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EXHIBIT 10.2
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REGISTRATION RIGHTS AGREEMENT
DATED JULY 15, 1997
AMONG
SAFECO CORPORATION
SAFECO CAPITAL TRUST I
AND
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
SALOMON BROTHERS INC
BANCAMERICA SECURITIES, INC.
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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 July 15, 1997, among SAFECO Corporation, a Washington
corporation (the "Company"), SAFECO CAPITAL TRUST I, a business trust formed
under the laws of the state of Delaware (the "Trust"), and ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
("▇▇▇▇▇ ▇▇▇▇▇▇"), SALOMON BROTHERS INC and BANCAMERICA SECURITIES, INC. (each
an "Initial Purchaser" and, collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated July 10, 1997 (the "Purchase Agreement"), among the Company, as issuer of
the Series A 8.072% Junior Subordinated Deferrable Interest Debentures due July
15, 2037 (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 850,000 of the Trust's Series A 8.072% 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.
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"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 SAFECO Capital Trust I, dated as of July 15,
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 8.072% Junior Subordinated Deferrable Interest
Debentures due July 15, 2037 (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 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 8.072% 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 Capital Securities Guaran-
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tee") 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 July 15, 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.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
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"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 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
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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 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
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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 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;
(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.
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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 issue and deliver to such Initial Purchaser in
exchange (the "Private Exchange") for the Securities held by such Initial
Purchaser, a like liquidation amount of 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") and which are issued pursuant to the Indenture, the
Declaration or the Guarantee (which provides that the Exchange Securities will
not be subject to the transfer restrictions set forth in the Indenture or the
Declaration, as applicable, and that the Exchange Securities, the Private
Exchange Securities and the Securities will vote and consent together on all
matters as one class and that neither the Exchange Securities, the Private
Exchange Securities nor the Securities will have the right to vote or consent
as a separate class on any matter). The Private Exchange Securities shall be
of the same series as the Exchange Securities and the Company and the Trust
will seek to cause the CUSIP Service Bureau to issue the same CUSIP Numbers for
the Private Exchange Securities as for the Exchange Securities issued pursuant
to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and, if
applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer or the
Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee
for cancellation all Securities or portions thereof so accepted for exchange by
the Company; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Declaration or the 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
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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 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
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP 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
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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 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 Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Initial Pur-
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chasers, incurred in connection with the Exchange Offer and, if applicable, the
Private Exchange, and either Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP 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
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.
(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
0.50% 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 events set
forth in Sections
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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 0.50% 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
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 0.50% 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 0.50% 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 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.
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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 July 1 and January 1, 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 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
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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 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 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
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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 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) 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);
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(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 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, the Guarantee 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,
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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 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
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parties to be indemnified pursuant to said Section (including, without
limitation, such underwriters and selling Holders). The above shall be done at
each closing under such underwriting agreement, or as and to the extent
required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b)
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, make reasonably available for inspection by any selling
Holder of such Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Trust, the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors
and employees of the Trust, the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any such Inspector in
connection with such Registration Statement; provided, however, that the
foregoing inspection and information gathering shall be coordinated on behalf
of the Initial Purchasers or any Participating Broker-Dealer by ▇▇▇▇▇ ▇▇▇▇▇▇
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
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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 ▇▇▇▇, 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 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
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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 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";
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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 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
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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 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
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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)
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 unpleaded 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.
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(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 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 misrepresen-
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tation (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.
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
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hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder of Registrable Securities.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended,
without the consent of any Holder of Registrable Securities, by written
agreement signed by the Company, the Trust and ▇▇▇▇▇ ▇▇▇▇▇▇, 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 ▇▇▇▇▇ ▇▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇▇, 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
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
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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.
SAFECO CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SAFECO CAPITAL TRUST I
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Administrative Trustee
Confirmed and accepted as of
the date first above written:
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
SALOMON BROTHERS INC
BANCAMERICA SECURITIES, INC.
By: ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
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