) of the Purchase
Agreement and such additional certifications as are customarily delivered in a
public offering of debt securities and (iii) as well as upon the effectiveness
of the Exchange Offer Registration Statement, a comfort letter, in each case, in
customary form if permitted by Statement on Auditing Standards No. 72.
The Company or the Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Company or the Trust, as applicable, such information regarding such seller as
may be required by the staff of the SEC to be included in a Registration
Statement. The Company or the Trust may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request. The Company
shall have no obligation to register under the Securities Act the Registrable
Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker- Dealers who have notified the Company and the Trust that
they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof and who are seeking to
sell Exchange Securities and are required to deliver Prospectuses, each Holder
agrees that, upon receipt of any notice from the Company or the Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) hereof, such
21
20
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 Section 3(i) hereof or until
it is advised in writing (the "Advice") by the Company and the Trust that the
use of the applicable Prospectus may be resumed, and, if so directed by the
Company and the Trust, such Holder will deliver to the Company or the Trust (at
the Company's or the Trust's expense, as the case requires) all copies in such
Holder's possession of the Prospectus covering such Registrable Securities or
Exchange Securities, as the case may be, current at the time of receipt of such
notice. If the Company or the Trust shall give any such notice to suspend the
disposition of Registrable Securities or Exchange Securities, as the case may
be, pursuant to a Registration Statement, the Company and the Trust shall use
their best efforts to file and have declared effective (if an amendment) as soon
as practicable an amendment or supplement to the Registration Statement and
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and including
the date when the Company and the Trust shall have made available to the Holders
(x) copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Company and the Trust shall, jointly and severally,
indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective directors, officers, employees and
agents, as follows:
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto),
covering Registrable Securities or Exchange Securities, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement
22
21
or omission, if such settlement is effected with the prior written
consent of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel chosen
by such Holder (which such counsel shall be subject to the reasonable
approval of the Company), such Participating Broker-Dealer, or any
underwriter (except to the extent otherwise expressly provided in
Section 4(c) hereof)), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding
by any court or governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) of this Section
4(a);
provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, such Participating Broker- Dealer or any
underwriter with respect to such Holder, Participating Broker-Dealer or any
Underwriter, as the case may be, expressly for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person, with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability, claim, damage or expense of any Holder, Participating Broker-Dealer,
any underwriter or controlling person results from the fact that such Holder,
Participating Broker- Dealer, underwriter or controlling person sold Securities
to a Person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final Prospectus as then amended or
supplemented if the Company had previously furnished copies thereof to such
Holder, Participating Broker-Dealer, underwriter or controlling person and the
loss, liability, claim, damage or expense of such Holder, Participating
Broker-Dealer, underwriter or controlling person results from an untrue
statement or omission of a material fact contained in the preliminary Prospectus
which was corrected in the final Prospectus. Any amounts advanced by the Company
or the Trust to an indemnified party pursuant to this Section 4 as a result of
such losses shall be returned to the Company or the Trust if it shall be finally
determined by such a court in a judgment not subject to appeal or final review
that such indemnified party was not entitled to indemnification by the Company
or the Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Trust, any underwriter and the other selling
Holders and each of their respective directors, officers (including each officer
of the Company and the Trust who signed the Registration Statement), employees,
trustees and agents and each Person, if any, who controls the Company, the
Trust, any underwriter or any other selling Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and
23
22
against any and all loss, liability, claim, damage and expense whatsoever
described in the indemnity contained in Section 4(a) hereof, as incurred, but
only with respect to actions taken in connection with distribution of the
Securities in violation of, or untrue statements or omissions, or alleged untrue
statements or omissions of material fact, made in, the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment to supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company or the Trust by such selling Holder with respect to such Holder
expressly for use in the Registration Statement (or any amendment thereto), or
any such Prospectus (or any amendment or supplement thereto); provided, however,
that, in the case of a Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability which it may have
under this Section 4, except to the extent that it is materially prejudiced by
such failure. An indemnifying party may participate at its own expense in the
defense of such action. If an indemnifying party so elects within a reasonable
time after receipt of such notice, an indemnifying party, severally or jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and reasonably acceptable to
the indemnified parties defendant in such action; provided, however, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and any such indemnified party reasonably determines and advises in
writing that there may be any material legal defenses available to such
indemnified party which are different from or in addition to those available to
such indemnifying party, then in the case of clauses (i) and (ii) of this
Section 4(c), such indemnifying party and counsel for each indemnifying party or
parties shall not be entitled to assume such defense. If an indemnifying party
is not entitled to assume the defense of such action as a result of the proviso
to the preceding sentence, counsel for such indemnifying party and counsel for
each indemnified party or parties shall be entitled to conduct the defense of
such indemnified party or parties. If an indemnifying party assumes the defense
of such action, in accordance with and as permitted by the provisions of this
paragraph, such indemnifying parties shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. Subject to the foregoing, in no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from its own counsel, for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened,
24
23
or any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 4 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional written release in form and substance
satisfactory to the indemnified parties of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not (without the prior written consent of an affected indemnified
party) include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust and the
Holders shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company, the Trust and the Holders, as incurred; provided that no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any Person that was not
guilty of such fraudulent misrepresentation. As between the Company, the Trust
and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and Trust, on the one hand, and the Holders, on
the other hand, with respect to the statements or omissions which resulted in
such loss, liability, claim, damage or expense, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Trust, on the one hand, and of the Holders, on the other hand,
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 the Company or the
Trust, on the one hand, or by or on behalf of the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each affiliate of a Holder, and each director, officer, employee, agent and
Person, if any, who controls a Holder or such affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Holder, and each director or trustee of
each of the Company and the Trust, each officer or trustee of each of the
Company and the Trust who signed the Registration Statement, and each Person, if
any, who controls each of the Company and the Trust within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have
the same rights to contribution as each of the Company or the Trust.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the
25
24
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lockup letters and other documents reasonably required
under the terms of such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering; provided, however, that such underwriters
and managers must be satisfactory to the Company and the Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company or the
Trust is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding, each of the
Company and the Trust, as the case may be, will use its best efforts to file the
reports required to be filed by it under the Securities Act and Section 13(e) or
15(d) of the Exchange Act and the rules and regulations adopted by the SEC
thereunder, that if it 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 of their securities
pursuant to Rule 144A under the Securities Act, (b) deliver such information to
a prospective purchaser as is necessary to permit sales of their securities
pursuant to Rule 144A under the Securities 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 Securities Act within the
limitation of the exemptions provided by (i) Rule 144 under the Securities Act,
as such rule may be amended from time to time, (ii) Rule 144A under the
Securities Act, as such 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 Company and the Trust will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
(b) No Inconsistent Agreements. The Company or the Trust has not
entered into nor will the Company or the Trust on or 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 conflict with and are not inconsistent with the rights granted
to the holders of the Company's or the Trust's other issued and outstanding
securities under any such agreements.
26
25
(c) 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 thereof
may not be given unless the Company and the Trust has 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; provided no amendment, modification,
supplement, waiver or consent to the departure with respect to the provisions of
Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this Agreement may be
amended, without the consent of any Holder of Registrable Securities, by written
agreement signed by the Company, the Trust and DLJ, to cure any ambiguity,
correct or supplement any provision of this Agreement that may be inconsistent
with any other provision of this Agreement or to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with other provisions of this Agreement, (ii) this Agreement may be
amended, modified or supplemented, and waivers and consents to departures from
the provisions hereof may be given, by written agreement signed by the Company,
the Trust and DLJ to the extent that any such amendment, modification,
supplement, waiver or consent is, in their reasonable judgment, necessary or
appropriate to comply with applicable law (including any interpretation of the
Staff of the SEC) or any change therein and (iii) to the extent any provision of
this Agreement relates to the Initial Purchasers, such provision may be amended,
modified or supplemented, and waivers or consents to departures from such
provisions may be given, by written agreement signed by DLJ, the Company and the
Trust.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telefax, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase Agreement; and (ii) if
to the Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
gives in accordance with the provisions of this Section 7(d).
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 an air 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, at the
address specified in the Indenture.
27
26
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, 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 or
the Indenture. 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 of 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 of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers shall
be a third party beneficiary of the agreements made hereunder between the
Company and the Trust, 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 its rights or the rights of
Holders hereunder.
(g) Counterparts. This agreement may be executed in any number of
counterparts and by the parties herein 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 DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
(j) 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.
(k) Securities Held by the Company, the Trust or its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company, the Trust or its affiliates (as such term is defined in Rule 405 under
the Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
28
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
SUPERIOR NATIONAL INSURANCE GROUP,
INC.
By: /s/ [SIGNATURE]
-------------------------------
Name:
Title:
SUPERIOR NATIONAL CAPITAL TRUST I
By: /s/ [SIGNATURE]
-------------------------------
Name:
Title: Company Trustee
Confirmed and accepted as of
the date first above written:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES
CORPORATION
CHASE SECURITIES INC.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION,
as Representative of the Several
Initial Purchasers
By: /s/ [SIGNATURE]
-------------------------------
Name:
Title:
