EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
Dated as of July 15, 1997
Among
CSBI CAPITAL TRUST I,
COMMERCE SECURITY BANCORP, INC.
and
XXXXXX BROTHERS INC.,
as Initial Purchaser
TABLE OF CONTENTS
Page
----
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. SECURITIES SUBJECT TO THIS AGREEMENT. . . . . . . . . . . . . . . . . . 3
3. REGISTERED EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . . . 3
4. SHELF REGISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. ADDITIONAL INTEREST AND ADDITIONAL DISTRIBUTIONS UNDER CERTAIN
CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. REGISTRATION PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . 7
7. REGISTRATION EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 15
8. INDEMNIFICATION AND CONTRIBUTION. . . . . . . . . . . . . . . . . . . . 15
9. RULE 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS . . . . . . . . . . . . . . 18
11. SELECTION OF UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . 18
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
This Registration Rights Agreement (this "Agreement") is made and
entered into as of July 15, 1997 by and among CSBI Capital Trust I, a Delaware
statutory business trust (the "Trust"), Commerce Security Bancorp, Inc., a
Delaware corporation (the "Company"), and Xxxxxx Brothers Inc. (the "Initial
Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of July 10, 1997 (the "Purchase Agreement"), among the
Company, the Trust, the Sellers (as named therein) and the Initial Purchaser,
and any additional purchase agreement between such parties, in each case which
provides for the sale or sales by the Trust to the Initial Purchaser of the
Trust's 11 3/4% Subordinated Capital Income Securities, Series A, liquidation
amount $1,000 per security (the "Capital Securities"). The Company is the owner
of all of the beneficial ownership interest represented by the common securities
(the "Common Securities") of the Trust. The Capital Securities are guaranteed
by a guarantee (the "Guarantee") by the Company, to the extent of funds held by
the Trust. Concurrently with the issuance of the Capital Securities and the
Common Securities, the Trust invested the proceeds of each thereof in the
Company's 11 3/4% Junior Subordinated Debentures due 2027 (the "Junior
Subordinated Debentures" and, together with the Capital Securities and the
Guarantee, the "Securities"). In order to induce the Initial Purchaser to enter
into the Purchase Agreement, the Trust and the Company have agreed to provide
the registration rights set forth in this Agreement for the benefit of the
Initial Purchaser and their direct and indirect transferees and assigns. The
execution and delivery of this Agreement is a condition to the Initial
Purchaser's obligations to purchase the Capital Securities under the Purchase
Agreement.
The parties hereby agree as follows:
1 DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:
ADDITIONAL INTEREST: as defined in Section 5(a) hereof.
ADDITIONAL DISTRIBUTIONS: as defined in Section 5(a) hereof.
BROKER-DEALER: Any broker or dealer registered under the
Exchange Act.
CLOSING DATE: The date on which the Securities were sold to the
Initial Purchaser.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement relating to the New Securities to be issued in the
Exchange Offer, (ii) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer open for a
period not less than the minimum period required pursuant to Section 3(b)
hereof, and (iii) the delivery by the Company and the Trust of the New
Securities in the same aggregate principal amount as the aggregate
principal amount of Transfer Restricted Securities that were tendered by
Holders thereof pursuant to the Exchange Offer.
DECLARATION: The Amended and Restated Declaration of Trust,
dated as of July 15, 1997, among Wilmington Trust Company, as Property
Trustee, Wilmington Trust Company, as Delaware Trustee, and the Regular
Trustees named therein, pursuant to which the Capital Securities are being
issued, as amended or supplemented from time to time in accordance with the
terms thereof.
DISTRIBUTION: As defined in the Declaration.
EFFECTIVENESS TARGET DATE: (i) in the case of the Exchange Offer
Registration Statement, the 120th day after the filing date of the
Company's annual report on Form 10-K or Form 10-KSB, as applicable,
2
subject to extension as permitted by the last sentence of Section 3(a), and
(ii) in the case of a Shelf Registration Statement, the 120th day after the
Shelf Filing Deadline (as defined in Section 4(a) hereof), subject to
extension as permitted by clause (y) of Section 4(a).
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Company and the Trust
under the Securities Act of the New Securities pursuant to a Registration
Statement pursuant to which the Company and the Trust offer the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such Holders
for New Securities in an aggregate amount equal to the aggregate amount of
the Transfer Restricted Securities tendered in such exchange offer by such
Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration
Statement relating to the Exchange Offer, including the Prospectus which
forms a part thereof.
EXEMPT RESALES: The transactions in which the Initial Purchaser
propose to sell the Securities to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Securities Act, and to
certain institutional "accredited investors," as such term is defined in
Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act
("Accredited Institutions").
GUARANTEE AGREEMENT: The Amended and Restated Guarantee
Agreement, dated as of July 15, 1997, made by the Company, pursuant to
which the Guarantee is being issued, as amended or supplemented from time
to time in accordance with the terms thereof.
HOLDERS: As defined in Section 2(b) hereof.
INITIAL PURCHASER: As defined in the preamble hereto.
NASD: National Association of Securities Dealers, Inc.
NEW JUNIOR SUBORDINATED DEBENTURES: The Company's Junior
Subordinated Debentures to be issued pursuant to the Exchange Offer.
NEW SECURITIES: The Securities to be issued pursuant to the
Declaration and the Guarantee Agreement in the Exchange Offer.
PERSON: An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the
Company and the Trust relating to (a) an offering of New Securities
pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration
Statement, which is filed pursuant to the provisions of this Agreement, in
either case, including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits
and material incorporated by reference therein.
3
SECURITIES ACT: The Securities Act of 1933, as amended.
SHELF FILING DEADLINE: As defined in Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939, as amended.
TRANSFER RESTRICTED SECURITIES: Each Security, until the
earliest to occur of (a) the date on which such Security has been exchanged
by a Person other than a Broker-Dealer for New Securities in the Exchange
Offer, (b) following the exchange by a Broker-Dealer in the Exchange Offer
of such Security for one or more New Securities, the date on which such New
Securities are sold to a purchaser who receives from such Broker-Dealer on
or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, (c) the date on which such Security
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement, or (d) the date on which
such Security is distributed to the public pursuant to Rule 144 under the
Securities Act or (e) the date on which such Security may be sold pursuant
to Rule 144(k) under the Securities Act.
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A
registration in which securities of the Company and the Trust are sold to
an underwriter for reoffering to the public.
2 SECURITIES SUBJECT TO THIS AGREEMENT.
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person beneficially owns Transfer Restricted Securities.
3 REGISTERED EXCHANGE OFFER.
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), the Company and the Trust
shall (i) cause to be filed with the Commission as soon as practicable on
or prior to May 15, 1998, but in no event later than 45 days after the
filing of the Company's Annual Report on Form 10-K or Form 10-KSB for the
year ended December 31, 1997, a Registration Statement under the Securities
Act relating to the New Securities and the Exchange Offer, (ii) use all
commercially reasonable efforts to cause such Registration Statement to
become effective at the earliest possible time, but in no event later than
120 days after the filing of the Company's Annual Report on Form 10-K or
Form 10-KSB for the year ended December 31, 1997, (iii) in connection with
the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement
to become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Securities Act and
(C) all necessary filings in connection with the registration and
qualification of the New Securities under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) unless the Exchange Offer would not be permitted by
applicable law or Commission policy, will commence the Exchange Offer and
use all commercially reasonable efforts to issue on or prior to 30 business
days after the date on which such Registration Statement was declared
effective by the Commission, New Securities in exchange for all Securities
tendered prior thereto in the Exchange Offer. The Exchange Offer shall be
on the appropriate form permitting registration of the New Securities to be
offered in exchange for the Transfer Restricted Securities and to permit
resales of New Securities held by Broker-
4
Dealers as contemplated by Section 3(c) below. Notwithstanding any other
provision of this Agreement, including, without limitation, clauses (ii)
and (iii) of this subsection, if at any time (x) the Company is in
possession of material non-public information regarding the Company,
(y) the Board of Directors of the Company determines (based on the
advice of counsel) that the Prospectus included in the Exchange Offer
Registration Statement would have to disclose such material non-public
information in order for the Prospectus not to be materially false or
misleading, and (z) the Board of Directors of the Company determines
in good faith that disclosure of such material non-public information
would not be in the best interests of the Company and the holders of
its common stock, the Company may delay filing a pre-effective amendment
to the Exchange Offer Registration Statement or requesting the
effectiveness of such Exchange Offer Registration Statement, the period
during which such a delay occurs being referred to herein as the
Exchange Suspense Period. For purposes of this Section, the Exchange
Suspense Period shall commence upon notice to the Initial Purchaser and
shall end on the earlier of the date that the Company (i) files a request
with the Commission requesting that the Commission declare the Exchange
Offer Registration Statement effective, or (ii) files a pre-effective
amendment to the Exchange Offer Registration Statement. In no event,
however, shall an Exchange Suspense Period continue for more than 30
consecutive business days, nor shall all Exchange Suspense Periods continue
for more than an aggregate of 45 business days (whether or not consecutive)
prior to the effectiveness of the Exchange Offer Registration Statement.
(b) The Company and the Trust shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the
Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate
the Exchange Offer; PROVIDED, HOWEVER, that in no event shall such period
be less than 20 business days. The Company and the Trust shall cause the
Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the New Securities shall be included in the
Exchange Offer Registration Statement. The Company and the Trust shall use
all commercially reasonable efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter.
(c) The Company and the Trust shall indicate in a "Plan of
Distribution" section contained in the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Securities
that are Transfer Restricted Securities and that were acquired for its own
account as a result of market-making activities or other trading activities
(other than Transfer Restricted Securities acquired directly from the
Company and the Trust), may exchange such Securities pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of the New Securities received by such Broker-
Dealer in the Exchange Offer, which prospectus delivery requirement may be
satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such
resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such "Plan of Distribution" shall
not name any such Broker-Dealer or disclose the amount of New Securities
held by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy announced after the date of
this Agreement.
The Company and the Trust shall use all commercially reasonable
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales of
New Securities acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of 180 days from the date on which the Exchange Offer
Registration Statement is declared effective. Notwithstanding the immediately
preceding sentence, the Company and the Trust shall have no obligation to keep
the Exchange Offer Registration Statement effective after the Consummation
5
of the Exchange Offer unless one or more Broker-Dealers notifies the Company
in writing on or before the 10th business day after the Consummation of the
Exchange Offer, as provided in the letter of transmittal accompanying the
Exchange Offer Prospectus, that the Broker-Dealer is obligated to deliver a
Prospectus in connection with resales of New Securities received by such
Broker-Dealer in the Exchange Offer.
The Company and the Trust shall provide sufficient copies of the
latest version of such Prospectus to any Broker-Dealers that have timely given
such notice promptly upon request at any time during such 180-day period in
order to facilitate such resales.
4 SHELF REGISTRATION.
(a) SHELF REGISTRATION. If (i) the Company and the Trust are
not required to file an Exchange Offer Registration Statement or to
consummate the Exchange Offer because the Exchange Offer is not permitted
by applicable law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), (ii) the Company has received
an opinion of a law firm having a recognized tax practice or a nationally
recognized accounting firm, 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 Junior Subordinated
Debentures or New Junior Subordinated Debentures, (y) interest payable by
the Company on such Junior Subordinated Debentures or New Junior
Subordinated Debentures 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 minimis amount of other taxes, duties or
other governmental charges or (iii) if any Holder of Transfer Restricted
Securities that is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) or an "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) shall notify the
Company on or before the 20th business day after the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that
such Holder may not resell the New Securities acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) that such
Holder is a Broker-Dealer and holds Securities acquired directly from the
Trust and the Company or one of its affiliates, then the Trust and the
Company shall use all commercially reasonable efforts to:
(x) cause to be filed a shelf registration
statement pursuant to Rule 415 under the Securities Act,
which may be an amendment to the Exchange Offer Registration
Statement (in either event, the "Shelf Registration
Statement"), on or prior to the earliest to occur of (1) the
30th day after the date on which the Trust and the Company
determines that they are not required to file the Exchange
Offer Registration Statement or (2) the 30th day after the
date on which the Trust and the Company receive notice from
a Holder of Transfer Restricted Securities as contemplated
by clause (iii) above (such earliest date being the "Shelf
Filing Deadline"), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities
the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be
declared effective by the Commission on or before the 120th
day after the Shelf Filing Deadline; PROVIDED, HOWEVER,
that, in no event shall the Company be required to cause
such Shelf Registration Statement to be declared effective
by the Commission prior to the Effectiveness Target Date;
PROVIDED, FURTHER, that, notwithstanding any other provision
of this Agreement, if at any time (x) the Company is in
possession of material non-public information regarding the
Company, (y) the Board of Directors of the Company
determines (based on the advice of counsel) that the
Prospectus included in the Shelf Registration Statement
would have to
6
disclose such material non-public information in order
for the Prospectus not to be materially false or
misleading, and (z) the Board of Directors of the Company
determines in good faith that disclosure of such material
non-public information would not be in the best interests of
the Company and the holders of its common stock, the Company
may delay filing a pre-effective amendment to the Shelf
Registration Statement or requesting the effectiveness of
such Shelf Registration Statement, the period during which
such a delay occurs being referred to herein as the Shelf
Suspense Period. For purposes of this Section, the Shelf
Suspense Period shall commence upon notice to the Initial
Purchaser and shall end on the earlier of the date that the
Company (i) files a request with the Commission requesting
that the Commission declare the Shelf Registration Statement
effective, or (ii) files a pre-effective amendment to the
Shelf Registration Statement. In no event, however, shall a
Shelf Suspense Period continue for more than 30 consecutive
business days, nor shall all Shelf Suspense Periods continue
for more than an aggregate of 45 business days (whether or
not consecutive) prior to the effectiveness of the Shelf
Registration Statement.
The Trust and the Company shall use all commercially reasonable efforts to
keep such Shelf Registration Statement continuously effective, supplemented
and amended as required by the provisions of Sections 6(b) and (c) hereof
to the extent necessary to ensure that it is available for resales of
Securities by the Holders of Transfer Restricted Securities entitled to the
benefit of this Section 4(a), and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules
and regulations of the Commission as announced from time to time, for a
period ending on the second anniversary of the Closing Date.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION
WITH THE SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Trust and the Company in writing, within 20
business days after receipt of a request therefor, such information as the
Trust and the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be
entitled to Additional Distributions pursuant to Section 5 hereof or the
Junior Subordinated Debentures unless and until such Holder shall have used
its best efforts to provide all such reasonably requested information.
Each Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Trust and the Company all information
required to be disclosed in order to make the information previously
furnished to the Trust and the Company by such Holder not materially
misleading.
5 ADDITIONAL INTEREST AND ADDITIONAL DISTRIBUTIONS UNDER CERTAIN
CIRCUMSTANCES.
(a) If (w) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (x) any of such Registration Statements has not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement, (y) the Exchange Offer has not been
Consummated within 30 business days after the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement or (z) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
(other than for any reason set forth in Section 6(c)(iii)(D) which shall not
exceed 30 consecutive days, or 90 days in any twelve month period) without being
succeeded within two business days by a post-effective amendment to such
Registration Statement that cures such failure and that is itself immediately
declared effective (each such event referred to in clauses (w) through (z), a
"Registration Default"), additional interest (the "Additional Interest") shall
become payable in respect of the Junior Subordinated Debentures (including in
respect of amounts accruing during any Extension Period (as defined in the
Declaration)) and corresponding additional Distributions (the "Additional
Distributions") shall become payable to each Holder of Capital Securities (in
its capacity as such and
7
not in its capacity as an indirect holder of a pro rata share of the Junior
Subordinated Debentures) with respect to the first 90-day period immediately
following the occurrence of such Registration Default at a rate of 0.50% per
annum for each day that the Registration Default continues. The amount of
Additional Interest (and the corresponding amount of Additional Distributions
payable to any Holder of Capital Securities) shall further increase at a rate
of 0.25% per annum with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum rate of Additional
Interest (and corresponding Additional Distributions) of 1.0% per annum.
Following the cure of all Registration Defaults relating to any particular
Transfer Restricted Securities, the accrual of Additional Interest (and
corresponding Additional Distributions) with respect to such Transfer
Restricted Securities will cease. Any amounts of Additional Interest (and
corresponding Additional Distributions) will be payable in cash on the same
original Interest Payment Dates (as defined in the Indenture relating to the
Junior Subordinated Debentures) as regular payments of interest on the Junior
Subordinated Debentures. The amount of Additional Interest (and
corresponding Additional Distributions) will be determined by multiplying the
applicable Additional Interest rate by the principal amount of the Junior
Subordinated Debentures multiplied by a fraction, the numerator of which is
the number of days such Additional Interest rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
All obligations of the Trust and the Company set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
(b) The Trust and the Company shall notify the Property Trustee within
two business days after each and every date on which an event occurs in respect
of which Additional Distributions are required to be paid (an "Event Date").
Additional Distributions shall be paid by depositing Additional Interest with
the Property Trustee, in trust, for the benefit of the Holders thereof, on or
before the applicable Interest Payment Date (whether or not any payment other
than Additional Distributions is payable on the Capital Securities), immediately
available funds in sums sufficient to pay the Additional Distributions then due
to Holders of Transfer Restricted Securities with respect to which the Property
Trustee serves. Each obligation to pay Additional Interest and Additional
Distributions shall be deemed to accrue from the applicable date of the
occurrence of the Registration Default.
6 REGISTRATION PROCEDURES.
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with
the Exchange Offer, the Trust and the Company shall comply with all of the
provisions of Section 6(c) below, shall use all commercially reasonable
efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following
provisions:
(i) If in the reasonable opinion of counsel to the Trust
and the Company there is a question as to whether the Exchange Offer
is permitted by applicable law, the Trust and the Company hereby agree
to use all commercially reasonable efforts to seek a no-action letter
from the Commission allowing the Trust and the Company to Consummate
an Exchange Offer for such Securities. The Trust and the Company
hereby agree to pursue the issuance of such a decision to the
Commission staff level but shall not be required to take commercially
unreasonable action to effect a change of Commission policy. The
Trust and the Company hereby agree, however, to (A) participate in
telephonic conferences with the Commission, (B) deliver to the
Commission staff an analysis prepared by counsel to the Trust and the
Company setting forth the legal bases, if any, upon which such counsel
has concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the
8
terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Trust or
the Company, prior to the Consummation thereof, a written
representation to the Trust or the Company (which may be contained in
the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate
of the Trust or the Company, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any
Person to participate in, a distribution of the New Securities to be
issued in the Exchange Offer and (C) it is acquiring the New
Securities in its ordinary course of business. In addition, all such
Holders of Transfer Restricted Securities shall otherwise cooperate in
the Company's and the Trust's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and
any such Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in XXXXXX
XXXXXXX AND CO., INC. (available June 5, 1991) and EXXON CAPITAL
HOLDINGS CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of New Securities obtained by such Holder in
exchange for Securities acquired by such Holder directly from the
Trust or the Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Trust shall provide a
supplemental letter to the Commission (A) stating that the Company and
the Trust are registering the Exchange Offer in reliance on the
position of the Commission enunciated in EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), XXXXXX XXXXXXX AND CO., INC.
(available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a
representation that the Company and the Trust have not entered into
any arrangement or understanding with any Person to distribute the New
Securities to be received in the Exchange Offer and that, to the best
of the Company's and the Trust's information and belief, based only on
written representations received under clause (ii) above, that each
Holder participating in the Exchange Offer is acquiring the New
Securities in its ordinary course of business and has no arrangement
or understanding with any Person to participate in the distribution of
the New Securities received in the Exchange Offer.
(b) SHELF REGISTRATION STATEMENT. In connection with any Shelf
Registration Statement, the Company and the Trust shall comply with all the
provisions of Section 6(c) below and shall use all commercially reasonable
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto the Company and the
Trust will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available
for the sale of the Transfer Restricted Securities in accordance with the
intended method or methods of distribution thereof.
(c) GENERAL PROVISIONS. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale
or resale of Transfer Restricted Securities (including, without limitation,
any Registration Statement and the related Prospectus required to permit
resales of Securities by Broker-Dealers), the Company and the Trust shall:
(i) use all commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all
requisite financial statements for the period
9
specified in Section 3 or 4 of this Agreement, as applicable; upon
the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company and the Trust shall
file promptly an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or
(B), use all commercially reasonable efforts to cause such
amendment to be declared effective and such Registration Statement
and the related Prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may
be necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as
applicable, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration
Statement have been sold or cease to be Transfer Restricted
Securities within the meaning of this Agreement; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a
timely manner; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance
with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holder(s) promptly and, if requested by such Persons, to confirm
such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the
suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, and (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact
made in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to
make the statements therein not misleading; PROVIDED that the
Company shall not be required to disclose the nature or substance
of any such fact or event as long as it is acting in good faith.
If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification
of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Trust and the Company shall use all commercially
reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv) furnish to each of the selling or exchanging Holders
and each of the underwriter(s), if any, before filing with the
Commission, copies of any Shelf Registration Statement or any
Prospectus included therein or any amendments or supplements to any
such Shelf Registration Statement or Prospectus (excluding all
documents incorporated by reference after the initial filing of
such Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), if any, for a period
of at least three business days, and the Trust
10
and the Company will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within such five
business days. A selling Holder or underwriter, if any, shall be
deemed to have reasonably objected to such filing if in the
reasonable opinion of counsel to such Person such Registration
Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission;
(v) after the filing of any document that is to be
incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders
and to the underwriter(s), if any, promptly upon request and make
the Trust's and the Company's representatives available for
discussion of such document and other customary due diligence
matters;
(vi) subject to the Company's prior receipt of customary
confidentiality agreements, make available at reasonable times for
inspection by the selling Holders, any underwriter participating in
any disposition pursuant to such Registration Statement, and any
attorney or accountant retained by such selling Holders or any of
the underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Trust and the Company and
cause the Trust's and the Company's officers, directors, managers
and employees to supply all information reasonably requested by any
such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and
prior to its effectiveness;
(vii) if requested by any selling Holders under the Shelf
Registration Statement or the underwriter(s), if any, promptly
incorporate in any Shelf Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary,
such information as such selling Holders and underwriter(s), if any,
may reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the
principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold
in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
the Trust and the Company are notified of the matters to be
incorporated in such Prospectus supplement or post-effective
amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by
reference therein and all exhibits (including, upon request, all
exhibits incorporated therein by reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may
request; the Trust and the Company hereby consent to the use of the
Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(x) enter into such agreements (including an
underwriting agreement), and make such customary representations
and warranties, and take all such other actions in connection
11
therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement, all to such extent as may
be reasonably requested by any Purchaser or by any Holder of
Transfer Restricted Securities or underwriter in connection with
any sale or resale pursuant to any Registration Statement
contemplated by this Agreement; and in connection with an
Underwritten Registration, the Trust and the Company shall:
(A) upon request, furnish to each selling Holder
and each underwriter, if any, in such substance and scope as they
may reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date of
the effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of the
effectiveness of the Shelf Registration Statement, signed
by (y) the Chairman of the Board, its President or a Vice
President and (z) the Chief Financial Officer of the
Company, confirming, as of the date thereof, such matters
as such parties may reasonably request;
(2) an opinion, dated the date of the
effectiveness of the Shelf Registration Statement, of
counsel for the Company and the Trust, covering such
matters as such parties may reasonably request, and in
any event including a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of the Company and the Trust,
representatives of the independent public accountants for
the Company, the Initial Purchaser's representatives and
the Initial Purchaser's counsel in connection with the
preparation of such Registration Statement and the
related Prospectus and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying as
to materiality to a large extent upon facts provided to
such counsel by officers and other representatives of the
Company and the Trust and without independent check or
verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus contained
in such Registration Statement as of its date, contained
an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. Without limiting
the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or
fairness of the financial statements, notes and schedules
and other financial data included in any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the date
of the effectiveness of the Shelf Registration Statement,
from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection
with primary
12
underwritten offerings.
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to all
parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company and the Trust pursuant to
this clause (x), if any.
If at any time the representations and warranties of the
Company contemplated in clause (A)(1) above cease to be true and
correct, the Company shall so advise the Initial Purchaser and the
underwriter(s), if any, and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s) may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the Shelf Registration Statement; PROVIDED, HOWEVER, that neither the
Company nor the Trust shall not be required to register or qualify as
a foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xii) shall issue, upon the request of any Holder of
Securities covered by the Shelf Registration Statement, New Securities
in the same amount as the Securities surrendered to the Company and
the Trust by such Holder in exchange therefor or being sold by such
Holder; such New Securities to be registered in the name of such
Holder or in the name of the purchaser(s) of such Securities, as the
case may be; in return, the Securities held by such Holder shall be
surrendered to the Company and the Trust for cancellation;
(xiii) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities
to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any,
may request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xiv) if any fact or event contemplated by clause
(c)(iii)(D) above shall exist or have occurred, as promptly as is
practicable under the circumstances in the good faith determination of
the Company prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Registration Statement will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading; and any
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
13
not misleading;
(xv) provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide certificates for the Transfer Restricted
Securities;
(xvi) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use all commercially reasonable
efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may be
necessary to enable the Holders selling Transfer Restricted Securities
to consummate the disposition of such Transfer Restricted Securities;
(xvii) otherwise use all commercially reasonable efforts
to comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders, as soon as
practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the twelve-
month period (A) commencing at the end of any fiscal quarter in which
Transfer Restricted Securities are sold to underwriters in a firm or
best efforts Underwritten Offering or (B) if not sold to underwriters
in such an offering, beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the
Registration Statement;
(xviii) cause the Indenture, the Junior Subordinated
Debentures, the Guarantee and the Declaration to be qualified under
the TIA not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith,
cooperate with the applicable trustees and the Holders of Securities
to effect such changes, if any, to the Junior Subordinated Debentures,
the Guarantee and the Declaration as may be required for the Junior
Subordinated Debentures, the Guarantee and the Declaration to be so
qualified in accordance with the terms of the TIA; and execute, and
use their best efforts to cause the Property Trustee to execute, all
documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Junior Subordinated Debentures to be so qualified in a timely
manner; and
(xix) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13(a) and Section 15(d) of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company or the Trust of
the existence of any fact or event of the kind described in Section
6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xv) hereof, or until it is
advised in writing (the "Advice") by the Company or the Trust that the use
of the Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company or the Trust, each Holder will
deliver to the Company or the Trust (at the Company's and the Trust's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Transfer Restricted Securities
that was current at the time of receipt of such notice. In the event the
Company or the Trust shall give any such notice, the time period regarding
the effectiveness of such Registration Statement set forth in Section 3 or
4 hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such
14
Registration Statement shall have received the copies of the supplemented
or amended Prospectus contemplated by Section 6(c)(xv) hereof or shall
have received the Advice.
7 REGISTRATION EXPENSES.
All expenses incident to the Company's and the Trust's
performance of or compliance with this Agreement, other than the expenses
of any Holder or any underwriter engaged by such Holder, will be borne by
the Company and the Trust, regardless of whether a Registration Statement
becomes effective, including without limitation: (i) all registration and
filing fees and expenses (including filings made by any Holder with the
NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules
and regulations of the NASD)); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the New
Securities to be issued in the Exchange Offer and printing of
Prospectuses), and associated messenger and delivery services and
telephone; (iv) all fees and disbursements of counsel for the Company and
the Trust; and (v) all fees and disbursements of independent certified
public accountants of the Company and the Trust (including the expenses of
any special audit and comfort letters required by or incident to such
performance).
The Company and the Trust will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company or the Trust.
8. INDEMNIFICATION AND CONTRIBUTION.
(i) In connection with a Shelf Registration Statement or in
connection with any delivery of a Prospectus contained in an Exchange Offer
Registration Statement by any participating Broker-Dealer or Initial
Purchaser, as applicable, who seeks to sell New Securities, the Company and
the Trust shall indemnify and hold harmless each Holder of Transfer
Restricted Securities included within any such Shelf Registration Statement
and each participating Broker-Dealer or Initial Purchaser selling New
Securities, and each Person, if any, who controls any such Person within the
meaning of Section 15 of the Securities Act (each, a "Participant") from and
against any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Securities) to which
such Participant or controlling Person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such
Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse each
Participant promptly upon demand for any legal or other expenses reasonably
incurred by such Participant in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; PROVIDED, HOWEVER, that (i) the Company and
the Trust shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in any such Registration Statement or any prospectus forming part
thereof or in any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company and the Trust by
or on behalf of any Participant specifically for inclusion therein; and
PROVIDED FURTHER that as to any preliminary Prospectus, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of
any such Participant or any controlling Person of such Participant on account
of any loss, claim, damage, liability or action arising from the sale of the
New Securities to any Person by that Participant if (i) that Participant
failed to send or give a copy of the Prospectus, as the same may be amended
or supplemented, to that Person within the time required by the Securities
Act and (ii) the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
preliminary Prospectus was
15
corrected in the Prospectus, unless, in each case, such failure resulted from
non-compliance by the Company and the Trust with Section 6(c). The foregoing
indemnity agreement is in addition to any liability which the Company and the
Trust may otherwise have to any Participant or to any controlling Person of
that Participant.
(ii) Each Participant, severally and not jointly, shall indemnify
and hold harmless the Company and the Trust, each of its directors, officers,
employees or agents and each Person, if any, who controls the Company and the
Trust within the meaning of Section 15 of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action
in respect thereof, to which the Company and the Trust or any such director,
officer, employees or agents or controlling Person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
Prospectus, Registration Statement or Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company and the Trust by or on behalf of such Participant
specifically for inclusion herein, and shall reimburse the Company and the
Trust and any such director, officer, employees or agents or controlling
Person for any legal or other expenses reasonably incurred by the Company and
the Trust or any such director, officer, employees or agents or controlling
Person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses
are incurred. The foregoing indemnity agreement is in addition to any
liability which any Participant may otherwise have to the Company and the
Trust or any such director, officer or controlling Person.
(iii) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent it
has been materially prejudiced by such failure and, PROVIDED FURTHER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that any indemnified
party shall have the right to employ separate counsel in any such action and
to participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party
in writing, (ii) such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the indemnifying party
and in the reasonable judgment of such counsel it is advisable for such
indemnified party to employ separate counsel or (iii) the indemnifying party
has failed to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action on behalf
of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions 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 local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing (A) by the Initial
Purchaser, if the indemnified parties under this Section 8 consist of, or
include the Initial Purchaser or any of its officers, employees or
controlling Persons, (B) by the Holders of a majority in aggregate
liquidation amount
16
of the Capital Securities, if the indemnified parties include the Holders but
not the Initial Purchaser, or (C) by the Company, if the indemnified parties
under this Section consist of the Company, the Trust or any of their
respective directors, officers, trustees, employees or controlling Persons.
Each indemnified party, as a condition of the indemnity agreements contained
herein, shall use its best efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit
or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees
to indemnify and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment.
(iv) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as
a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the exchange of the
Securities pursuant to the Registered Exchange Offer, or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the indemnifying party on the one hand and the indemnified party on the
other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Trust and the Company or the
Participants, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Trust and the Participants agree that it would
not be just and equitable if contributions pursuant to this Section 8(d) were
to be determined by pro rata allocation (even if the Participants were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in respect thereof, referred
to above in this Section 8(d) shall be deemed to include, for purposes of
this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Participant shall be required to contribute any amount in excess of the
amount by which the net proceeds received by such Participant from an
offering of the Notes exceeds the amount of any damages which such
Participant has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. The
Participants' obligations to contribute as provided in this Section 8(d) are
several and not joint.
9. RULE 144A.
The Company and the Trust hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make
available to any Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities from such Holder or beneficial owner, upon
request, the information required by Rule 144A(d)(4) under the Securities Act
in order to permit resales of such Transfer Restricted Securities pursuant to
Rule 144A, if at the time of such request
17
the Company is subject to neither Section 13 nor 15(d) of the Exchange Act.
10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering,
the investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; PROVIDED, that such investment bankers and managers must be
reasonably satisfactory to the Company.
12. MISCELLANEOUS.
(a) REMEDIES. The Company and the Trust agree that monetary
damages (including the Additional Interest and Additional Distributions
contemplated hereby) would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement
and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company and the Trust will
not on or after the date of this Agreement enter into any agreement with
respect to their securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions
hereof. The Company and the Trust have not previously entered into any
agreement granting any registration rights with respect to their securities
to any Person. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Trust's and the Company's securities under any agreement in
effect on the date hereof.
(c) ADJUSTMENTS AFFECTING THE SECURITIES. The Company and the
Trust will not take any action, or permit any change to occur, with respect
to the Securities that would materially and adversely affect the ability of
the Holders to Consummate any Exchange Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless the Company
and the Trust have obtained the written consent of Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
Securities are being tendered pursuant to the Exchange Offer and that does
not affect directly or indirectly the rights of other Holders whose
Securities are not being tendered pursuant to such Exchange Offer may be
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-
class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
18
(i) if to a Holder, at the address set forth on the records
of the Property Trustee maintained pursuant to the Declaration; and
(ii) if to the Company and the Trust, at the address of the
Trust set forth in the Declaration.
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 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 Declaration.
(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 Transfer Restricted Securities; PROVIDED,
HOWEVER, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder.
(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 BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICTS OF LAW RULES THEREOF.
(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) ENTIRE AGREEMENT. This Agreement together with the other
transaction documents is intended by the parties as a final expression of
their agreement and 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 and
the Trust with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
(l) REQUIRED CONSENTS. Whenever the consent or approval of
Holders of a specified percentage of Transfer Restricted Securities is
required hereunder, Transfer Restricted Securities held by the Company 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMMERCE SECURITY BANCORP, INC.
By:_____________________________________
Name:
Title:
CSBI CAPITAL TRUST I
By:_____________________________________
Name:
Title: Regular Trustee
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first
above written
XXXXXX BROTHERS INC.
By:_____________________________
Name:
Title:
