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EXHIBIT 10.3
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REGISTRATION RIGHTS AGREEMENT
DATED JULY 15, 1997
BETWEEN
SAFECO CORPORATION
AND
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
AS INITIAL PURCHASER
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of July 15, 1997, between SAFECO Corporation, a Washington
corporation (the "Company") and ▇▇▇▇▇ ▇▇▇▇▇▇ INC. ("▇▇▇▇▇ ▇▇▇▇▇▇") (the
"Initial Purchaser)".
This Agreement is made pursuant to the Purchase Agreement
dated July 10, 1997 (the "Purchase Agreement"), between the Company, as issuer
of $200,000,000 aggregate principal amount of 6O% Notes due July 15, 2007 (the
"Notes"), and the Initial Purchaser, which provides for, among other things,
the sale by the Company to the Initial Purchaser of the Notes. In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the Company
has agreed to provide to the Initial Purchaser and its direct and indirect
transferees the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"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.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; provided, however, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
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"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 Notes" shall mean the Series B 6O% Notes due July 15, 2007
containing terms substantially identical to the Notes (except that they will
not contain terms with respect to the transfer restrictions under the
Securities Act and will not provide for any Liquidated Damages thereon).
"Exchange Offer" shall mean the offer by the Company to the Holders to
exchange all of the Registrable Notes (other than Private Exchange Notes) for
a like principal amount of Exchange Notes 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.
"Holder" shall mean the Initial Purchaser, for so long as it owns any
Registrable Notes, and each of its respective successors, assigns and direct
and indirect transferees who become registered owners of Registrable Notes
under the Indenture.
"Indenture" shall mean the Indenture relating to the Notes, 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 Purchaser" 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 Notes.
"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 Notes.
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"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 Notes" 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 Notes 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.
"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 Notes" shall mean the Notes and, if issued, the Private
Exchange Notes; provided, however, that Notes or Private Exchange Notes, as the
case may be, shall cease to be Registrable Notes when (i) a Registration
Statement with respect to such Notes or Private Exchange Notes for the exchange
or resale thereof, as the case may be, shall have been declared effective under
the Securities Act and such Notes or Private Exchange Notes, as the case may
be, shall have been disposed of pursuant to such Registration Statement, (ii)
such Notes or Private Exchange Notes, 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 Notes or Private Exchange Notes, as the case may be, shall have
ceased to be outstanding or (iv) with respect to the Notes, such Notes shall
have been exchanged for Exchange Notes 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 Notes 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
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and disbursements of counsel for any underwriters or Holders in connection with
blue sky qualification of any of the Exchange Notes or Registrable Notes) 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 Notes
or the Registrable Notes 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 which covers any of the Exchange Notes or Registrable Notes 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 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 pursuant to the provisions of Section 2(b) hereof
which covers all of the Registrable Notes or all of the Private Exchange Notes,
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-
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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 the Notes
under the Indenture.
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 shall, for the benefit of the Holders, at the Company's cost, use its
best efforts to (i) cause to be filed with the SEC 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 shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible
and electing to exchange Registrable Notes for a like principal amount of
Exchange Notes (assuming that such Holder (i) is not an Affiliate of the
Company, (ii) is not a broker-dealer tendering Registrable Notes acquired
directly from the Company for its own account, (iii) acquires the Exchange
Notes 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 Notes) to transfer such
Exchange Notes 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 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;
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(iv) permit Holders to withdraw tendered Notes 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 Notes delivered for exchange, and a statement that such
Holder is withdrawing its election to have such Notes exchanged;
(v) notify each Holder that any Note 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 Purchaser and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If the 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 Notes constituting any portion of an unsold allotment in the
initial distribution, as soon as practicable upon receipt by the Company of a
written request from the Initial Purchaser, the Company, as applicable, shall
issue and deliver to the Initial Purchaser in exchange (the "Private Exchange")
for the Notes held by such Initial Purchaser, a like principal amount of Notes
of the Company (the "Private Exchange Notes") which are issued pursuant to the
Indenture (which provides that the Exchange Notes will not be subject to the
transfer restrictions set forth in the Indenture and that the Exchange Notes
and the Private Exchange Notes will vote and consent together on all matters as
one class and that neither the Exchange Notes nor the Private Exchange Notes
will have the right to vote or consent as a separate class on any matter). The
Private Exchange Notes shall be of the same series as the Exchange Notes and
the Company will seek to cause the CUSIP Service Bureau to issue the same CUSIP
Numbers for the Private Exchange Notes as for the Exchange Notes 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 shall:
(i) accept for exchange all Notes 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 Trustee for
cancellation all Notes or portions thereof so accepted for exchange by the
Company; and
(iii) issue, and cause the Trustee under the Indenture to promptly
authenticate and deliver to each Holder, new Exchange Notes or Private Exchange
Notes, as applicable, equal in liquidation amount to the liquidation amount of
the Notes as surrendered by such Holder.
Interest on each Exchange Note and interest on each Private
Exchange Note issued pursuant to the Exchange Offer and in the Private Exchange
will accrue from the last
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date on which interest was paid on the Note surrendered in exchange therefor
or, if no interest has been paid on such Note, from the Issue Date. To the
extent not prohibited by any law or applicable interpretation of the staff of
the SEC, the Company shall use its 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 Notes who wishes to exchange such Registrable Notes for
Exchange Notes in the Exchange Offer will be required to make certain customary
representations in connection therewith, including, in the case of any Holder
of Notes, representations that (i) it is not an Affiliate of the Company, (ii)
the Exchange Notes 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 Notes. The Company shall inform the Initial
Purchaser, after consultation with the Trustee, of the names and addresses of
the Holders to whom the Exchange Offer is made, and the Initial Purchaser shall
have the right to contact such Holders and otherwise facilitate the tender of
Registrable Notes 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 Notes that are Private
Exchange Notes and Exchange Notes held by Participating Broker-Dealers, and the
Company shall have no further obligation to register the Registrable Notes
(other than Private Exchange Notes) pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. If prior to the expiration of the
Exchange Offer: (i) the Company 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 Notes 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 the Initial Purchaser with respect to any Registrable Notes held by
it, if, in the reasonable opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
or other counsel experienced in such matters, the 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
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thereof, the "Shelf Registration Event Date"), then in addition to or in lieu
of effecting the registration of the Exchange Notes pursuant to the Exchange
Offer Registration Statement, the Company will (x) promptly deliver to the
Holders 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 Notes, and (b) shall use its best efforts to have such Shelf
Registration Statement declared effective by the SEC as soon as practicable.
No Holder of Registrable Notes shall be entitled to include any of its
Registrable Notes 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 in
writing, within 15 days after receipt of a request therefor, such information
as the Company 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 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 agrees to use its 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 Notes
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 shall not permit any securities other than Registrable
Notes to be included in the Shelf Registration. The Company 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 Notes. The Company further
agrees, 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 agrees to furnish to the Holders of
Registrable Notes 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 Notes, 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 Purchaser for
the reasonable fees and disbursements of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Initial Purchaser, incurred in connection
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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 Notes 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 Notes 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
Notes 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 Notes
pursuant to such Registration Statement may legally resume. The Company will
be deemed not to have used its 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 it
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or that would result in the Holders of
Registrable Notes covered thereby not being able to exchange or offer and sell
such Registrable Notes 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 Notes 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 2(b)(i), (ii) and (iii)), then, commencing on the
181st day after the Issue
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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 Notes at a rate of 0.50%
per annum; provided, however, that the Liquidated Damages rate on the Notes may
not 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 (1) above) or (2) upon the
effectiveness of the Exchange Offer Registration Statement or a Shelf
Registration Statement (in the case of clause (ii) above), Liquidated Damages
on the principal amount of the Notes as a result of such clause (or the
relevant subclause thereof) shall cease to accrue and accumulate.
Any amounts of Liquidated Damages due pursuant to Section 2(e)(i) or
(ii) above will be payable in cash on the next succeeding January 15 and July
15, as the case may be, to Holders on the relevant record dates for the payment
of interest pursuant to the Indenture.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Company acknowledges that any failure by the
Company 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 obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the
obligations of the Company with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Company shall use its 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, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Notes by
the selling Holders thereof and, in the case of an Exchange Offer, be
available for the exchange of Registrable Notes, 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 Notes, before filing any
Registration Statement or Prospectus or any amendments or supplements
thereto, the Company shall furnish to and afford the Holders of the
Registrable
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Notes 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 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 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 Notes included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Notes being
filed and advising such Holder that the distribution of Registrable
Notes will be made in accordance with the method selected by the
Majority Holders; and (ii) furnish to each Holder of Registrable Notes
included in the Shelf Registration Statement and to each underwriter
of an underwritten offering of Registrable Notes, 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 Notes; and (iii) consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of
Registrable Notes included in the Shelf Registration Statement in
connection with the offering and sale of the Registrable Notes covered
by the Prospectus or any amendment or supplement thereto;
(d) in the case of a Shelf Registration, register or qualify
the Registrable Notes 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 Notes covered by a Registration Statement and each
underwriter
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of an underwritten offering of Registrable Notes 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 Notes owned
by such Holder; provided, however, that the Company 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 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 Notes and are required to deliver
Prospectuses, promptly notify each Holder of Registrable Notes, 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 Notes or the Exchange Notes 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 Notes covered thereby, the representations and
warranties of the Company 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'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;
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14
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Notes 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 Notes to facilitate the timely
preparation and delivery of certificates representing Registrable
Notes to be sold and not bearing any restrictive legends and in such
denominations (consistent with the provisions of the Indenture) 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 Notes 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
Notes, 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 Notes
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 Notes 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 as shall be reasonably requested by the
Holders of Registrable Notes or an Initial Purchaser on behalf of such
Holders available for discussion of such document;
(k) obtain a CUSIP number for all Exchange Notes and the
Notes, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed
certificates for the Exchange Notes or the Registrable Notes, as the
case may be, in a form eligible for deposit with the Depositary;
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15
(l) cause the Indenture to be qualified under the Trust
Indenture Act of 1939 (the "TIA") in connection with the registration
of the Exchange Notes or Registrable Notes, 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 Notes, 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) the Initial Purchaser, in the case where the
Initial Purchaser holds Notes acquired by it as part of its initial
allotment and (y) other Holders of the Registrable Notes covered
thereby: (i) make such representations and warranties to Holders of
such Registrable Notes and the underwriters (if any), with respect to
the business of 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 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 Notes
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, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business
acquired by the Company 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 Notes 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
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Notes 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 Participating Broker-Dealer who seeks
to sell Exchange Notes during the Applicable Period, make reasonably
available for inspection by any selling Holder of such Registrable
Notes being sold, or each such Participating Broker-Dealer, as the
case may be, any underwriter participating in any such disposition of
Registrable Notes, 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 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 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 Purchaser 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 determines, 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 Notes 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 Company unless and
until such is made generally available to the public. Each selling
Holder of such Registrable Notes 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;
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17
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and
make generally available to its securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Notes 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 Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, substantially to the effect that (i) the
Company has duly authorized, executed and delivered the Exchange Notes
and Private Exchange Notes, and (ii) each of the Exchange Notes or the
Private Exchange Notes, as the case may be, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company
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 Notes by Holders to the
Company (or to such other Person as directed by the Company), in
exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be, the Company shall ▇▇▇▇, or cause to be marked, on such
Registrable Notes delivered by such Holders that such Registrable
Notes are being cancelled in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be; in no event shall such
Registrable Notes be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Notes covered
by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Notes 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 Notes 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 Purchaser or another
representative of the Participating Broker-Dealers, and which shall
contain a summary
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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
Notes 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
Notes 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 Purchaser 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 Notes for
Registrable Notes 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 Notes, (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 (the Company 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 Notes 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 Notes; 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 Notes 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 Notes
received in respect of such Registrable Notes 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
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Registrable Notes, 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 agrees to deliver to the Initial Purchaser 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 Purchaser 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 may require each seller of Registrable Notes as to
which any registration is being effected to furnish to the Company such
information regarding such seller as may be required by the staff of the SEC to
be included in a Registration Statement. The Company may exclude from such
registration the Registrable Notes 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 Notes 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 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 Notes and are
required to deliver Prospectuses, each Holder agrees that, upon receipt of any
notice from the Company 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 Notes 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 that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies in
such Holder's possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Notes or
Exchange Notes, as the case may be, current at the time of receipt of such
notice. If the Company shall give any such notice to suspend the disposition
of Registrable Notes or Exchange Notes, as the case may be, pursuant to a
Registration Statement, the Company shall use its best efforts to file and have
declared effec-
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20
tive (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 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 agrees to indemnify and hold
harmless the Initial Purchaser, each Holder, each underwriter who participates
in an offering of the Registrable Notes, 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
Notes or Exchange Notes 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 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 expressly for use
therein and (ii) the Company 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 Notes 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 pursuant to this
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Section 4, such Section 4(a) Indemnified Party shall promptly notify the
Company in writing, and the Company 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 shall not relieve the
Company from any liability that it may have to any Section 4(a) Indemnified
Party (except to the extent that the Company is materially prejudiced or
otherwise forfeits 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 agrees in writing to
pay such fees and expenses, (ii) the Company has 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 such Section 4(a) Indemnified Party shall have been advised in writing by
its counsel that representation of them and the Company 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 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 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 shall not be liable for
any settlement of any such action effected without the written consent of the
Company, but if settled with the written consent of the Company, or if there is
a final judgment with respect thereto, the Company agrees 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 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, any underwriter and the other selling Holders and each of their
respective directors, officers (including each officer of the Company who
signed the Registration Statement) and any person controlling the Company, 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 to any Section 4(a) Indemnified Party, but only with respect to
information furnished to the Company in writing by such Holder, expressly for
use in the Registration Statement, Prospectus (or any amendment or supplement
thereto), or any preliminary
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22
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 Notes 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
by Section 4(a) (except that if the Company 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, 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, 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, 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 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 is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Notes remain outstanding, the Company 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 Notes (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 Notes 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 Notes 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 Notes, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered
into, nor will the Company on or after the date of this Agreement enter into,
any agreement which is inconsistent with the rights granted to the Holders of
Registrable Notes 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 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 has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Notes 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
Notes unless consented to in writing by such Holder of Registrable Notes.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended,
without the consent of any Holder of Registrable Notes, by written agreement
signed by the Company and the Initial Purchaser, 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
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agreement signed by the Company and the Initial Purchaser to the extent that
any such amendment, modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with applicable law
(including any interpretation of the Staff of the SEC) or any change therein
and (iii) to the extent any provision of this Agreement relates to the Initial
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 Initial Purchaser and the Company.
(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 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 Purchaser, the address set forth in the Purchase Agreement; and
(ii) if to the Company, 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 Purchaser, 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 Notes in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Registrable Notes, in any manner, whether by operation of law or otherwise,
such Registrable Notes shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Notes, 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. The Initial Purchaser shall be
a third party beneficiary of the agreements made hereunder between the Company,
on the one hand, and the Holders, on the other hand, and shall have the right
to enforce such agreements directly
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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) Notes Held by the Company or its Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Notes is required hereunder, Registrable Notes held by the Company 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
Confirmed and accepted as of
the date first above
written:
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director