EXHIBIT 4.7
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REGISTRATION RIGHTS AGREEMENT
Dated December 23, 1997
among
MMI COMPANIES, INC.
MMI CAPITAL TRUST I
and
SALOMON BROTHERS INC
ABN AMRO CHICAGO CORPORATION
BANCAMERICA XXXXXXXXX XXXXXXXX
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as Initial Purchasers
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of December 23, 1997, among MMI Companies, Inc., a Delaware
corporation (the "Company"), MMI CAPITAL TRUST I, a business trust formed under
the laws of the state of Delaware (the "Trust"), and SALOMON BROTHERS INC
("Salomon"), ABN AMRO CHICAGO CORPORATION, BANCAMERICA XXXXXXXXX XXXXXXXX (each
an "Initial Purchaser" and, collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated
December 18, 1997 (the "Purchase Agreement"), among the Company, as issuer of
the Series A 7 5/8% Junior Subordinated Deferrable Interest Debentures due
December 15, 2027 (the "Subordinated Debentures"), the Trust and the Initial
Purchasers, which provides for, among other things, the sale by the Trust to the
Initial Purchasers of $125,000,000 of the Trust's Series A 7 5/8% Capital
Securities, liquidation amount $1,000 per Capital Security (the "Capital
Securities"), the proceeds of which will be used by the Trust to purchase the
Subordinated Debentures. The Capital Securities, together with the Subordinated
Debentures and the Company's guarantee of the Capital Securities (the "Capital
Securities Guarantee"), are collectively referred to as the "Securities". In
order to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company and the Trust have agreed to provide to the Initial Purchasers and their
direct and indirect transferees the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Additional Distributions" shall have the meaning set forth in Section
2(e) hereof.
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Affiliate" shall have the meaning given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to close.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and
Restated Declaration of Trust of MMI Capital Trust 1, dated as of December 23,
1997, by the trustees named therein and the Company as sponsor.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; provided, however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section
2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Offer" shall mean the offer by the Company and the Trust to
the Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities pursuant
to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Securities" shall mean (i) with respect to the Subordinated
Debentures, the Series B 7 5/8% Junior Subordinated Deferrable Interest
Debentures due December 15, 2027 (the "Exchange Debentures") containing terms
substantially identical to the Subordinated Debentures (except that they will
not contain terms with respect to the transfer restrictions under the Securities
Act, will not require transfers thereof to be in
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minimum blocks of $100,000 aggregate principal amount and will not provide for
any Liquidated Damages thereon), (ii) with respect to the Capital Securities,
the Trust's Series B 7 5/8% Capital Securities, liquidation amount $1,000 per
Capital Security (the "Exchange Capital Securities") which will have terms
substantially identical to the Capital Securities (except they will not contain
terms with respect to transfer restrictions under the Securities Act, will not
require transfers thereof to be in minimum blocks of $100,000 aggregate
liquidation amount and will not provide for any increase in Additional
Distributions thereon) and (iii) with respect to the Capital Securities
Guarantee, the Company's guarantee (the "Exchange Guarantee") of the Exchange
Capital Securities which will have terms substantially identical to the Capital
Securities Guarantee.
"Holder" shall mean each Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Subordinated
Debentures and the Exchange Debentures dated as of December 23, 1997, between
the Company, as issuer, and The Chase Manhattan Bank, as trustee, as the same
may be amended from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
"Issue Date" shall mean the date of original issuance of the
Securities.
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
hereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
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"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including posteffective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
to this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities: provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities or
Private Exchange Securities, as the case may be, shall have been sold or are
eligible to be sold to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act, (iii) such
Securities or Private Exchange Securities, as the case may be, shall have ceased
to be outstanding or (iv) with respect to the Securities, such Securities shall
have been exchanged for Exchange Securities upon consummation of the Exchange
Offer and are thereafter freely tradeable by the holder thereof (other than an
Affiliate of the Company).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Securities in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing
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or assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the Company
and of the independent certified public accountants of the Company, including
the expenses of any "cold comfort" letters required by or incident to such
performance and compliance, (vi) the fees and expenses of the Trustee and its
counsel, and any exchange agent or custodian, (vii) all fees and expenses
incurred in connection with the listing, if any, of any of the Exchange
Securities or the Registrable Securities on any securities exchange or
exchanges, and (viii) the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement.
"Registration Statement" shall mean any registration statement of the
Company and the Trust which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Rule 144(k) Period" shall mean the period of two years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section
2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Trust pursuant to the provisions of Section
2(b) hereof which covers all of the Registrable Securities or all of the Private
Exchange Securities, as the case may be, on an appropriate form under Rule 415
under
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the Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"Trustees" shall mean any and all trustees with respect to (i) the
Capital Securities under the Declaration, (ii) the Subordinated Debentures under
the Indenture and (iii) the Capital Securities Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any applicable
law or applicable interpretation of the staff of the SEC, the Company and the
Trust shall, for the benefit of the Holders, at the Company's cost, use their
best efforts to (i) cause to be filed with the SEC within 150 days after the
Issue Date an Exchange Offer Registration Statement on an appropriate form under
the Securities Act covering the Exchange Offer, (ii) cause such Exchange Offer
Registration Statement to be declared effective under the Securities Act within
180 days after the Issue Date, and (iii) keep such Exchange Offer Registration
Statement effective for not less than 30 calendar days (or longer if required by
applicable law) after the date notice of the Exchange Offer has been mailed to
the Holders. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Trust shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible and
electing to exchange Registrable Securities for a like principal amount of
Exchange Debentures or a like liquidation amount of Exchange Capital Securities,
together with the Exchange Guarantee, as applicable (assuming that such Holder
(i) is not an Affiliate of the Company, (ii) is not a broker-dealer tendering
Registrable Securities acquired directly from the Company or the Trust for its
own account, (iii) acquires the Exchange Securities in the ordinary course of
such Holder's business and (iv) has no arrangements or understandings with any
Person to participate in the Exchange Offer for the purpose of distributing the
Exchange Securities) to transfer such Exchange Securities from and after their
receipt without any limitations or restrictions under the Securities Act and
under state securities or blue sky laws.
In connection with the Exchange Offer, the Company and the Trust
shall:
(i) mail or cause to be mailed to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
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(ii) keep the Exchange Offer open for acceptance for a period of not less
than 30 days after the date notice thereof is mailed to the Holders (or longer
if required by applicable law) (such period referred to herein as the "Exchange
Period");
(iii) utilize the services of the Depositary for the Exchange Offer; (iv)
permit Holders to withdraw tendered Securities at any time prior to the close of
business, New York time, on the last Business Day of the Exchange Period, by
sending to the institution specified in the notice, a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Securities delivered for exchange, and a statement that such Holder is
withdrawing its election to have such Securities exchanged;
(v) notify each Holder that any Security not tendered by such Holder in
the Exchange Offer will remain outstanding and continue to accrue interest or
accumulate distributions, as the case may be, but will not retain any rights
under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws relating to
the Exchange Offer.
If an Initial Purchaser determines upon advice of its counsel that it
is not eligible to participate in the Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment in the
initial distribution, as soon as practicable upon receipt by the Company and the
Trust of a written request from such Initial Purchaser, the Company and the
Trust, as applicable, shall offer to exchange with such Initial Purchaser (the
"Private Exchange") for the Securities held by such Initial Purchaser, a like
liquidation amount of Capital Securities of the Trust or, in the event the Trust
is liquidated and Subordinated Debentures are distributed, a like principal
amount of the Subordinated Debentures of the Company, together with the Exchange
Guarantee, in each case that are identical (except that such securities may bear
a customary legend with respect to restrictions on transfer pursuant to the
Securities Act) to the Exchange Securities (the "Private Exchange Securities")
notwithstanding that they are issued pursuant to the Indenture, the Declaration
or the Guarantee (which provide that the Exchange Securities will not be subject
to the transfer restrictions set forth in the Indenture or the Declaration, as
applicable, and that the Exchange Securities, the Private Exchange Securities
and the Securities will vote and consent together on all matters as one class
and that neither the Exchange Securities, the Private Exchange Securities nor
the Securities will have the right to vote or consent as a separate class on any
matter). The Private Exchange Securities shall be of the same series as the
Exchange Securities and the Company and the Trust will seek to cause the
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CUSIP Service Bureau to issue the same CUSIP Numbers for the Private Exchange
Securities as for the Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and, if
applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof tendered and
not validly withdrawn pursuant to the Exchange Offer or the Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by the
Company; and
(iii) issue, and cause the applicable Trustee under the Indenture, the
Declaration or the Guarantee, as applicable, to promptly authenticate and
deliver to each Holder, new Exchange Securities or Private Exchange Securities,
as applicable, equal in principal amount to the principal amount of the
Subordinated Debentures or equal in liquidation amount to the liquidation amount
of the Capital Securities (together with the guarantee thereof) as are
surrendered by such Holder.
Distributions on each Exchange Capital Security and interest on each
Exchange Debenture and Private Exchange Security issued pursuant to the
Exchange Offer and in the Private Exchange will accrue from the last date on
which a Distribution or interest was paid on the Capital Security or the
Subordinated Debenture surrendered in exchange therefor or, if no Distribution
or interest has been paid on such Capital Security or Subordinated Debenture,
from the Issue Date. To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Company and the Trust shall use
their best efforts to complete the Exchange Offer as provided above, and shall
comply with the applicable requirements of the Securities Act, the Exchange Act
and other applicable laws in connection with the Exchange Offer. Except as
provided herein, the Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the SEC. Each Holder of Registrable
Securities who wishes to exchange such Registrable Securities for Exchange
Securities in the Exchange Offer will be required to make certain customary
representations in connection therewith, including, in the case of any Holder
of Capital Securities, representations that (i) it is not an Affiliate of the
Trust or the Company, (ii) the Exchange Securities to be received by it were
acquired in the ordinary course of its business and (iii) at the time of the
Exchange Offer, it has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Capital
Securities. The Company and the Trust shall inform the Initial Purchasers,
after consultation with the applicable
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Trustees, of the names and addresses of the Holders to whom the Exchange Offer
is made, and each Initial Purchaser shall have the right to contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating Broker-
Dealers, and the Company and the Trust shall have no further obligation to
register the Registrable Securities (other than Private Exchange Securities)
pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. If prior to the expiration of the Exchange
Offer: (i) the Company, the Trust or the Majority Holders reasonably determine,
after conferring with counsel (which may be in-house counsel), that the Exchange
Offer Registration provided in Section 2(a) above is not available under
applicable law and regulations and currently prevailing interpretations of the
staff of the SEC, (ii) the Company shall determine in good faith that there is a
reasonable likelihood that, or a material uncertainty exists as to whether,
consummation of the Exchange Offer would result in interest payable by the
Company on the Subordinated Debentures not being deductible by the Company for
United States federal income tax purposes, (iii) the Exchange Offer Registration
Statement is not declared effective within 180 days after the Issue Date or (iv)
upon the request of any Initial Purchaser with respect to any Registrable
Securities held by it, if, in the reasonable opinion of Xxxxxxx Xxxx & Xxxxxxxxx
or other counsel experienced in such matters, such Initial Purchaser is not
permitted pursuant to applicable law or applicable interpretations of the staff
of the SEC, to participate in the Exchange Offer and thereby receive securities
that are freely tradeable without restriction under the Securities Act and
applicable blue sky or state securities laws (any of the events specified in
(i)-(iv) being a "Shelf Registration Event" and the date of occurrence thereof,
the "Shelf Registration Event Date"), then in addition to or in lieu of
effecting the registration of the Exchange Securities pursuant to the Exchange
Offer Registration Statement, the Administrative Trustees (as defined in the
Declaration) on behalf of the Trust will (x) promptly deliver to the Holders and
the Delaware Trustee (as defined in the Declaration) written notice thereof and
(y) at the Company's sole expense: (a) as soon as practicable after such Shelf
Registration Event Date, and, in any event, within 30 days after such Shelf
Registration Event Date (but shall not be required to do so earlier than 75 days
after the Closing Time), file a Shelf Registration Statement providing for the
sale by the Holders of all of the Registrable Securities, and (b) shall use
their best efforts to have such Shelf Registration Statement declared effective
by the SEC as soon as practicable. No Holder of Registrable Securities shall be
entitled to include any of its Registrable Securities in any Shelf Registration
pursuant to this Agreement unless and until such Holder agrees in
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writing to be bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company and the Trust in writing, within 15
days after receipt of a request therefor, such information as the Company and
the Trust may, after conferring with counsel with regard to information relating
to Holders that would be required by the SEC to be included in such Shelf
Registration Statement or Prospectus included therein, reasonably request for
inclusion in any Shelf Registration Statement or Prospectus included therein.
Each Holder as to which any Shelf Registration is being effected agrees to
furnish to the Company and the Trust all information with respect to such Holder
necessary to make the information previously furnished to the Company by such
Holder not materially misleading.
The Company and the Trust agree to use their best efforts to keep the
Shelf Registration Statement continuously effective and usable for resales for
(a) the Rule 144(k) Period in the case of a Shelf Registration Statement filed
pursuant to Section 2(b)(i), (ii) or (iii) or (b) 180 days in the case of a
Shelf Registration Statement filed pursuant to Section 2(b)(iv) (subject in each
case to extension pursuant to the last paragraph of Section 3 hereof), or for
such shorter period which will terminate when all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding (the "Effectiveness Period").
The Company and the Trust shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration. The Company and the Trust
will, in the event a Shelf Registration Statement is declared effective, provide
to each Holder a reasonable number of copies of the Prospectus which is a part
of the Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and take certain other actions as are required
to permit certain unrestricted resales of the Registrable Securities. The
Company and the Trust further agree, if necessary, to supplement or amend the
Shelf Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registrations, and the Company and the Trust
agree to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company, as issuer of the Subordinated Debentures,
shall pay all Registration Expenses in connection with the registration pursuant
to Section 2(a) and/or 2(b) hereof and will reimburse the Initial Purchasers for
the reasonable fees and disbursements of Xxxxxxx Xxxx & Xxxxxxxxx, counsel for
the Initial Purchasers, incurred in connection with the Exchange Offer and, if
applicable, the Private Exchange, and either Xxxxxxx Xxxx & Xxxxxxxxx or any one
other counsel designated in writing by the Majority Holders to act as counsel
for the Holders of the Registrable Securities in connection with a
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Shelf Registration Statement, which other counsel shall be reasonably
satisfactory to the Company. Except as provided herein, each Holder shall pay
all expenses of its counsel, underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Securities
pursuant to such Exchange Offer Registration Statement or Shelf Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. The Company and the
Trust will be deemed not to have used their best efforts to cause the Exchange
Offer Registration Statement or the Shelf Registration Statement, as the case
may be, to become, or to remain, effective during the requisite period if either
of them voluntarily take any action that would result in any such Registration
Statement not being declared effective or that would result in the Holders of
Registrable Securities covered thereby not being able to exchange or offer and
sell such Registrable Securities during that period unless such action is
required by applicable law interpretations of the SEC staff
(e) Liquidated Damages. If:
(i) neither the Exchange Offer Registration Statement is filed with the
SEC on or prior to the 150th day after the Issue Date nor a Shelf Registration
Statement is filed with the SEC on or prior to the 45th day after the Shelf
Registration Event Date in respect of a Shelf Registration Event attributable to
any of the events set forth in Sections 2(b)(i), (ii) and (iii) then commencing
on the day after the applicable required filing date, liquidated damages
("Liquidated Damages") shall accrue on the principal amount of the Subordinated
Debentures, and additional distributions ("Additional Distributions") shall
accumulate on the liquidation amount of the Trust Securities (as such term is
defined in the Declaration), each at a rate of 0.25% per annum; or
(ii) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the 180th
day after the Issue Date (in the case of an Exchange Offer Registration
Statement) or on or prior to the later of (A) the 45th day after the date such
Shelf Registration Statement was required to be filed and (B) the 180th day
after the Issue Date (in the case of a Shelf Registration Statement, in respect
of a Shelf Registration Event attributable to any of the
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events set forth in Sections 2(b)(i), (ii) and (iii)), then, commencing on the
181st day after the Issue Date (in the case of an Exchange Offer Registration
Statement) or the later of (A) the 46th day after the day such Shelf
Registration Statement was required to be filed and (B) the 181st day after the
Issue Date (in the case of a Shelf Registration Statement in respect of a Shelf
Registration Event attributable to any of the events set forth in Sections
2(b)(i), (ii) and (iii)), Liquidated Damages shall accrue on the principal
amount of the Subordinated Debentures, and Additional Distributions shall
accumulate on the liquidation amount of the Trust Securities, each at a rate of
0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital Securities for all
Capital Securities validly tendered or the Company has not exchanged Exchange
Guarantees or Exchange Subordinated Debentures for all Capital Securities
Guarantees or Subordinated Debentures, as the case may be, validly tendered, in
accordance with the terms of the Exchange Offer on or prior to the 45th day
after the date on which the Exchange Offer Registration Statement was declared
effective or (B) if applicable, the Shelf Registration Statement in respect of a
Shelf Registration Event attributable to any of the events set forth in Sections
2(b)(i), (ii) and (iii) has been declared effective and such Shelf Registration
Statement ceases to be effective or available to a Holder of Registrable
Securities for use in connection with the sale of such Registrable Securities
(whether as a result of an event contemplated by Section 3(e) or otherwise) at
any time prior to the expiration of the Rule 144(k) Period (other than after
such time as all Securities have been disposed of thereunder or otherwise cease
to be Registrable Securities) and continues to be so unavailable for a period
exceeding 30 consecutive days or an aggregate of 90 days (whether or not
consecutive) in any 360 day period, then Liquidated Damages shall accrue on the
principal amount of Subordinated Debentures, and Additional Distributions shall
accumulate on the liquidation amount of the Trust Securities, each at a rate of
0.25% per annum commencing on (x) the 46th day after such effective date, in the
case of (A) above, or (y) the 31st consecutive day or the 91st day in any 360
day period after the day such Shelf Registration Statement ceases to be
effective or available in the case of (B) above;
provided, however, that neither the Liquidated Damages rate on the Subordinated
Debentures, nor the Additional Distribution rate on the liquidation amount of
the Trust Securities, may exceed in the aggregate 0.25% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, Exchange Guarantees and Exchange
Debentures for all Capital Securities, Guarantees and Subordinated Debentures
tendered (in the case of clause (iii)(A) above), or at such time
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as the Shelf Registration Statement which had ceased to remain effective or
available for use again becomes effective and available for use (in the case of
clause (iii)(B) above), Liquidated Damages on the principal amount of the
Subordinated Debentures and Additional Distributions on the liquidation amount
of the Trust Securities as a result of such clause (or the relevant subclause
thereof) shall cease to accrue and accumulate.
Any amounts of Liquidated Damages and Additional Distributions due pursuant
to Section 2(e)(i), (ii) or (iii) above will be payable in cash on the next
succeeding June 15 and December 15, as the case may be, to Holders on the
relevant record dates for the payment of interest and distributions pursuant to
the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies available to the
Holders, the Company and the Trust acknowledge that any failure by the Company
or the Trust to comply with its obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Holders for which there
is no adequate remedy at law, that it would not be possible to measure damages
for such injuries precisely and that, in the event of any such failure, any
Holder may obtain such relief as may be required to specifically enforce the
Company's and the Trust's obligations under Section 2(a) and Section 2(b)
hereof.
3. Registration Procedures. In connection with the obligations of the
Company and the Trust with respect to the Registration Statements pursuant to
Sections 2(a) and 2(b) hereof, the Company and the Trust shall use their best
efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be selected
by the Company and the Trust, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by
the selling Holders thereof and, in the case of an Exchange Offer, be
available for the exchange of Registrable Securities, and (iii) shall
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to
be filed therewith or incorporated therein by reference, if applicable; and
use its best efforts to cause such Registration Statement to become
effective and remain effective (and, in the case of a Shelf Registration
Statement, available for use) in accordance with Section 2 hereof;
provided, however, that if (1) such filing is pursuant to Section 2(b), or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities, before filing any Registration Statement
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or Prospectus or any amendments or supplements thereto, the Company and the
Trust shall furnish to and afford the Holders of the Registrable Securities
and each such Participating Broker-Dealer, as the case may be, covered by
such Registration Statement, their counsel and the managing underwriters,
if any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference therein
and all exhibits thereto) proposed to be filed. The Company and the Trust
shall not file any Registration Statement or Prospectus or any amendments
or supplements thereto in respect of which the Holders must be afforded an
opportunity to review prior to the filing of such document if the Majority
Holders or such Participating Broker-Dealer, as the case may be, their
counsel or the managing underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the Effectiveness Period or the
Applicable Period, as the case may be; and cause each Prospectus to be
supplemented, if so determined by the Company or the Trust or requested by
the SEC, by any required prospectus supplement and as so supplemented to be
filed pursuant to Rule 424 (or any similar provision then in force) under
the Securities Act, and comply with the provisions of the Securities Act,
the Exchange Act and the rules and regulations promulgated thereunder
applicable to it with respect to the disposition of all securities covered
by each Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof described
in this Agreement (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities included in the Shelf Registration Statement, at
least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Securities is being filed and
advising such Holder that the distribution of Registrable Securities will
be made in accordance with the method selected by the Majority Holders; and
(ii) furnish to each Holder of Registrable Securities included in the Shelf
Registration Statement and to each underwriter of an underwritten offering
of Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter
may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) consent to the use of
the Prospectus or any amendment or supplement
-14-
thereto by each of the selling Holders of Registrable Securities included
in the Shelf Registration Statement in connection with the offering and
sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
(d) in the case of a Shelf Registration, register or qualify where
required the Registrable Securities under all applicable state securities
or "blue sky" laws of such jurisdictions by the time the applicable
Registration Statement is declared effective by the SEC as any Holder of
Registrable Securities covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Securities shall
reasonably request in writing in advance of such date of effectiveness, and
do any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Registrable Securities owned
by such Holder; provided, however, that the Company and the Trust shall not
be required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (ii) file any general consent to service
of process in any jurisdiction where it would not otherwise be subject to
such service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not then so subject;
(e) (1) in the case of a Shelf Registration or (2) if Participating
Broker-Dealers from whom the Company or the Trust has received prior
written notice that they will be utilizing the Prospectus contained in the
Exchange Offer Registration Statement as provided in Section 3(t) hereof,
are seeking to sell Exchange Securities and are required to deliver
Prospectuses, promptly notify each Holder of Registrable Securities, or
such Participating Broker-Dealers, as the case may be, their counsel and
the managing underwriters, if any, and promptly confirm such notice in
writing (i) when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (ii) of
any request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective, (iii) of
the issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the
qualification of the Registrable Securities or the Exchange Securities to
be offered or sold by any Participating Broker-Dealer in any jurisdiction
described in paragraph 3(d) hereof or the initiation of any proceedings for
that purpose, (iv) in the case of a Shelf Registration, if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the
-15-
representations and warranties of the Company and the Trust contained in
any purchase agreement, securities sales agreement or other similar
agreement, cease to be true and correct in all material respects, (v) of
the happening of any event or the failure of any event to occur or the
discovery of any facts or otherwise, during the Effectiveness Period which
makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which causes such Registration
Statement or Prospectus to omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company and the Trust's
reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of each
Registration Statement relating to such Shelf Registration and any post-
effective amendment thereto (without documents incorporated therein by
reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and in such denominations (consistent
with the provisions of the Indenture and the Declaration) and registered in
such names as the selling Holders or the underwriters may reasonably
request at least two Business Days prior to the closing of any sale of
Registrable Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to such
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an
-16-
event, and each Holder hereby agrees to suspend the sale of Securities
pursuant to such Prospectus until the Company has amended or supplemented
such Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented prospectus to such holder (or
Participating Broker-Dealer, as the case may be) or the Company has given
notice that the sale of the Securities may be resumed, as the case may be;
(j) in the case of a Shelf Registration, a reasonable time prior to
the filing of any document which is to be incorporated by reference into a
Registration Statement or a Prospectus after the initial filing of a
Registration Statement. provide a reasonable number of copies of such
document to the Holders; and make such of the representatives of the
Company and the Trust as shall be reasonably requested by the Holders of
Registrable Securities or an Initial Purchaser on behalf of such Holders
available for discussion of such document;
(k) obtain a CUSIP number for all Exchange Capital Securities and the
Capital Securities (and if the Trust has made a distribution of the
Subordinated Debentures to the Holders of the Capital Securities, the
Subordinated Debentures or the Exchange Debentures) as the case may be, not
later than the effective date of a Registration Statement, and provide the
Trustee with printed certificates for the Exchange Securities or the
Registrable Securities, as the case may be, in a form eligible for deposit
with the Depositary;
(l) cause the Indenture, the Declaration, and the Exchange Guarantee
to be qualified under the Trust Indenture Act of 1939 (the "TIA") in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, and effect such changes to such documents
as may be required for them to be so qualified in accordance with the terms
of the TIA and execute, and use its best efforts to cause the relevant
trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the
SEC to enable such documents to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions as are reasonably
requested in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection, whether
or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x) an
Initial Purchaser, in the case where such Initial Purchaser holds
Securities acquired by it as part of its initial allotment and (y) other
Holders of the
-17-
Registrable Securities covered thereby: (i) make such representations and
warranties to Holders of such Registrable Securities and the underwriters
(if any), with respect to the business of the Trust, the Company and its
subsidiaries as then conducted and the Registration Statement, Prospectus
and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and the Trust and
updates thereof (which may be in the form of a reliance letter) in form and
substance reasonably satisfactory to the managing underwriters (if any) and
the Holders of a majority in principal amount of the Registrable Securities
being sold, addressed to each selling Holder and the underwriters (if any)
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such underwriters (it being agreed that the matters to be
covered by such opinion may be subject to customary qualifications and
exceptions); (iii) obtain "cold comfort" letters and updates thereof in
form and substance reasonably satisfactory to the managing underwriters
from the independent certified public accountants of the Company and the
Trust (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company and the Trust or of any
business acquired by the Company and the Trust for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by
such underwriters in accordance with Statement on Auditing Standards No.
72; and (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable to the
underwriters and the Holders of Registrable Securities than those set forth
in Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount or liquidation amount,
as the case may be, of Registrable Securities covered by such Registration
Statement and the managing underwriters and agents) customary for such
agreements with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such underwriters and selling
Holders). The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any
-18-
Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, make reasonably available for inspection by any
selling Holder of such Registrable Securities being sold, or each such
Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Securities, if any,
and any attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be, or
underwriter (collectively, the "Inspectors"), at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Trust, the Company and
its subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Trust, the Company and its subsidiaries to make available all relevant
information in each case reasonably requested by any such Inspector in
connection with such Registration Statement; provided, however, that the
foregoing inspection and information gathering shall be coordinated on
behalf of the Initial Purchasers or any Participating Broker-Dealer by
Salomon and on behalf of the other parties by one counsel designated by the
Majority Holders on behalf of such other parties as described in Section
2(c) hereof. Records which the Company and the Trust determine, in good
faith, to be confidential and any records which it notifies the Inspectors
are confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, (ii) the release
of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or is necessary in connection with any
action, suit or proceeding or (iii) the information in such Records has
been made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree in writing that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by it
as the basis for any market transactions in the securities of the Trust or
the Company unless and until such is made generally available to the
public. Each selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to further agree in writing
that it will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make
generally available to its
-19-
securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end
of any 12-month period (or 90 days after the end of any 12-month period if
such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private Exchange, if
requested by a Trustee, obtain an opinion of counsel to the Company
addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange, as
the case may be, substantially to the effect that (i) each of the Company
and the Trust, as the case requires, has duly authorized, executed and
delivered the Exchange Securities and Private Exchange Securities, and (ii)
each of the Exchange Securities or the Private Exchange Securities, as the
case may be, constitutes a legal, valid and binding obligation of the
Company or the Trust, as the case requires, enforceable against the Company
or the Trust, as the case requires, in accordance with its respective terms
(in each case, with customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company or
the Trust, as applicable (or to such other Person as directed by the
Company or the Trust, respectively), in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the
Company or the Trust, as applicable, shall xxxx, or cause to be marked, on
such Registrable Securities delivered by such Holders that such Registrable
Securities are being cancelled in exchange for the Exchange Securities or
the Private Exchange Securities, as the case may be; in no event shall such
Registrable Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the NASD;
(s) use its best efforts to take all other steps necessary to effect
the registration of the Registrable
-20-
Securities covered by a Registration Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to the
Initial Purchasers or another representative of the Participating Broker-
Dealers, and which shall contain a summary statement of the positions taken
or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer (a "Participating Broker-Dealer")
that holds Registrable Securities acquired for its own account as a result
of market-making activities or other trading activities and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities to be received by such broker-dealer in the Exchange
Offer, whether such positions or policies have been publicly disseminated
by the staff of the SEC or such positions or policies, in the reasonable
judgment of the Initial Purchasers or such other representative, represent
the prevailing views of the staff of the SEC, including a statement that
any such broker-dealer who receives Exchange Securities for Registrable
Securities pursuant to the Exchange Offer may be deemed a statutory
underwriter and must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Securities,
(ii) furnish to each Participating Broker-Dealer who has delivered to the
Company the notice referred to in Section 3(e), without charge, as many
copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or
supplement thereto, as such Participating Broker-Dealer may reasonably
request (each of the Company and the Trust hereby consents to the use of
the Prospectus forming part of the Exchange Offer Registration Statement or
any amendment or supplement thereto by any Person subject to the prospectus
delivery requirements of the Securities Act, including all Participating
Broker-Dealers, in connection with the sale or transfer of the Exchange
Securities covered by the Prospectus or any amendment or supplement
thereto), (iii) use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of
the Securities Act for such period of time as such Persons must comply with
such requirements under the Securities Act and applicable rules and
regulations in order to resell the Exchange Securities, provided, however,
that such period shall not be required to exceed 180 days (or such longer
period if extended pursuant to the last sentence of Section 3 hereof) (the
"Applicable Period"), and (iv) include in the transmittal letter or similar
documentation to be executed by an exchange offeree
-21-
in order to participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-
making activities or other trading activities, it will deliver a
prospectus meeting the requirements of the Securities Act in
connection with any resale of Exchange Securities received in
respect of such Registrable Securities pursuant to the Exchange
Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning of
the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company and the Trust agree to deliver to the Initial Purchasers or to
another representative of the Participating Broker-Dealers, if
requested by an Initial Purchaser or such other representative of the
Participating Broker-Dealers, on behalf of the Participating Broker-
Dealers upon consummation of the Exchange Offer (i) an opinion of
counsel in form and substance reasonably satisfactory to the Initial
Purchasers or such other representative of the Participating Broker-
Dealers, covering the matters customarily covered in opinions
requested in connection with Exchange Offer Registration Statements
and such other matters as may be reasonably requested (it being agreed
that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions), (ii) an officers'
certificate containing certifications substantially similar to those
set forth in Section 5(f) of the Purchase Agreement and such
additional certifications as are customarily delivered in a public
offering of debt securities and (iii) as well as upon the
effectiveness of the Exchange Offer Registration Statement, a comfort
letter, in each case, in customary form if permitted by Statement on
Auditing Standards No. 72.
The Company or the Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Company or the Trust, as applicable, such information regarding such seller as
may be required by the staff of the SEC to be included in a Registration
Statement. The Company or the Trust may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to
-22-
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of a Shelf Registration Statement, or if Participating
Broker-Dealers who have notified the Company and the Trust that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(t) hereof are seeking to sell Exchange Securities and
are required to deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Company or the Trust of the happening of any event of the
kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof or until
it is advised in writing (the "Advice") by the Company and the Trust that the
use of the applicable Prospectus may be resumed, and, if so directed by the
Company and the Trust, such Holder will deliver to the Company or the Trust (at
the Company's or the Trust's expense, as the case requires) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company or the Trust shall give any such notice to suspend the
disposition of Registrable Securities or Exchange Securities, as the case may
be, pursuant to a Registration Statement, the Company and the Trust shall use
their best efforts to file and have declared effective (if an amendment) as soon
as practicable an amendment or supplement to the Registration Statement and
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and including
the date when the Company and the Trust shall have made available to the Holders
(x) copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Company and the Trust agree, jointly and severally,
to indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each agent, employee, officer and director of any
of the foregoing parties and each person that controls each of the foregoing
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and agents, employees, officers and directors of any such
controlling person (each, a "Section 4(a) Indemnified Party") from and against
any and all losses, claims, damages, judgments, liabilities and expenses
(including the reasonable fees and expenses of counsel and other expenses in
connection with investigating, defending or
-23-
settling any such action or claim) as they are incurred which arise out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement covering Registrable Securities or
Exchange Securities or 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 not
misleading, except (i) the Company and the Trust shall not be liable to any
Section 4(a) Indemnified Party in any such case insofar as such losses, claims,
damages, judgments, liabilities or expenses arise out of, or are based upon, any
such untrue statement or omission or alleged untrue statement or omission based
upon information furnished in writing by such Holder, Initial Purchaser,
Participating Broker-Dealer or any underwriter to the Company or the Trust
expressly for use therein and (ii) the Company and the Trust shall not be liable
to any Section 4(a) Indemnified Party under the indemnity agreement in this
Section 4(a) with respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary Prospectus to the extent that
any such loss, claim, damage, judgment, liability or expense of any Holder,
Initial Purchaser, Participating Broker-Dealer, any underwriter or controlling
person results from the fact that such Holder, Initial Purchaser, any
underwriter or Participating Broker-Dealer sold Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the final Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such Holder, Initial
Purchaser, underwriter or Participating Broker-Dealer and the loss, claim,
damage, judgment, liability or expense of such Holder, Initial Purchaser,
underwriter, Participating Broker-Dealer or controlling person results from an
untrue statement or omission of a material fact contained in the preliminary
Prospectus, which was corrected in the final Prospectus.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
Section 4(a) Indemnified Party with respect to which indemnity may be sought
against the Company and the Trust pursuant to this Section 4, such Section 4(a)
Indemnified Party shall promptly notify the Company and the Trust in writing,
and the Company and the Trust shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Section 4(a) Indemnified Party and payment of all fees and expenses; provided,
however, that the omission so to notify the Company and the Trust shall not
relieve the Company or the Trust from any liability that they may have to any
Section 4(a) Indemnified Party (except to the extent that the Company and the
Trust are materially prejudiced or otherwise forfeit substantive rights or
defenses by reason of such failure). A Section 4(a) Indemnified Party shall have
the right to employ separate counsel in any such action or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Section 4(a)
-24-
Indemnified Party unless (i) the Company and the Trust agree in writing to pay
such fees and expenses, (ii) the Company and the Trust have failed promptly to
assume the defense and employ counsel satisfactory to the Section 4(a)
Indemnified Party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include the Section 4(a) Indemnified Party and
the Company and/or the Trust and such Section 4(a) Indemnified Party shall have
been advised in writing by its counsel that representation of them and the
Company and/or the Trust by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
has been proposed) due to actual or potential differing interests between them
(in which case the Company and/or the Trust shall not have the right to assume
the defense of such action on behalf of such Section 4(a) Indemnified Party). It
is understood that the Company and the Trust 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 fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for such Section 4(a) Indemnified
Party, and that all such fees and expenses shall be reimbursed as they are
incurred. The Company and the Trust shall not be liable for any settlement of
any such action effected without the written consent of the Company and the
Trust, but if settled with the written consent of the Company and the Trust, or
if there is a final judgment with respect thereto, the Company and the Trust
agree to indemnify and hold harmless each Section 4(a) Indemnified Party from
and against any loss or liability by reason of such settlement or judgment. The
Company and the Trust shall not, without the prior written consent of each
Section 4(a) Indemnified Party affected thereby, effect any settlement of any
pending or threatened proceeding in which such Section 4(a) Indemnified Party
has sought indemnity hereunder, unless such settlement includes an unconditional
release of such Section 4(a) Indemnified Party from all liability arising out of
such action, claim, litigation or proceeding.
(c) Each Holder agrees to indemnify and hold harmless the Company, the
Trust, any underwriter and the other selling Holders and each of their
respective directors, officers (including each officer of the Company and the
Trust who signed the Registration Statement) and any person controlling the
Company, the Trust, any underwriter or any other selling Holder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act (each such
party, a "Section 4(c) Indemnified Party") to the same extent as the foregoing
indemnity from the Company and the Trust to any Section 4(a) Indemnified Party,
but only with respect to information furnished to the Company or the Trust in
writing by such Holder, expressly for use in the Registration Statement,
Prospectus (or any amendment or supplement thereto), or any preliminary
Prospectus, provided, however, that, in the case of a Shelf Registration
Statement, no such Holder shall be liable for any amount hereunder in excess of
the amount by which the net
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proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement exceeds 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. In case any action
shall be brought against any Section 4(c) Indemnified Party based on the
Registration Statement, Prospectus (or any amendment or supplement thereto), or
any preliminary Prospectus and in respect of which indemnification may be sought
against each Holder pursuant to this Section 4(c), each Holder shall have the
rights and duties given to the Company and the Trust by Section 4(a) (except
that if the Company and the Trust shall have assumed the defense thereof, each
Holder may, but shall not be required to, employ separate counsel therein and
participate in the defense thereof and the fees and expenses of such counsel
shall be at the expense of the Holder) and the Section 4(c) Indemnified Parties
shall have the rights and duties given to the Section 4(a) Indemnified Parties
by Section 4(b).
(d) If the indemnification provided for in this Section 4 is
unavailable to any party entitled to indemnification pursuant to Section 4(a) or
4(c), then each 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, judgments, liabilities and expenses
in such proportion as is appropriate to reflect the relative fault of the
Company and the Trust, on the one hand, and each Holder, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, judgments, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of the Company and the
Trust, on the one hand, and each Holder, on the other, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Trust, on the one hand, or
by each Holder, on the other, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Company, the Trust and each Holder agree that it would not be
just and equitable if contribution pursuant to Section 4(d) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 4(d). No person
found 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
found guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 4 are in addition to any liability that any indemnifying party may
otherwise have to any indemnified party.
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5. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Company or the Trust is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Securities remain outstanding, each of the Company and the
Trust, as the case may be, will use its best efforts to file the reports
required to be filed by it under the Securities Act and Section 13(a) or 15(d)
of the Exchange Act and the rules and regulations adopted by the SEC thereunder,
or, if it ceases to be so required to file such reports, it will, upon the
request of any Holder of Registrable Securities (a) make publicly available such
information as is necessary to permit sales of its securities pursuant to Rule
144 under the Securities Act, (b) deliver such information to a prospective
purchaser as is necessary to permit sales of its securities pursuant to Rule
144A under the Securities Act and it will take such further action as any Holder
of Registrable Securities may reasonably request, and (c) take such further
action that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, (ii) Rule 144A under the Securities Act,
as such rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, each of the Company and the Trust will deliver to such
Holder a written statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company or the Trust has not
entered into, nor will the Company or the Trust on or after the date of this
Agreement enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's or the Trust's other issued and
outstanding securities under any such agreements.
(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 and the Trust has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure; provided that no amendment, modification or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities. Notwithstanding the foregoing sentence, (i) this
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Agreement may be amended, without the consent of any Holder of Registrable
Securities, by written agreement signed by the Company, the Trust and Salomon,
to cure any ambiguity, correct or supplement any provision of this Agreement
that may be inconsistent with any other provision of this Agreement or to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with other provisions of this
Agreement, (ii) this Agreement may be amended, modified or supplemented, and
waivers and consents to departures from the provisions hereof may be given by
written agreement signed by the Company, the Trust and Salomon to the extent
that any such amendment, modification, supplement, waiver or consent is, in
their reasonable judgment, necessary or appropriate to comply with applicable
law (including any interpretation of the Staff of the SEC) or any change therein
and (iii) to the extent any provision of this Agreement relates to an Initial
Purchaser, such provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may be given, by written
agreement signed by Salomon, the Company and the Trust.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase Agreement; and (ii) if
to the Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the respective successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the
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Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities, such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement and such Person shall be
entitled to receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers shall be a
third party beneficiary of the agreements made hereunder between the Company and
the Trust, on the one hand, and the Holders, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties 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 DEEMED TO HAVE BEEN MADE IN
THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Company, the Trust or its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company, the Trust or its Affiliates shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MMI COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
and Chief Financial Officer
MMI CAPITAL TRUST I
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
and Controller
Confirmed and accepted as of
the date first above
written:
SALOMON BROTHERS INC
ABN AMRO CHICAGO CORPORATION
BANCAMERICA XXXXXXXXX XXXXXXXX
By: XXXXXXX XXXXXXXX INC
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name:
Title:
