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EXHIBIT 10.19
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REGISTRATION RIGHTS AGREEMENT
Dated as of August 2, 1996
relating to up to
2,875,000 shares of $ 3.50 Series II
Convertible Preferred Securities
by and among
PennCorp Financial Group, Inc.
and
Xxxxx Xxxxxx Inc.,
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
and
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
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This Registration Rights Agreement (this "Agreement") is made
and entered into as of August 2, 1996 by and between PennCorp Financial Group,
Inc., a Delaware corporation (the "Company"), and Xxxxx Xxxxxx Inc., Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated and (the "Initial Purchasers"), who will purchase 2,500,000
shares (the "Firm Shares") of $3.50 Series II Convertible Preferred Securities
with a liquidation preference of $50.00 per shares (the "Preferred Stock") of
the Company pursuant to the Purchase Agreement dated August 2, 1996 (the
"Purchase Agreement") between the Company and the Initial Purchasers. The
Initial Purchasers may also purchase, upon the terms and conditions set forth
in the Purchase Agreement, up to an additional 375,000 shares (the "Additional
Shares") of Preferred Stock. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares." In order to induce the
Initial Purchasers to enter into the Purchase Agreement, the Company has agreed
to provide the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in the Purchase Agreement. All defined terms used but not
defined herein shall have the meanings ascribed to them in the Purchase
Agreement (as defined herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Closing Date: The date on which the Shares are first sold by
the Company to the Initial Purchasers pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Common Stock: The Common Stock, par value $.01 per share, of
the Company.
Damages Payment Date: With respect to the Shares or the
Common Stock, as applicable, each Dividend Payment Date.
Dividend Payment Date: The record date for each dividend
payment with respect to the Shares or the Common Stock, as applicable, fixed by
the Board of Directors.
Effectiveness Date: The date on which the Shelf Registration
Statement is declared effective by the Commission under the Act.
Effectiveness Target Date: As defined in Section 4.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Exempt Resales: Offers and sales of the Shares purchased by
the Purchasers pursuant to the Purchase Agreement on the terms and in the
manner set forth in the Offering Memorandum and Section 2 of the Underwriting
Agreement (i) to persons whom the Initial Purchasers reasonably believe to be
qualified institutional buyers as defined under Rule 144A under the Act, as
such rule may be amended from time to time ("Rule 144A"), in transactions under
Rule 144A, (ii) to a limited number of "accredited investors" (as defined in
Rule 501(a)(1), (2), (3), or (7) under the Act that are institutional investors
and (iii) to certain persons in offshore transactions in reliance upon
Regulation S under the Act.
Holders: As defined in Section 2(b) hereof.
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Latest Issuance Date: The latest date on which any of the
Shares are originally issued by the Company pursuant to the terms of the
Purchase Agreement.
NASD: The National Association of Securities Dealers, Inc.
Offering Memorandum: The Offering Memorandum, dated August 2,
1996, and all supplements thereto, relating to the Shares and prepared by the
Company pursuant to the Purchase Agreement.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Preliminary Prospectus: As defined in Section 3(f).
Prospectus: The prospectus included in the Shelf Registration
Statement, as amended or supplemented by any Prospectus Supplement with respect
to the terms of the offering of any portion of the Transfer Restricted
Securities (as defined herein) covered by the Shelf Registration Statement and
by all other amendments and supplements to such prospectus, including any
prospectus included in any post-effective amendments to the Shelf Registration
Statement, and all material which may be incorporated by reference into such
prospectus.
Prospectus Supplement: As defined in Section 5(b).
Record Holder: (i) With respect to any Damages Payment Date
relating to the Shares constituting Transfer Restricted Securities, each Person
who is registered on the books of the Transfer Agent as the holder of Shares on
the record date with respect to the Dividend Payment Date on which such Damages
Payment Date shall occur and (ii) with respect to any Damages Payment Date
relating to the Common Stock constituting Transfer Restricted Securities, each
Person who is a holder of record of such Common Stock on the record date with
respect to the Dividend Payment Date on which such Damages Payment Date shall
occur.
Registration Expenses: As defined in Section 6(a).
Shares: The Firm Shares and the Additional Shares,
collectively.
Shelf Registration Statement: As defined in Section 3(a)
hereof.
Suspension Period: As defined in Section 3(a).
Transfer Restricted Securities: Each Share and share of
Common Stock of the Company issuable upon conversion of a Share, until each
such Share or share (i) has been effectively registered under the Securities
Act and disposed of in accordance with the Shelf Registration Statement
covering it, (ii) is distributed to the public pursuant to Rule 144 or (iii)
sold or transferred pursuant to Rule 144(k) (or any similar provisions then in
force) under the Securities Act or otherwise.
Underwriter: Any underwriter, placement agent, selling
broker, dealer manager, qualified independent underwriter or similar securities
industry professional.
Underwritten Registration or Underwritten Offering: An
offering in which securities of the Company are sold to an Underwriter or with
the assistance of such Underwriter for reoffering to the public on a firm
commitment basis.
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SECTION 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 owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) The Company shall cause to be filed with the Commission
on or prior to 60 days after the Closing Date, a shelf registration statement
pursuant to Rule 415 under the Act (as may then be amended) (the "Shelf
Registration Statement") on Form S-1 or Form S-3, if the use of such form is
then available and as determined by the Company, to cover resales of Transfer
Restricted Securities by the Holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement. The Holders of such Transfer Restricted Securities
shall have provided the representations required pursuant to Section 3(f)
hereof. The Company shall use its commercially reasonable efforts to cause
such Shelf Registration Statement to be declared effective by the Commission on
or prior to 150 days after the Closing Date. The Company shall use its
commercially reasonable efforts to keep such Shelf Registration Statement
continuously effective for a period ending three years from the effective date
thereof or such shorter period that will terminate when each of the Transfer
Restricted Securities covered by the Shelf Registration Statement shall cease
to be a Transfer Restricted Security. The Company further agrees to use its
commercially reasonable efforts to cause the Shelf Registration Statement to be
effective and usable for resale of the Transfer Restricted Securities during
the period that such Shelf Registration Statement is required to be effective
and usable.
Subject to the immediately following paragraph, upon the
occurrence of any event that would cause the Shelf Registration Statement (i)
to contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made or (ii)
to be not effective and usable for resale of Transfer Restricted Securities
during the period that such Shelf Registration Statement is required to be
effective and usable, the Company shall as promptly as practicable file an
amendment to the Shelf Registration Statement, in the case of clause (i),
correcting any such misstatement or omission, and in the case of either clause
(i) or (ii), use its commercially reasonable efforts to cause such amendment to
be declared effective and such Shelf Registration Statement to become usable as
soon as practicable thereafter.
Notwithstanding anything to the contrary in this Section 3,
subject to compliance with Sections 4 and 5(b), if applicable, the Company may
prohibit offers and sales of Transfer Restricted Securities pursuant to the
Shelf Registration Statement at any time if (A) (i) it is in possession of
material non-public information, (ii) the Board of Directors of the Company
determines (based on advice of counsel) that such prohibition is necessary in
order to avoid a requirement to disclose such material non-public information
and (iii) 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 its shareholders or (B) the Company has made a
public announcement relating to an acquisition or business combination
transaction including the Company and/or one or more of its subsidiaries (i)
that is material to the Company and its subsidiaries taken as a whole and (ii)
the Board of Directors of the Company determines in good faith that offers and
sales of Transfer Restricted Securities pursuant to the Shelf Registration
Statement prior to the consummation of such transaction (or such earlier date
as the Board of Directors shall determine) is not in the best interests of the
Company and its shareholders or that it would be impracticable at the time to
obtain any financial statements relating to such acquisition or business
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combination transaction that would be required to be set forth in the Shelf
Registration Statement (the period during which any such prohibition of offers
and sales of Transfer Restricted Securities pursuant to the Shelf Registration
Statement is in effect pursuant to clause (A) or (B) of this subparagraph (a)
is referred to herein as a "Suspension Period"). A Suspension Period shall
commence on and include the date on which the Company provides written notice
to Holders of Transfer Restricted Securities covered by the Shelf Registration
Statement that offers and sales of Transfer Restricted Securities cannot be
made thereunder in accordance with this Section 3 and shall end on the date on
which each Holder of Transfer Restricted Securities covered by the Shelf
Registration Statement either receives copies of a Prospectus Supplement
contemplated by Section 5(b) or is advised in writing by the Company that
offers and sales of Transfer Restricted Securities pursuant to the Shelf
Registration Statement and use of the Prospectus may be resumed; provided,
however, that the Suspension Period shall in no event be longer than 60 days in
the aggregate in any of the one-year periods ending on the first, second or
third anniversaries of the Closing Date, or longer than 30 days in the
aggregate in any calendar quarter within any one-year period.
(b) None of the Company nor any of its security holders
(other than the Holders of Transfer Restricted Securities in such capacity and
other shareholders having registration rights permitting them to participate
therein, as disclosed in the Offering Memorandum) shall have the right to
include any of the Company's securities in the Shelf Registration Statement.
(c) If the Holders of a majority of the Transfer
Restricted Securities outstanding as of the Closing Date so elect (with holders
of Common Stock constituting Transfer Restricted Securities being deemed to be
Holders of the number of Shares converted by them into such Common Stock for
purposes of such calculation), an offering of Transfer Restricted Securities
pursuant to the Shelf Registration Statement may be effected in the form of an
Underwritten Offering; provided, however, that notwithstanding anything
contained in this Agreement to the contrary, the Company shall not be required
to undertake more than one such Underwritten Offering during any consecutive
12-month period. The Holders of the Transfer Restricted Securities to be
registered shall pay all underwriting discounts and commissions of such
Underwriters and the fees and expenses of any counsel for the Holders.
(d) If any of the Transfer Restricted Securities covered
by the Shelf Registration Statement are to be sold in an Underwritten Offering,
the Underwriter(s) that will administer the offering will be selected by the
Company and shall be a nationally recognized investment bank(s) reasonably
satisfactory to the Holders of a majority of the outstanding Transfer
Restricted Securities (with holders of Common Stock constituting Transfer
Restricted Securities being deemed to be Holders of the number of Shares
converted by them into such Common Stock for purposes of such calculation);
provided, however, that such Underwriter(s) shall be reasonably satisfactory to
the Company.
(e) No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless such Holder furnishes to the
Company in writing, within 10 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus (a "Preliminary Prospectus") included therein, including the
identity of the beneficial owner for whom any Holder may be acting as nominee.
SECTION 4. LIQUIDATED DAMAGES
(a) If (i) the Shelf Registration Statement is not filed
with the Commission on or prior to 60 days after the Closing Date, (ii) the
Shelf Registration Statement has not been declared effective by the Commission
within 150 days after the Closing Date (the "Effectiveness Target Date"), or
(iii) the Shelf Registration Statement is filed and declared effective but
shall thereafter cease to be effective (without being succeeded immediately by
an additional registration statement filed and declared effective) or usable
for resale for a period of time (including any Suspension Period) which shall
exceed 60 days in the
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aggregate in any of the one-year periods ending on the first, second or third
anniversaries of the Closing Date, or which shall exceed 30 days in the
aggregate in any calendar quarter within any of such one-year periods (each
such event referred to in clauses (i) through (iii), a "Registration Default"),
the Company will pay liquidated damages to each Holder of Transfer Restricted
Securities who has complied with such Holder's obligations under this
Agreement. The amount of liquidated damages payable during any period during
which a Registration Default shall have occurred and be continuing is that
amount which is equal to $0.05 per week per $1,000.00 in liquidation preference
of Preferred Stock, or $0.05 per week per 28.6533 shares of Common Stock
(subject to adjustment in the event of stock splits, stock recombinations,
stock dividends and the like) constituting Transfer Restricted Securities, for
each 90 day period or part thereof until the applicable registration statement
covering such Transfer Restricted Securities is filed and the applicable
registration statement is declared effective, or the Shelf Registration
Statement again becomes effective or usable, as the case may be, up to a
maximum amount of liquidated damages of $0.50 per week per $1,000.00 in
liquidation preference of Preferred Stock or $0.50 per week per 28.6533 shares
of Common Stock (subject to adjustment as set forth above) constituting
Transfer Restricted Securities. All accrued liquidated damages shall be paid
to Record Holders by wire transfer of immediately available funds or by federal
funds check by the Company on the next succeeding Damages Payment Date.
Following the cure of a Registration Default, liquidated damages will cease to
accrue with respect to such Registration Default.
All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted
Security shall cease at the time such security ceases to be a Transfer
Restricted Security.
The parties hereto agree that the liquidated damages provided
in this Section 4 constitute a reasonable estimate of the damages that will be
incurred by Holders of Transfer Restricted Securities by reason of the failure
of the Shelf Registration Statement to be filed, declared effective or to
remain effective, as the case may be.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the
Company will use its 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 or
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible after the Closing Date:
(a) on or prior to the date 60 days after the Closing
Date, prepare and file with the Commission a Shelf Registration Statement
relating to the registration on Form S-1 or Form S-3, if the use of such form
is then available and as determined by the Company, for the sale of the
Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof and shall include all financial statements
required to be included or incorporated by reference therein; cooperate and
assist in any filings required to be made with the NASD and use its
commercially reasonable efforts to cause such Shelf Registration Statement to
become effective and approved by such governmental agencies or authorities as
may be necessary to enable the selling Holders to consummate the disposition of
such Transfer Restricted Securities in the manner specified in the Shelf
Registration Statement; provided, however, that before filing a Shelf
Registration Statement or any Prospectus, or any amendments or supplements
thereto, the Company will furnish to the Initial Purchasers and the
Underwriter(s), if any, copies of all such documents proposed to be filed
(except that the Company shall not be required to furnish any exhibits to such
documents including those incorporated by reference, unless so requested by an
Intitial Purchaser or Underwriter in writing), and the Company will not file
any Shelf Registration Statement or amendment thereto or any Prospectus or any
supplement thereto to which (i) the Underwriter(s), if any, shall reasonably
object or (ii) if there are no Underwriters, the Holders of a majority of the
outstanding Transfer Restricted Securities shall reasonably object (with
holders of Common Stock constituting Transfer
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Restricted Securities being deemed to be Holders of the number of Shares
converted by them into such Common Stock for purposes of such calculation), in
each such case within five business days after the receipt thereof by the
Underwriter(s) or Initial Purchaser(s). A Holder or Underwriter, if any, shall
be deemed to have reasonably objected to such filing if the Shelf Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to
be filed contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading which misstatement or omission is specifically
identified to the Company in writing within such five business days;
(b) prepare and file with the Commission such amendments
and post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective for the applicable
period set forth in Section 3(a) hereof; cause the Prospectus to be
supplemented by any required supplement thereto (a "Prospectus Supplement"),
and as so supplemented to be filed pursuant to Rule 424(b) under the Act, and
to comply fully with the applicable provisions of Rules 424(b) under the Act in
a timely manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Shelf Registration
Statement, Prospectus or Prospectus Supplement;
(c) if requested by the Holders of Transfer Restricted
Securities, or, if the Transfer Restricted Securities are being sold in an
Underwritten Offering, the Underwriter(s) of such Underwritten Offering,
promptly incorporate in the Prospectus, any Prospectus Supplement or
post-effective amendment to the Shelf Registration Statement such information
as the Underwriters and/or the Holders of Transfer Restricted Securities being
sold agree should be included therein relating to the plan of distribution of
the Transfer Restricted Securities, including, without limitation, information
with respect to the number of Shares and/or the number of shares of Common
Stock being sold by the Holders, the purchase price being paid therefor and any
other terms with respect to the offering of the Transfer Restricted Securities
to be sold in such offering; and make all required filings of such Prospectus,
Prospectus Supplement or post-effective amendment as soon as practicable after
the Company is notified of the matters to be incorporated in such Prospectus,
Prospectus Supplement or post-effective amendment;
(d) advise the Underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, confirm such advice in
writing, (i) when the Prospectus or any Prospectus Supplement or post-effective
amendment to the Shelf Registration Statement has been filed, and, with respect
to the Shelf Registration Statement or any post-effective amendment thereto,
when the same has become effective, (ii) of any request by the Commission for
an amendment of or supplement to the Shelf Registration Statement, any
Preliminary Prospectus, or the Prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or of the suspension of
qualification of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iv) if at
any time the representations and warranties of the Company contemplated by
paragraph (m)(i) below cease to be true and correct in all material respects,
and (v) or of the happening of any event, including the filing of any
information, documents or reports pursuant to the Exchange Act, that makes any
statement made in the Shelf Registration Statement or the Prospectus (as then
amended or supplemented) untrue or which requires the making of any additions
to or changes in the Registration Statement or the Prospectus (as then amended
or supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Shelf 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 Company shall use its
commercially reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
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(e) promptly following the filing of any document that is
to be incorporated by reference into the Shelf Registration Statement or the
Prospectus subsequent to the initial filing of the Shelf Registration
Statement, provide copies of such document (excluding exhibits, unless
requested by a Holder in writing) to the Holders;
(f) furnish to each Holder and each of the
Underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein
and all exhibits (excluding exhibits to documents incorporated by reference
therein unless requested by such Holder or Underwriter);
(g) deliver to each selling Holder and each of the
Underwriter(s), if any, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto as such
Persons may reasonably request; the Company consents to the use of any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto by each of the selling Holders and each of the Underwriter(s), if any,
in connection with the public offering and the sale of the Transfer Restricted
Securities covered by any Preliminary Prospectus and the Prospectus or any
amendments or supplements thereto in the manner specified therein;
(h) 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 jurisdiction of the Transfer Restricted
Securities in the manner specified in the Shelf Registration Statement;
provided, however, that the Company shall not be required (i) to register or
qualify as a foreign corporation where it is not now so qualified or (ii) to
take any action that would subject it to the service of process in suits, other
than as to matters and transactions relating to the Shelf Registration
Statement, in any jurisdiction where it is not now so subject;
(i) 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;
(j) use its commercially reasonable efforts to cause the
Transfer Restricted Securities covered by the Shelf Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be reasonably necessary to enable the seller or sellers
thereof or the Underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities, subject to the provisos contained in clause (h)
above;
(k) if any fact or event contemplated by clause (d)(v)
above shall exist or have occurred, prepare a post-effective amendment or
supplement to the Shelf 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 Prospectus 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, in light of the circumstances under which they are
made;
(l) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Shelf Registration
Statement and provide the transfer agent for the Common Stock with printed
certificates for the Transfer Restricted Securities which are in a form
eligible for deposit with The Depository Trust Company;
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(m) enter into such agreements (including an underwriting
agreement reasonably acceptable to the Company) and take all such other actions
in connection therewith as may reasonably be required in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant to
the Shelf Registration Agreement, in connection with an Underwritten
Registration, and (i) make such representations and warranties to the Holders
and the Underwriter(s), in form, substance and scope as they may reasonably
request and as are customarily made by issuers to Underwriters in primary
Underwritten Offerings and covering matters, including, but not limited to,
those set forth in the Purchase Agreement; (ii) obtain opinions of counsel for
the Company and updates thereof in customary form and covering matters
reasonably requested by the Underwriter(s) of the type customarily covered in
legal opinions to Underwriters in connection with primary Underwritten
Offerings addressed to the Underwriter requesting the same and covering the
matters as may be reasonably requested by such Holders and Underwriters; (iii)
obtain "cold comfort" letters and updates thereof from the Company's
independent certified public accountants, and the independent certified public
accountants of any other corporation or person ("Other Companies") with respect
to which audited financial statements are required to be included or
incorporated by reference in the Shelf Registration Statement, addressed to the
Underwriters requesting the same, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters to
Underwriters in connection with primary Underwritten Offerings; and (iv)
deliver such documents and certificates as may be reasonably requested by the
Holders of the Transfer Restricted Securities being sold or the Underwriter(s)
of such Underwritten Offering to evidence compliance with clause (i) above and
with any customary conditions contained in the underwriting agreement entered
into by the Company pursuant to this clause (m). The above shall be done at or
prior to each closing under such underwriting agreement, as and to the extent
required thereunder;
(n) make available at reasonable times and in a
reasonable manner for inspection by a representative of the Holders of the
Transfer Restricted Securities, any Underwriter participating in any
disposition pursuant to such Shelf Registration Statement and any attorney or
accountant retained by such selling Holders or any of the Underwriters all
relevant financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Holder,
Underwriter, attorney or accountant in connection with such Shelf Registration
Statement prior to its effectiveness; provided, however, that such
representatives, attorneys or accountants shall agree to keep confidential
(which agreement shall be confirmed in writing in advance to the Company if the
Company shall so request) all information, records or documents made available
to such persons which are not otherwise available to the general public unless
disclosure of such records, information or documents is required by court or
administrative order (of which the Company shall have been given prior notice
and an opportunity to defend) after the exhaustion of all appeals therefrom,
and to use such information obtained pursuant to this provision only in
connection with the transaction for which such information was obtained, and
not for any other purpose;
(o) otherwise use its 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, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act, for the twelve-month period
(i) commencing at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to Underwriters in a firm commitment Underwritten Offering
or (ii) 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 Shelf Registration Statement;
(p) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the Shelf Registration
Statement at the earliest practicable time;
(q) cause all Common Stock issuable upon conversion of
the Preferred Stock to be accepted for listing, subject to official notice of
issuance, on each securities exchange or quotation system on which similar
securities issued by the Company are then listed; and
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(r) 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).
Each Holder whose securities are covered by any Shelf
Registration Statement agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not materially misleading or
necessary to cause such Shelf Registration Statement not to omit a material
fact with respect to such Holder necessary in order to make the statements
therein not misleading.
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence
of any fact of the kind described in Section 5(d)(v) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings with respect to the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the time period regarding the
effectiveness of the Shelf Registration Statement set forth in Section 3(a)
hereof 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 5(d)(v)
hereof to and including the date when each selling Holder covered by such Shelf
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof or shall have received
the Advice.
SECTION 6. REGISTRATION EXPENSES
(a) Except as set forth in Section 6(b) hereof, all
expenses incident to the Company's performance of or compliance with this
Agreement (the "Registration Expenses") will be borne by the Company,
regardless of whether a Shelf Registration Statement becomes effective,
including without limitation:
(i) all registration and filing fees and expenses
(including filings made with the NASD);
(ii) reasonable fees and expenses of compliance with federal
securities or state blue sky laws;
(iii) expenses of printing (including, without limitation,
expenses of printing or engraving certificates for the Transfer
Restricted Securities in a form eligible for deposit with Depository
Trust Company and of printing the Prospectus and any Preliminary
Prospectus), messenger and delivery services and telephone;
(iv) fees and disbursements of counsel for the Company;
(v) fees and disbursements of all independent certified
public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incidental to
the preparation and filing of a Shelf Registration Statement and
Prospectus and the disposition of Transfer Restricted Securities); and
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(vi) fees and expenses of listing the Transfer Restricted
Securities on any securities exchange or quotation system in
accordance with Section 5(r) hereof.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, rating agency fees and the fees and expenses of any Person, including
special experts, retained by the Company.
(b) The Holders of Transfer Restricted Securities shall
bear the expense of any broker's commission or Underwriter's discount or
commission and the fees and expenses of any counsel for the Holders. In
addition, each Holder of Transfer Restricted Securities shall pay all
Registration Expenses to the extent required by applicable law.
Notwithstanding anything herein to the contrary, the Company shall not be
responsible for fees and expenses of counsel to any Underwriter(s), whether in
connection with the Shelf Registration Statement, NASD matters or otherwise,
except to the extent specifically agreed in any underwriting agreement for an
Underwritten Offering.
SECTION 7. INDEMNIFICATION
(a) (i) The Company agrees to indemnify and hold harmless
(i) each of the Initial Purchasers, (ii) each Holder, and (iii) each person, if
any, who controls any of the Initial Purchasers or any Holder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as a
Non-Company Indemnitee), from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or in the Shelf
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Preliminary Prospectus or the
Prospectus, in light of the circumstances in which such statements were made)
not misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
any Non-Company Indemnitee furnished in writing to the Company by or on behalf
of such Non-Company Indemnitee expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit of
any Non-Company Indemnitee on account of any such loss, claim, damage,
liability or expense arising from the sale of the Transfer Restricted
Securities by such Non-Company Indemnitee to any person, at or prior to the
written confirmation of such sale, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus; provided that the
Company has delivered the Prospectus to such Non-Company Indemnitee in
requisite quantity on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Non-Company Indemnitee, such Non- Company Indemnitee shall promptly
notify the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Non-Company Indemnitee shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Non-Company Indemnitee unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel, or (iii) the named
parties to any such action, suit or proceeding (including any impleaded
parties) include both such Non-Company Indemnitee and the indemnifying parties
and such Non-Company Indemnitee shall have been
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advised by its counsel that representation of such indemnified party and any
indemnifying parties by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
parties shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Non-Company Indemnitee). It is understood,
however, that the indemnifying parties shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Non-Company Indemnitees not having actual or
potential differing interests with you or among themselves, which firm shall be
designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses
shall be reimbursed on a monthly basis. The indemnifying parties shall not be
liable for any settlement of any such action, suit or proceeding effected
without their written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold harmless any
Non-Company Indemnitee, to the extent provided in paragraph (a) hereof, from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Holder agrees to indemnify and hold harmless (i) the
Company, (ii) each of the Initial Purchasers, (iii) each other Holder, (iv) any
person controlling (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Company, the Initial Purchasers and each other Holder
and (v) the respective directors, officers, employees, representatives, and
agents of each of the parties referred to in clauses (i), (ii), (iii) and (iv),
to the same extent as the foregoing indemnity from the Company to each
Non-Company Indemnitee set forth in paragraph (a) hereof, but only with respect
to information relating to such Holder furnished in writing by or on behalf of
such Holder expressly for use in the Registration Statement, the Prospectus or
any Preliminary Prospectus, or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against the Company, any of its
directors, any such officer, or any such controlling person based on the
Registration Statement, the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against any Holder pursuant to this paragraph (c), such Holder shall
have the rights and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof such Holder shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at such Holder's expense), and the Company, its directors, any such
officer, and any such controlling person, shall have the rights and duties
given to the Holders by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Holders may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unenforceable although available by its terms to an indemnified party under
paragraphs (a) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as other relevant equitable considerations. The relative
fault of the indemnifying party, on the one hand, and the indemnified party, 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 indemnifying party, on the one hand, or the indemnified party,
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Company, each of the Initial Purchasers and each
Holder of Transfer Restricted Securities agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by a pro
rata allocation or by any other method of allocation that does not take account
of the
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equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, no Holder shall be required
to contribute any amount in excess of the amount by which the total amount
received by such Holder with respect to the sale of Transfer Restricted
Securities exceeds the sum of (A) the amount paid by such Holder for such
Shares plus (B) the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal amount of
Shares held by each of the Holders hereunder and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified party
on a monthly basis. The indemnity and contribution agreements contained in
this Section 7 and any representations and warranties of the Company set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Initial
Purchaser or any person controlling any Initial Purchaser, any Holder, the
Company, its directors or officers or any person controlling the Company, and
(ii) any termination of this Agreement. A successor to any Initial Purchaser,
or any person controlling any Initial Purchaser, or to any Holder, or to the
Company, its directors or officers, or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any
of the Shares or shares of Common Stock that are Transfer Restricted Securities
remain outstanding and during any such period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, to make available to any
Initial Purchaser or any beneficial owner of the Shares or shares of such
Common Stock in connection with any sale thereof and any prospective purchaser
of such Shares or Common Stock from such Initial Purchaser or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering
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, (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements and (c) furnishes the Company in writing information
in accordance with Section 3(f) and agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
any person controlling the Company within
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the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
extent contemplated by Section 7(c).
SECTION 10. MISCELLANEOUS
(a) Remedies. Each Holder of Transfer Restricted
Securities, in addition to being entitled to exercise all rights provided
herein, and as provided in the Purchase Agreement and granted by law, including
recovery of damages, will be entitled to specific performance of such Holder's
rights under this Agreement. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on
or after the date of this Agreement enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts in any
material respect with the provisions hereof. The rights granted to the Holders
of Transfer Restricted Securities hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
securities under any other agreements.
(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 hereof may not be given unless the Company has obtained the written
consent of Holders of a majority of the outstanding Transfer Restricted
Securities affected by such amendment, modification, supplement, waiver or
departure (with holders of Common Stock constituting Transfer Restricted
Securities being deemed to be Holders of the number of Shares converted by them
into such Common Stock for purposes of such calculation). Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders of Transfer Restricted Securities
whose securities are being sold pursuant to such Shelf Registration Statement
and that does not directly or indirectly affect the rights of other Holders of
Transfer Restricted Securities shall be valid only with the written consent of
Holders of at least 66-2/3% of the Transfer Restricted Securities being sold,
in each case calculated in accordance with the provisions of Section 3(c).
(d) 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:
(i) if to a Holder of Transfer Restricted
Securities, at the address set forth on the records of the Transfer
Agent, with a copy to the Registrar; and
(ii) if to the Company or an Initial Purchaser,
initially at its address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in
accordance with the provisions of this Section.
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.
(e) 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
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a Holder of Transfer Restricted Securities unless and to the extent such
successor or assign acquired Transfer Restricted Securities from such Holder;
and provided, further, that nothing herein shall be deemed to permit any
assignment, transfer or any disposition of Transfer Restricted Securities in
violation of the terms of the Purchase Agreement or applicable law. If any
transferee of any Holder shall acquire Transfer Restricted Securities, in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement and by
taking and holding such Transfer Restricted 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) 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.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) 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.
(i) 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.
(j) Entire Agreement. This Agreement together with the
other Operative Documents (as defined in the Purchase Agreement) 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 with respect to the securities sold pursuant to the Purchase Agreement.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchasers.
Very truly yours,
PENNCORP FINANCIAL GROUP, INC.
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President,
Secretary and General Counsel
Confirmed as of the date first
above mentioned.
XXXXX XXXXXX INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
by: XXXXX XXXXXX INC.
By: /s/ XXXXXXX X.X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X.X. Xxxxxxx
Title: Managing Director
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