Exhibit
4-11  
 
 
 
 **EXECUTION
COPY**
 
  ***BANC
OF AMERICA SECURITIES LLC***
 
 
 
 
 
 **$15,000,000
AGGREGATE PRINCIPAL AMOUNT**
  **PMA
Capital Corporation**
  **6.50%
SENIOR SECURED CONVERTIBLE DEBENTURES**
 
 **DUE
2022**
  **Registration
Rights Agreement**
  **dated
as of November 15, 2004**
 
 
 
 
   
   
 REGISTRATION
RIGHTS AGREEMENT, dated as of November 15, 2004, between PMA Capital
Corporation, a Pennsylvania corporation (together with any successor entity,
herein referred to as the “ **Company** ”) and
Banc of America Securities LLC, in its capacity as initial purchaser (the
“ **Initial
Purchaser** ”) under
the Purchase Agreement (as defined below).
 
 Pursuant
to the Purchase Agreement, dated November 10, 2004 (the “ **Purchase
Agreement** ”),
between the Company and the Initial Purchaser, the Initial Purchaser has agreed
to purchase from the Company $15,000,000 in aggregate principal amount of the
Company’s 6.50% Senior Secured Convertible Debentures due September 30, 2022
(the “ **Notes** ”). The
Notes will be convertible, on the terms, and subject to the conditions, set
forth in the Indenture (as defined herein), into fully paid, nonassessable
shares of Class A common stock, par value $5.00 per share, of the Company
together with the rights evidenced by such Common Stock to the extent provided
in the Rights Agreement dated as of May 3, 2000 between the Company and The Bank
of New York, as rights agent (collectively, the “ **Common
Stock** ”). To
induce the Initial Purchaser to purchase the Notes, the Company has agreed to
provide the registration rights set forth in this Agreement pursuant to Section
5(h) of the Purchase Agreement.
 
 The
parties hereby agree as follows:
 
 1. *Definitions.* Capitalized
terms used in this Agreement without definition shall have their respective
meanings set forth in the Purchase Agreement. ** As used
in this Agreement, the following capitalized terms shall have the following
meanings:
 
 “ **Additional
Amounts** ”: As
defined in Section 3(a) hereof.
 
 “ **Additional
Amounts Payment Date** ”: Each
March 30 and September 30.
 
 “ **Affiliate** ” of any
specified person means any other person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such specified
person. For purposes of this definition, control of a person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such person whether by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the
foregoing.
 
 “ **Agreement** ”: This
Registration Rights Agreement.
 
 “ **Amendment
Effectiveness Deadline Date** ” has the
meaning set forth in Section 2(e) hereof.
 
 “ **Blue
Sky Application** ”: As
defined in Section 6(a)(i) hereof.
 
 
 
 
 “ **Business
Day** ”: The
definition of “Business Day” in the Indenture.
 
 “ **Commission** ”:
Securities and Exchange Commission.
 
 “ **Common
Stock** ”: As
defined in the preamble hereto.
 
 “ **Company** ”: As
defined in the preamble hereto.
 
 “ **Effectiveness
Period** ”: As
defined in Section 2(a)(iii) hereof.
 
 “ **Effectiveness
Target Date** ”: As
defined in Section 2(a)(ii) hereof.
 
 “ **Exchange
Act** ”:
Securities Exchange Act of 1934, as amended.
 
 “ **Holder** ”: A
Person who owns, beneficially or otherwise, Transfer Restricted
Securities.
 
 “ **Indemnified
Holder** ”: As
defined in Section 6(a) hereof.
 
 “ **Indenture** ”: The
Indenture, dated as of November 15, 2004 among the Company and U.S. Bank
National Association, as trustee (the “ **Trustee** ”),
pursuant to which the Notes are to be issued, as such Indenture is amended,
modified or supplemented from time to time in accordance with the terms
thereof.
 
 “ **Initial
Purchaser** ”: As
defined in the preamble hereto.
 
 “ **Majority
of Holders** ”:
Holders holding over 50% of the aggregate principal amount of Notes outstanding;
provided that, for the purpose of this definition, a holder of shares of Common
Stock which constitute Transfer Restricted Securities and issued upon
conversion, redemption or repurchase of the Notes shall be deemed to hold an
aggregate principal amount of Notes (in addition to the principal amount of
Notes held by such holder) equal to the product of (x) the number of such shares
of Common Stock held by such holder and (y) the conversion price in effect at
the time of such conversion, redemption or repurchase as determined in
accordance with the Indenture.
 
 “ **NASD** ”:
National Association of Securities Dealers, Inc.
 
 “ **Notes** ”: As
defined in the preamble hereto.
 
 “ **Notice
and Questionnaire** ”: A
written notice executed by the respective Holder and delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex
A to the
Offering Memorandum of the Company, dated November 10, 2004 relating to the
Notes.
 
 
 2
 
 “ **Notice
Holder** ”: On any
date, a Holder that has delivered a Notice and Questionnaire to the Company on
or prior to such date.
 
 “ **Person** ”: An
individual, partnership, corporation, company, unincorporated organization,
trust, joint venture or a government or agency or political subdivision
thereof.
 
 “ **Purchase
Agreement** ”: As
defined in the preamble hereto.
 
 “ **Prospectus** ”: The
prospectus included in a Shelf Registration Statement, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all documents incorporated by reference
into such prospectus.
 
 “ **Record
Holder** ”: With
respect to any Additional Amounts Payment Date, each Person who is a Holder on
the 15 th day
preceding the relevant Additional Amounts Payment Date. In the case of a Holder
of shares of Common Stock issued upon conversion of the Notes, “Record Holder”
shall mean each Person who is a Holder of shares of Common Stock which
constitute Transfer Restricted Securities on the 15 th day
preceding the relevant Additional Amounts Payment Date.
 
 “ **Registration
Default** ”: As
defined in Section 3(a) hereof.
 
 “ **Requisite
Information** ”: As
defined in Section 4(d) hereof.
 
 “ **Securities
Act** ”:
Securities Act of 1933, as amended.
 
 “ **Shelf
Filing Deadline** ”: As
defined in Section 2(a)(i) hereof.
 
 “ **Shelf
Registration Statement** ”: As
defined in Section 2(a)(i) hereof.
 
 “ **Special
Counsel** ”: means
Katten Muchin Zavis Rosenman or one such other successor counsel as shall be
specified by the Majority of Holders, but which may, with the written consent of
the Initial Purchaser (which shall not be unreasonably withheld), be another
nationally recognized law firm experienced in securities law matters designated
by the Company.
 
 “ **Subsequent
Shelf Registration Statement** ” has the
meaning set forth in Section 2(c) hereof.
 
 
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 “ **Suspension
Notice** ”: As
defined in Section 4(c) hereof.
 
 “ **Suspension
Period** ”: As
defined in Section 4(b)(i) hereof.
 
 “ **TIA** ”: Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder, in each case, as in effect on the date the Indenture is
qualified under the TIA.
 
 “ **Transfer
Restricted Securities** ”: Each
Note and each share of Common Stock issued upon conversion of Notes until the
earlier of:
 
 (i)  the date
on which the offer and sale of such Note or such share of Common Stock issued
upon conversion has been effectively registered under the Securities Act and
such Note or such share of Common Stock have been disposed of in accordance with
the Shelf Registration Statement;
 
 (ii)  the date
on which such Note or such share of Common Stock issued upon conversion is
transferred in compliance with Rule 144 under the Securities Act or may be sold
or transferred by a person who is not an affiliate of the Company pursuant to
Rule 144 under the Securities Act (or any other similar provision then in force)
without any volume or manner of sale restrictions thereunder; or
 
 (iii)  the date
on which such Note or such share of Common Stock issued upon conversion ceases
to be outstanding (whether as a result of redemption, repurchase and
cancellation, conversion or otherwise).
 
 “ **Underwritten
Registration** ”: A
registration in which Notes of the Company are sold to an underwriter for
reoffering to the public.
 
 Unless
the context otherwise requires, the singular includes the plural, and words in
the plural include the singular.
 
 2. *Shelf
Registration* .
 
 (a)  The
Company shall:
 
 (i)  not later
than 90 days after the date hereof (the “ **Shelf
Filing Deadline** ”), cause
to be filed a registration statement pursuant to Rule 415 under the Securities
Act (the “ **Shelf
Registration Statement** ”), which
Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities held by Holders that have provided the information
required pursuant to the terms of Section 2(b) hereof;
 
 
 4
 
 (ii)  use
reasonable efforts to cause the Shelf Registration Statement to be declared
effective by the Commission not later than 180 days after the date hereof (the
“ **Effectiveness
Target Date** ”);
and
 
 (iii)  use
reasonable efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
4(b) hereof to the extent necessary to ensure that (A) it is available for
resales by the Holders of Transfer Restricted Securities entitled, subject to
Section 2(b), to the benefit of this Agreement and (B) conforms with the
requirements of this Agreement and the Securities Act and the rules and
regulations of the Commission promulgated thereunder as announced from time to
time, for a period (the “ **Effectiveness
Period** ”) until
the earliest of:
 
 (1)  two years
following the last date of original issuance of any of the Notes;
 
 (2)  the date
when the Holders of Transfer Restricted Securities are able to sell all such
Transfer Restricted Securities immediately without restriction pursuant to the
volume limitation provisions of Rule 144 under the Securities Act; or
 
 (3)  the date
when all of the Transfer Restricted Securities have been sold either pursuant to
the Shelf Registration Statement or pursuant to Rule 144 under the Securities
Act or any similar provision then in force.
 
 (b)  At the
time the Shelf Registration Statement is declared effective, each Holder that
became a Notice Holder on or prior to the date fifteen (15) Business Days prior
to such time of effectiveness shall be named as a selling securityholder in the
Shelf Registration Statement and the related Prospectus in such a manner as to
permit such Holder to deliver such Prospectus to purchasers of Transfer
Restricted Securities in accordance with applicable law. None of the Company’s
securityholders (other than the Holders of Transfer Restricted Securities) shall
have the right to include any of the Company’s securities in the Shelf
Registration Statement.
 
 
 5
 
 (c)  If the
Shelf Registration Statement or any Subsequent Shelf Registration Statement
ceases to be effective for any reason at any time during the Effectiveness
Period (other than because all Transfer Restricted Securities registered
thereunder shall have been resold pursuant thereto or shall have otherwise
ceased to be Transfer Restricted Securities), the Company shall use reasonable
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within ten (10) Business Days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are Transfer
Restricted Securities (a “ **Subsequent
Shelf Registration Statement** ”). If a
Subsequent Shelf Registration Statement is filed, the Company shall use
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.
 
 (d)  The
Company shall supplement and 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, if required by the
Securities Act or as reasonably requested by the Initial Purchaser or by the
Trustee on behalf of the Holders of the Transfer Restricted Securities covered
by such Shelf Registration Statement.
 
 (e)  Each
Holder agrees that if such Holder wishes to sell Transfer Restricted Securities
pursuant to a Shelf Registration Statement and related Prospectus, it will do so
only in accordance with this Section 2(e) and Section 4(b). Each Holder wishing
to sell Transfer Restricted Securities pursuant to a Shelf Registration
Statement and related Prospectus agrees to deliver a Notice and Questionnaire to
the Company at least three (3) Business Days prior to any intended distribution
of Transfer Restricted Securities under the Shelf Registration Statement. From
and after the date the Shelf Registration Statement is declared effective the
Company shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered, and in any event upon the later of (x) fifteen (15)
Business Days after such date (but no earlier than fifteen (15) Business Days
after effectiveness) or (y) fifteen (15) Business Days after the expiration of
any Suspension Period in effect when the Notice and Questionnaire is delivered
or put into effect within fifteen (15) Business Days of such delivery date or,
if the Company is required to file with the Commission a new Shelf Registration
Statement, within thirty (30) calendar days after the date a Notice and
Questionnaire is delivered:
 
 
 6
 
 (i)  if
required by applicable law, file with the Commission a post-effective amendment
to the Shelf Registration Statement or an additional Shelf Registration
Statement or prepare and, if required by applicable law, file a supplement to
the related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that the Holder
delivering such Notice and Questionnaire is named as a selling securityholder in
the Shelf Registration Statement and the related Prospectus in such a manner as
to permit such Holder to deliver such Prospectus to purchasers of the Transfer
Restricted Securities in accordance with applicable law and, if the Company
shall file a post-effective amendment to the Shelf Registration Statement or
such additional Shelf Registration Statement, as the case may be, use reasonable
efforts to cause such post-effective amendment or such additional Shelf
Registration Statement, as the case may be, to be declared effective under the
Securities Act as promptly as is practicable, but in any event by the date (the **“Amendment
Effectiveness Deadline Date”** ) that is
sixty (60) days after the date such post effective amendment or such additional
Shelf Registration Statement is required by this clause to be
filed;
 
 (ii)  upon its
request, provide such Holder copies of any documents filed pursuant to Section
2(e)(i); and
 
 (iii)  notify
such Holder as promptly as practicable after the effectiveness under the
Securities Act of any post-effective amendment filed pursuant to Section
2(e)(i);
 
 *provided* that if
such Notice and Questionnaire is delivered during a Suspension Period, the
Company shall so inform the Holder delivering such Notice and Questionnaire and
shall take the actions set forth in clauses (i), (ii) and (iii) above upon
expiration of the Suspension Period in accordance with Section 4(b).
Notwithstanding anything contained herein to the contrary, (i) the Company shall
not be under any obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Registration Statement or related Prospectus and
(ii) the Amendment Effectiveness Deadline Date shall be extended by up to
fifteen (15) Business Days from the expiration of a Suspension Period (and the
Company shall not incur any obligation to pay Additional Amounts during such
extension) if such Suspension Period shall be in effect on the Amendment
Effectiveness Deadline Date.
 
 
 7
 
 3. *Additional
Amounts* .
 
 (a)  If:
 
 (i)  the Shelf
Registration Statement is not filed with the Commission prior to or on the Shelf
Filing Deadline;
 
 (ii)  the Shelf
Registration Statement has not been declared effective by the Commission prior
to or on the Effectiveness Target Date;
 
 (iii)  the
Company has failed to perform its obligations set forth in Section 2(e) within
the time period required therein;
 
 (iv)  any
post-effective amendment to a Shelf Registration Statement or additional Shelf
Registration Statement filed pursuant to Section 2(e)(i) has not become
effective under the Securities Act on or prior to the Amendment Effectiveness
Deadline Date;
 
 (v)  except as
provided in Section 4(b)(i) hereof, the Shelf Registration Statement is filed
and declared effective but, during the Effectiveness Period, shall thereafter
cease to be effective or fail to be usable for its intended purpose without
being succeeded within ten (10) Business Days by a post-effective amendment to
the Shelf Registration Statement, a supplement to the Prospectus or a report
filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act that cures such failure and, in the case of a post-effective
amendment, is itself immediately declared effective; provided that the fact that
a Shelf Registration Statement is not usable by a particular Holder at any given
time solely as a result of the failure of such Holder to provide Requisite
Information with respect to it shall not be relevant for purposes of this clause
unless such Holder shall have provided such information to the Company and the
Company shall have failed to file an appropriate Prospectus supplement or
post-effective amendment to the shelf Registration Statement; or
 
 
 8
 
 (vi)  (A) prior
to or on the 45th day, as the case may be, of any Suspension Period, such
suspension has not been terminated or (B) Suspension Periods exceed an aggregate
of 120 days in any 360 day period,
 
 (each
such event referred to in foregoing clauses (i) through (vi), a “ **Registration
Default** ”), the
Company hereby agrees to pay interest (“ **Additional
Amounts** ”) with
respect to the Transfer Restricted Securities as provided herein from and
including the day following the Registration Default to but excluding the
earlier of (1) the day on which the Registration Default has been cured and (2)
the date the Shelf Registration Statement is no longer required to be kept
effective as set out below:
 
 (A)  in
respect of the Notes, the Company agrees to pay interest to each Holder,
accruing at a rate (x) with respect to the first 90-day period during which a
Registration Default shall have occurred and be continuing, equal to 0.25% per
annum of the aggregate principal amount of the Notes held by such Holder, and
(y) with respect to the period commencing on the 91st day following the day the
Registration Default shall have occurred and be continuing, equal to 0.50% per
annum of the aggregate principal amount of the Notes held by such Holder; *provided* that in
no event shall Additional Amounts accrue at a rate per year exceeding 0.50% of
the aggregate principal amount of the Notes held by such Holder;
and
 
 (B)  in
respect of Notes submitted for conversion into Common Stock during a
Registration Default only, the Company agrees to pay accrued and unpaid
Additional Amounts to the holders of such Notes calculated in accordance with
paragraph (A) up to and including the Conversion Date (as defined in the
Indenture) and to issue, or cause to be issued, additional shares to each Holder
that has submitted for conversion some or all of its Notes into Common Stock
equal to 3% of the applicable Conversion Rate (as defined in the Indenture) for
each $1,000 principal amount of Notes (except to the extent the Company elects
to deliver cash upon conversion in accordance with the terms of the Indenture);
and
 
 
 
 9
 
 (C)  in
respect of Common Stock, each Holder of such Common Stock will not be entitled
to any Additional Amounts.
 
 Notwithstanding
the provisions in this Section 3(a), if any Additional Amounts are payable as a
result of the Company’s failure to add the name of a Holder as an additional
selling securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Transfer Restricted Securities in accordance with
applicable law and if such failure shall have not resulted in a Registration
Default with respect to the other Holders, only such Holder shall be entitled to
receive such Additional Amounts.
 
 (b)  All
Additional Amounts accrued in accordance with paragraph (A) above shall be paid
in arrears to Record Holders by the Company on each Additional Amounts Payment
Date. All Additional Amounts and additional shares of Common Stock payable in
accordance with paragraph (B) above shall be paid and delivered on the
settlement date relating to the applicable Conversion Date. Upon the cure of all
Registration Defaults relating to any particular Note or share of Common Stock,
the accrual of Additional Amounts with respect to such Note or share of Common
Stock will cease.
 
 All
obligations of the Company set forth in this Section 3 that are outstanding with
respect to any Transfer Restricted Security at the time such security ceases to
be a Transfer Restricted Security shall survive until such time as all such
obligations with respect to such Transfer Restricted Security shall have been
satisfied in full.
 
 The
Additional Amounts set forth above shall be the exclusive monetary remedy
available to the Holders of Transfer Restricted Securities for each Registration
Default.
 
 4. *Registration
Procedures* .
 
 (a)  In
connection with the Shelf Registration Statement, the Company shall comply with
all the provisions of Section 4(b) hereof and shall use reasonable efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities, and pursuant thereto, shall as expeditiously as possible but no
later than the Shelf Filing Deadline prepare and file with the Commission a
Shelf Registration Statement relating to the registration on any appropriate
form under the Securities Act.
 
 
 10
 
 (b)  In
connection with the Shelf Registration Statement and any Prospectus required by
this Agreement to permit the sale or resale of Transfer Restricted Securities,
the Company shall:
 
 (i)  Subject
to any notice by the Company in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in Section 4(b)(iii)(D),
use reasonable efforts to keep the Shelf Registration Statement continuously
effective during the Effectiveness Period; upon the occurrence of any event that
would cause the Shelf Registration Statement or the Prospectus contained therein
(A) to contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the Effectiveness Period, the Company
shall file promptly an appropriate amendment to the Shelf Registration
Statement, a supplement to the Prospectus or a report filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case
of clause (A), correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use reasonable efforts to cause such amendment to be
declared effective and the Shelf Registration Statement and the related
Prospectus to become usable for their intended purposes as soon as practicable
thereafter. Notwithstanding the foregoing, the Company may suspend the
effectiveness of the Shelf Registration Statement by written notice to the
Holders for a period not to exceed an aggregate of 45 days in any 90-day period
(each such period, a “ **Suspension
Period** ”)
if:
 
 (x) an
event occurs and is continuing as a result of which the Shelf Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein would, in the Company’s judgment, contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and
 
 
 11
 
 (y) the
Company determines in good faith that the disclosure of such event at such time
would be seriously detrimental to the Company and its subsidiaries;
 
 *provided* that,
the Suspension Periods shall not exceed an aggregate of 120 days in any 360-day
period. The Company shall not be required to specify in the written notice to
the Holders the nature of the event giving rise to the Suspension Period. Each
Holder agrees, by acquisition of a Transfer Restricted Security, to hold any
communication by the Company in response to a notice of proposed sale in
confidence. No Additional Amounts shall be payable or accrue during any
Suspension Period permitted under this Section 4(b)(i).
 
 (ii)  Prepare
and file with the Commission such amendments and post-effective amendments to
the Shelf Registration Statement as may be necessary to keep the Shelf
Registration Statement effective during the Effectiveness Period; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and to
comply fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all Notes or shares of Common
Stock covered by the Shelf Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in the Shelf Registration Statement or supplement to the
Prospectus.
 
 (iii)  Advise
the selling Holders, the Initial Purchaser and the Special Counsel promptly and,
if requested by any of them, to confirm such advice in writing, except as
provided in clause (D) below:
 
 (A)  when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become
effective,
 
 (B)  of any
request by the Commission for amendments to the Shelf Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto if in the Company’s reasonable judgment such request could
cause a failure for the Company to cause the Shelf Registration Statement to be
declared effective under the Securities Act by the Effectiveness Target
Date,
 
 
 12
 
 (C)  of the
issuance by the Commission of any stop order suspending the effectiveness of the
Shelf Registration Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or
 
 (D)  of the
existence of any fact or the happening of any event, during the Effectiveness
Period, that makes any statement of a material fact made in the Shelf
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Shelf Registration Statement or the
Prospectus in order to make the statements therein not misleading.
 
 If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Shelf Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company shall use reasonable efforts to obtain
the withdrawal or lifting of such order at the earliest possible time and will
provide to each Holder who is named in the Shelf Registration Statement prompt
notice of the withdrawal of any such order.
 
 (iv)  Make
available at the offices where normally kept during reasonable business hours
for inspection by a representative of the selling Holders, designated in writing
by a Majority of Holders whose Transfer Restricted Securities are included in
the Shelf Registration Statement, and any attorney or accountant retained by
such selling Holders, all financial and other records, pertinent corporate
documents and properties of the Company as shall be reasonably necessary to
enable them to conduct a reasonable investigation within the meaning of Section
11 of the Securities Act, and cause the Company’s respective officers,
directors, managers and employees to supply all information reasonably requested
by any such representative or representatives of the selling Holders, attorney
or accountant in connection therewith, in each case as customary for comparable
due diligence examinations; *provided,
however* , that
the Company shall not have any obligation to deliver information to any selling
Holder or representative pursuant to this Section 4(b)(iv) unless such selling
Holder or representative shall have executed and delivered a confidentiality
agreement in a form acceptable to the Company relating to such information.
 
 
 13
 
 (v)  If
requested by any selling Holders, promptly incorporate in the Shelf Registration
Statement or Prospectus within the applicable time period set forth in Section
2(e), pursuant to a supplement or post-effective amendment if necessary, such
information concerning such selling Holders as such selling Holders may
reasonably request to have included therein, including, without limitation,
information relating to the “Plan of Distribution” of the Transfer Restricted
Securities.
 
 (vi)  Furnish
to each selling Holder, the Initial Purchaser and the Special Counsel upon their
request, without charge, at least one copy of the Shelf Registration Statement,
as first filed with the Commission, and of each amendment thereto (and any
documents incorporated by reference therein or exhibits thereto (or exhibits
incorporated in such exhibits by reference) as such Person may reasonably
request).
 
 (vii)  Deliver
to each selling Holder, the Initial Purchaser and the Special Counsel without
charge, as many copies of the Prospectus (including each preliminary Prospectus)
and any amendment or supplement thereto as such Persons reasonably may request;
subject to any notice by the Company in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in Section 4(b)(iii)(D),
the Company hereby consents to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto.
 
 
 14
 
 (viii)  Before
any public offering of Transfer Restricted Securities, cooperate with the
selling Holders and Special Counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or Blue
Sky laws of such jurisdictions in the United States as the selling Holders may
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration Statement; *provided,
however* , that
the Company shall not be required (A) to register or qualify as a foreign
corporation or a dealer of securities where it is not now so qualified or to
take any action that would subject it to the service of process in any
jurisdiction where it is not now so subject or (B) to subject itself to general
or unlimited service of process or to taxation in any such jurisdiction if they
are not now so subject.
 
 (ix)  Cooperate
with the selling Holders to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends (unless required by applicable securities laws);
and enable such Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders may request at least two Business Days
before any sale of Transfer Restricted Securities.
 
 (x)  Use
reasonable efforts to cause the Transfer Restricted Securities covered by the
Shelf Registration Statement to be registered with or approved by such other
U.S. governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Transfer
Restricted Securities.
 
 (xi)  Subject
to Section 4(b)(i) hereof, if any fact or event contemplated by Section
4(b)(iii)(D) hereof shall exist or have occurred, use reasonable efforts to
prepare a supplement or post-effective amendment to the Shelf Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they are made, not
misleading.
 
 
 15
 
 (xii)  Obtain
CUSIP numbers for all Transfer Restricted Securities not later than the
effective date of the Shelf Registration Statement and provide the Trustee under
the Indenture with certificates for the Notes that are in a form eligible for
deposit with The Depository Trust Company.
 
 (xiii)  Cooperate
and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter that is
required to be retained in accordance with the rules and regulations of the
NASD.
 
 (xiv)  Otherwise
use reasonable efforts to comply with all applicable rules and regulations of
the Commission and all reporting requirements under the rules and regulations of
the Exchange Act.
 
 (xv)  Cause the
Indenture to be qualified under the TIA not later than the effective date of the
Shelf Registration Statement required by this Agreement, and, in connection
therewith, cooperate with the Trustee and the holders of Notes to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use
reasonable efforts to cause the Trustee thereunder to execute all documents that
may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner.
 
 (xvi)  Cause all
Common Stock covered by the Shelf Registration Statement to be listed or quoted,
as the case may be, on each securities exchange or automated quotation system on
which Common Stock is then listed or quoted.
 
 (xvii)  Provide
to each Holder and the Initial Purchaser upon written request each document
filed with the Commission pursuant to the requirements of Section 13 and Section
15 of the Exchange Act after the effective date of the Shelf Registration
Statement, unless such document is available through the Commission’s EDGAR
system.
 
 
 16
 
 (c)  Each
Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice (a “ **Suspension
Notice** ”) from
the Company of the existence of any fact of the kind described in Section
4(b)(iii)(D) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the Shelf Registration Statement
until:
 
 (i)  such
Holder has received copies of the supplemented or amended Prospectus
contemplated by Section 4(b)(xi) hereof; or
 
 (ii)  s uch
Holder is advised in writing by the Company that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated by reference in the Prospectus unless such filings are
made pursuant to the requirements of Section 13 and Section 15 of the Exchange
Act and such filings are available through the Commission’s EDGAR system.
 
 If so
directed by the Company, each Holder will deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of
suspension.
 
 (d)  Each
Holder agrees, by acquisition of a Transfer Restricted Security, that no Holder
shall be entitled to sell any of such Transfer Restricted Securities pursuant to
a Registration Statement or to receive a Prospectus relating thereto, unless
such Holder has furnished the Company with a completed Notice and Questionnaire
as required pursuant to Section 2(e) hereof (including the information required
to be included in such Notice and Questionnaire) and the information set forth
in the next sentence. Each Notice Holder agrees promptly to furnish to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not
misleading and any other information regarding such Notice Holder and the
distribution of such Transfer Restricted Securities as the Company may from time
to time reasonably request in writing (“ **Requisite
Information** ”). Any
sale of any Transfer Restricted Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus delivered
by such Holder in connection with such disposition, that such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Holder to its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary to
make the statements in such Prospectus, in the light of the circumstances under
which they were made not misleading.
 
 
 17
 
 5. *Registration
Expenses* .
 
 All
expenses incident to the Company’s performance of or compliance with this
Agreement shall be borne by the Company regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation:
 
 (i)  all
registration and filing fees and expenses (including filings made with the
NASD);
 
 (ii)  all fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws;
 
 (iii)  all
expenses of printing (including printing of Prospectuses and certificates for
the Common Stock to be issued upon conversion of the Notes) and the Company’s
expenses for messenger and delivery services and telephone;
 
 (iv)  all fees
and disbursements of counsel to the Company;
 
 (v)  all
application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements hereof;
 
 (vi)  all fees
and disbursements of independent certified public accountants of the Company;
and
 
 (vii)  the
reasonable fees and disbursements of the Special Counsel.
 
 The
Company shall bear its internal expenses (including, without limitation, all
salaries and expenses of their officers and employees performing legal,
accounting or other duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the
Company.
 
 6. *Indemnification
And Contribution* .
 
 
 18
 
 (a)  The
Company agrees to indemnify and hold harmless each Holder of Transfer Restricted
Securities covered by the Shelf Registration Statement (including in such
capacity, the Initial Purchaser), its directors, officers, and employees and
each person, if any, who controls any such Holder within the meaning of the
Securities Act or the Exchange Act (each, an “ **Indemnified
Holder** ”),
against any loss, claim, damage, liability or expense, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to resales of the Transfer Restricted
Securities), to which such Indemnified Holder may become subject, insofar as any
such loss, claim, damage, liability or action arises out of, or is based
upon:
 
 (i)  any
untrue statement or alleged untrue statement of a material fact contained in the
Shelf Registration Statement as originally filed or in any amendment thereof, in
any Prospectus, or in any amendment or supplement thereto, or
 
 (ii)  the
omission or alleged omission to state therein any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
 
 and
agrees to reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; *provided,
however,* that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder (or its related Indemnified Holder)
specifically for use therein. The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have.
 
 (b)  Each
Holder, severally and not jointly, agrees to indemnify and hold harmless the
Company, its respective directors, officers and employees and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act to the same extent as the foregoing indemnity from the Company to
each such Holder, but only with reference to written information relating to
such Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement set forth in this Section shall be in addition to any
liabilities which any such Holder may otherwise have. In no event shall any
Holder, its directors, officers or any person who controls such Holder be liable
or responsible for any amount in excess of the amount by which the total amount
received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Shelf Registration Statement exceeds (i) the amount
paid by such Holder for such Transfer Restricted Securities and (ii) the amount
of any damages that such Holder, its directors, officers or any person who
controls such Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.
 
 
 19
 
 (c)  Promptly
after receipt by an indemnified party under this Section 6 of notice of any
claim or the commencement of any action, the indemnified party shall, if a claim
in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the claim or the
commencement of that action; *provided,
however,* that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 6 except to the extent it has been
materially prejudiced by such failure and, *provided,
further,* that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 6.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; *provided,
however,* that the
Holders shall have the right to employ a single counsel to represent jointly the
Holders and their officers, employees and controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Holders against the Company under this Section 6 if the Holders
seeking indemnification shall have been advised by legal counsel that there may
be one or more legal defenses available to such Holders and their respective
officers, employees and controlling persons that are different from or
additional to those available to the Company, and in that event, the fees and
expenses of such separate counsel shall be paid by the Company. No indemnifying
party shall:
 
 
 20
 
 (i)  without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld) settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action), unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or
 
 (ii)  be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss of liability by reason of such
settlement or judgment.
 
 (d)  The
indemnifying party under this Section shall not be liable for any settlement of
any proceeding effected without its written consent, which shall not be withheld
unreasonably, but if settled with such consent or if there is a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
6(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (x) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (y) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
 
 
 21
 
 (e)  If the
indemnification provided for in this Section 6 shall for any reason be
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b) in respect of any loss, claim, damage or liability (or action in
respect thereof) referred to therein, each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability (or
action in respect thereof):
 
 (i)  in such
proportion as is appropriate to reflect the relative benefits received by the
Company from the offering and sale of the Transfer Restricted Securities on the
one hand and a Holder with respect to the sale by such Holder of the Transfer
Restricted Securities on the other, or
 
 (ii)  if the
allocation provided by Section (6)(e)(i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in Section 6(e)(i) but also the relative fault of the Company on the
one hand and the Holders on the other in connection with the statements or
omissions or alleged statements or alleged omissions that resulted in such loss,
claim, damage or liability (or action in respect thereof), as well as any other
relevant equitable considerations.
 
 The
relative benefits received by the Company on the one hand and a Holder on the
other with respect to such offering and such sale shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Notes
purchased under the Purchase Agreement (before deducting expenses) received by
the Company, on the one hand, bear to the total proceeds received by such Holder
with respect to its sale of Transfer Restricted Securities on the other. The
relative fault of the parties shall be determined by reference to 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 the Holders on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and each Holder agree that it would not
be just and equitable if the amount of contribution pursuant to this Section
6(e) were determined by *pro
rata* allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(e).
 
 
 22
 
 The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 6 shall be deemed to include, for purposes of this Section 6, any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending or preparing to defend any such action or
claim.
 
 Notwithstanding
the provisions of this Section 6, no Holder shall be required to contribute any
amount in excess of the amount by which the total price at which the Transfer
Restricted Securities purchased by it were resold exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The Holders’ obligations to
contribute as provided in this Section 6(e) are several and not
joint.
 
 (f)  The
provisions of this Section 6 shall remain in full force and effect, regardless
of any investigation made by or on behalf of any Holder, the Company or any of
the officers, directors or controlling persons referred to in Section 6 hereof,
and will survive the sale by a Holder of Transfer Restricted
Securities.
 
 7. *Rule
144A and Rule 144.* The
Company agrees with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Company (i) is
not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any Holder, to such Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144A, and (ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make
all filings required thereby in a timely manner in order to permit resales of
such Transfer Restricted Securities pursuant to Rule 144.
 
 8. *No
Participation In Underwritten Registrations.* No Holder
may participate in any Underwritten Registration hereunder.
 
 
 23
 
 9. *Miscellaneous* .
 
 (a)  *Remedies.* The
Company acknowledges and agrees that any failure by the Company to comply with
its obligations under Section 2 hereof may result in material irreparable injury
to the Initial Purchaser or the Holders for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries
precisely, and that, in the event of any such failure, the Initial Purchaser or
any Holder may obtain such relief as may be required to specifically enforce the
Company’s obligations under Section 2 hereof. The Company further agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
 
 (b)  *Actions
Affecting Transfer Restricted Securities.* The
Company shall not, directly or indirectly, take any action with respect to the
Transfer Restricted Securities as a class that would adversely affect the
ability of the Holders of Transfer Restricted Securities to include such
Transfer Restricted Securities in a registration undertaken pursuant to this
Agreement.
 
 (c)  *No
Inconsistent Agreements.* The
Company has not, as of the date hereof, entered into, nor shall, on or after the
date hereof, enter into, any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Company shall
not grant to any of its securityholders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities.
 
 (d)  *Amendments
and Waivers.* This
Agreement may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of a Majority of Holders; *provided* , *however* , that
with respect to any matter that directly or indirectly adversely affects the
rights of the Initial Purchaser hereunder, the Company shall obtain the written
consent of the Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding the foregoing
(except the foregoing proviso), a waiver or consent to depart from the
provisions hereof, with respect to a matter, which relates exclusively to the
rights of Holders whose securities are being sold pursuant to a Shelf
Registration Statement and does not directly or indirectly adversely affect the
rights of other Holders, may be given by the Majority of Holders, determined on
the basis of Notes being sold rather than registered under such Shelf
Registration Statement.
 
 
 24
 
 (e)  *Notices.* All
notices and other communications provided for or permitted hereunder shall be
made in writing by hand delivery, first class mail (registered or certified,
return receipt requested), telex, facsimile transmission, or air courier
guaranteeing overnight delivery:
 
 (i)  if to a
Holder, at the address set forth on the records of the registrar under the
Indenture or the transfer agent of the Common Stock, as the case may be;
and
 
 (ii)  if to the
Company, initially at its address set forth in the Purchase
Agreement.
 
 All such
notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; three Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if
transmitted by facsimile; at the time acknowledged by a return receipt, if sent
by electronic mail; and on the next Business Day, if timely delivered to an air
courier guaranteeing overnight delivery.
 
 Any party
hereto may change the address for receipt of communications by giving written
notice to the others.
 
 (f)  *Successors
and Assigns.* This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties, including without limitation and without the
need for an express assignment, subsequent Holders of Transfer Restricted
Securities. The Company hereby agrees to extend the benefit of this Agreement to
any Holder and any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.
 
 (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)  *Notes
Held by the Company or Its Affiliates.* Whenever
the consent or approval of Holders of a specified percentage of Transfer
Restricted Securities is required hereunder, Transfer Restricted Securities held
by the Company or its Affiliates (other than subsequent Holders if such
subsequent Holders are deemed to be Affiliates solely by reason of their holding
of such Notes) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
 
 
 25
 
 (i)  *Headings.* The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
 
 (j)  *Governing
Law.* This
Agreement shall be governed by and construed in accordance with the law of the
State of New York.
 
 (k)  *Severability.* If 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, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
 
 (l)  *Entire
Agreement* . This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to the registration
rights granted by the Company with respect to the Transfer Restricted
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
 
 
 **[SIGNATURE
PAGE FOLLOWS]**
 
 
 26
  
   IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
 
 PMA
CAPTAL CORPORATION
 
 
 By /s/
William Hitselberger
 Name:
William Hitselberger
 Title:
Executive Vice President and
 Chief
Financial Officer
 
 
 BANC OF
AMERICA SECURITIES LLC
  
 By /s/
Derek Dillon
 Name:
Derek Dillon
 Title:
Managing Director