EXECUTION COPY
MUTUAL RISK MANAGEMENT LTD.
DEBENTURE REGISTRATION RIGHTS AGREEMENT
TABLE OF CONTENTS
Page
1. Definitions..........................................................2
1.1 Other Definitions...........................................5
2. Registration Rights..................................................5
2.1 Demand Registrations........................................6
2.2 Piggyback Registration......................................9
2.3 Obligations of the Issuers..................................9
2.4 Furnish Information........................................11
2.5 Expenses of Registration...................................11
2.6 Underwriting Requirements..................................12
2.7 Indemnification............................................13
2.8 Termination of Registration Rights.........................16
2.9 "Lock-Up" Agreement........................................16
3. Indenture...........................................................16
4. Miscellaneous.......................................................16
4.1 Amendments; Waivers........................................16
4.2 After-Acquired Shares......................................17
4.3 Successors and Assigns.....................................17
4.4 Rights and Obligations of Transferees......................17
4.5 Further Assurances.........................................17
4.6 Notices....................................................18
4.7 Governing Law; Waiver of Jury Trial........................20
4.8 Severability; Interpretation...............................21
4.9 Table of Contents; Headings................................21
4.10 Entire Agreement...........................................21
4.11 Counterparts...............................................21
4.12 No Third-Party Beneficiaries...............................21
4.13 Execution by Newco.........................................21
(i)
DEBENTURE REGISTRATION RIGHTS AGREEMENT
THIS DEBENTURE REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as
of May 17, 2001, by and among Mutual Risk Management Ltd., a company organized
under the laws of Bermuda (the "Company"), and XL Insurance Ltd ("XL"), First
Union Merchant Banking 2001, LLC, High Ridge Capital Partners II, L.P., Century
Capital Partners II, L.P., Xxxxxx X. Xxxxxxxx and Taracay Investors Company
(each, a "Purchaser" and, collectively, the "Purchasers") and Intrepid Funding
Master Trust (the "RHINOS Debenture Holder").
RECITALS
WHEREAS, the Company, the Purchasers and the RHINOS Debenture Holder are
parties to that certain securities purchase agreement dated as of May 8, 2001
(the "Securities Purchase Agreement") pursuant to which the Purchasers have
agreed to purchase 9 3/8% convertible exchangeable debentures due 2006 of the
Company in an aggregate principal amount of $112,500,000 (such debentures,
together with any RHINOS Debentures issued on or prior to the closing date in
respect of the purchase of debentures by the Purchasers, the "MRM Debentures")
and the RHINOS Debenture Holder has agreed to exchange RHINOS (as defined in the
Securities Purchase Agreement) for RHINOS Debentures having a principal amount
equal to the aggregate liquidation preference of the RHINOS tendered in exchange
therefor;
WHEREAS, the MRM Debentures are convertible into Company Shares or
exchangeable for Newco Shares and/or Newco Debentures; and
WHEREAS, in order to induce the Purchasers to enter into the Securities
Purchase Agreement and to purchase the MRM Debentures, the Company, Newco and
the Purchasers desire to enter into this Agreement for the purpose, among
others, of establishing certain registration and other rights of the Holders (as
defined below);
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
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1. Definitions.
(a) "Act" shall mean the Securities Act of 1933, as amended.
(b) "Agreement" shall have the meaning set forth in the Preamble to this
Agreement.
(c) "Business Day" shall mean any day that is not a Saturday, Sunday or a
day on which (i) commercial banks in New York City are authorized or required to
close or (ii) the New York Stock Exchange is not open for trading.
(d) "Common Stock" shall mean the common stock or common shares of the
referenced Person.
(e) "Common Stock Equivalents" shall mean securities convertible into
or exercisable or exchangeable for Common Stock of the referenced Person.
(f) "Company" shall have the meaning set forth in the Preamble to this
Agreement.
(g) "Company Securities" shall mean, collectively, the MRM Debentures
and the Company Shares.
(h) "Company Shares" shall mean shares of Common Stock of the Company
issuable upon conversion of the MRM Debentures.
(i) "Debentures" shall mean, collectively, the MRM Debentures and the
Newco Debentures. For all purposes of this Agreement, references to Debentures
shall be deemed to include a reference to the Voting Preferred Stock issued in
connection therewith.
(j) "Demand Registration" shall mean a Company Demand Registration
and/or a Newco Demand Registration.
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(k) "Holder" shall mean, as applicable, any Person owning or having
the right to acquire a Registrable Security from time to time.
(l) "Issuer" shall mean either the Company or Newco, or both as the
context requires.
(m) "MRM Debentures" shall have the meaning set forth in the Preamble
to this Agreement. For all purposes of this Agreement, references to MRM
Debentures shall be deemed to include a reference to the Voting Preferred Stock
issued in connection therewith.
(n) "Newco" shall mean a new company organized under the laws of
Bermuda and formed in connection with the Restructuring.
(o) "Newco Debentures" means the convertible debentures due 2006 of
Newco issued in exchange for MRM Debentures. For all purposes of this Agreement,
references to Newco Debentures shall be deemed to include a reference to the
Newco Voting Preferred Stock issued in connection therewith.
(p) "Newco Securities" shall mean, collectively, the Newco Debentures
and the Newco Shares.
(q) "Newco Shares" shall mean shares of Common Stock of Newco issuable
upon exchange of MRM Debentures or upon conversion of Newco Debentures.
(r) "Newco Voting Preferred Stock" shall have the meaning assigned
thereto in the Securities Purchase Agreement.
(s) "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
(t) "Person" shall mean any individual or a corporation, company,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company, government (or agency or
political subdivision thereof) or other entity of any kind.
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(u) "Purchaser(s)" shall have the meaning set forth in the Preamble to
this Agreement.
(v) "register," "registered" and "registration" shall mean a
registration effected by preparing and filing with the SEC a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(w) "Registrable Securities" shall mean (i) the Company Shares, (ii)
the Newco Shares, (iii) the MRM Debentures (including the Voting Preferred Stock
issued in connection therewith) and/or (iv) the Newco Debentures (including the
Newco Voting Preferred Stock issued in connection therewith), in each case until
such time as such securities have been sold pursuant to an effective
registration statement or an applicable exemption from registration under the
Act and are no longer subject to restrictions on transfer the Act.
(x) "Requisite Holders" shall mean the holders of a majority of the
Registrable Securities (assuming, solely for purposes of this definition, that
all MRM Debentures and Newco Debentures have been converted into Company Shares
and Newco Shares, respectively, at the then applicable conversion price);
provided, however, that at any time when XL holds a majority of the Registrable
Securities (other than RHINOS Debentures), "Requisite Holders" shall mean a
majority of the Registrable Securities (other than RHINOS Debentures); and
provided, further, however, that so long as XL owns at least $50.0 million
principal amount of Debentures, XL will be deemed to own a majority of the
Registrable Securities.
(y) "Restructuring" shall have the meaning assigned thereto in the
Securities Purchase Agreement.
(z) "RHINOS Debenture Holder" shall have the meaning set forth in the
preamble to this Agreement.
(aa) "RHINOS Debentures" shall have the meaning assigned thereto in the
Securities Purchase Agreement.
(bb) "Rule 144" shall mean Rule 144 promulgated under the Act.
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(cc) "SEC" shall mean the Securities and Exchange Commission.
(dd) "Securities Purchase Agreement" shall have the meaning set forth in
the Recitals to this Agreement.
(ee) "Voting Preferred Stock" shall have the meaning set forth in the
Securities Purchase Agreement.
(ff) "XL" shall have the meaning set forth in the preamble to this
Agreement.
1.1 Other Definitions
Defined
Term in Section
---- ----------
"Company Demand Registration" .................. Section 2.1(a)
"Indemnified Party".................................. Section 2.7(a)
"Indemnified Person(s)".............................. Section 2.7(b)
"Indenture".......................................... Section 3
"Initiating Holders"................................. Section 2.1(d)
"Newco Demand Registration".......................... Section 2.1(b)
"selling security holder"............................ Section 2.6
"Violation".......................................... Section 2.7(a)
Other capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Securities Purchase Agreement.
2. Registration Rights. The Company and Newco, jointly and severally,
covenant and agree as follows:
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2.1 Demand Registrations.
(a) Holders of MRM Debentures/Company Shares. The Holders of (i) at
least $10.0 million in principal amount of MRM Debentures or (ii) at least 9.0%
of the then outstanding Company Shares shall have the right at any time to make
a written request of the Company to register and, upon the receipt of such
written request, the Company shall register under the Act the number or
aggregate principal amount, as applicable, of Registrable Securities which are
the subject of such request (each, a "Company Demand Registration").
(b) Holders of Debentures/Newco Shares. (i) The Holders of at least
20% of the outstanding Registrable Securities (other than Company Shares) shall
have the right, with the prior written consent of XL (so long as XL owns at
least 20% of the outstanding Registrable Securities (other than Company Shares)
at such time), at any time to make a written request of Newco to register and,
upon receipt of such written request, Newco shall register under the Act the
number of Newco Shares that are the subject of such request or that are issuable
upon exchange of the Debentures that are the subject of such request (each, a
"Newco Demand Registration").
(ii).....The Holders of at least 20% of the outstanding Registrable
Securities (other than Company Shares) may also require, with the prior written
consent of XL (so long as XL owns at least 20% of the outstanding Registrable
Securities (other than Company Shares) at such time), the Company to distribute
up to 20% of the Common Stock of Newco owned by the Company to the holders of
Common Stock of the Company in order to create a liquid trading market for such
Common Stock of Newco.
(c) (i) In connection with a Company Demand Registration made pursuant
to Section 2.1(a), the Company shall:
(A) within ten (10) days of the receipt thereof, give written notice
of such request to all Holders of Company Securities; and
(B) file as soon as practicable, and in any event within ninety (90) days
of the receipt of such request, a registration statement under the Act
covering all Company Securities constituting Registrable Securities
(subject to the limitations of Section 2.1(d) and subject to the
provisions of Section 2.6), which the Holders of the ap-
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plicable Company Security request to be registered, within twenty (20) days
of the mailing of such notice by the Issuer in accordance with Section 4.6.
(ii) In connection with a Newco Demand Registration made pursuant to
Section 2.1(b), Newco shall:
(A) within ten (10) days of the receipt thereof, give written notice of
such request to all Holders of Newco Securities; and
(B) file as soon as practicable, and in any event within ninety (90) days
of the receipt of such request, a registration statement under the Act
covering all Newco Securities constituting Registrable Securities
(subject to the limitations of Section 2.1(d) and subject to the
provisions of Section 2.6), which the Holders of the applicable Newco
Security request to be registered; within twenty (20) days of the
mailing of such notice by the Issuer in accordance with Section 4.6.
(d) If the Holders initiating a registration request pursuant to
Section 2.1(a) and (b) (any such Holders, the "Initiating Holders") intend to
distribute the applicable Registrable Securities covered by their request by
means of an underwriting, they shall so advise the applicable Issuer as a part
of their request made pursuant to Section 2.1(a) or (b), as the case may be, and
such Issuer shall include such information in the applicable written notice
referred to in Section 2.1(c)(i)(A) or 2.1(c)(ii)(A). The managing underwriter
will be selected by the majority in interest of the Initiating Holders and shall
be reasonably acceptable to the applicable Issuer, or, if such Initiating
Holders so direct, the applicable Issuer shall select the managing underwriter,
which shall be reasonably acceptable to the Initiating Holders. In any such
event, the right of any Holder to include such Holder's Registrable Securities
in such registration shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting (unless otherwise mutually agreed by a majority in interest of
the Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement, a custody agreement and a power of
attorney, each in customary form with the underwriter or underwriters selected
for such underwriting and deliver an opinion of counsel in customary form to
such underwriter or underwriters.
(e) Notwithstanding the foregoing, if the applicable Issuer shall
furnish to Holders requesting a registration statement pursuant to this Section
2.1 a certificate signed by
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the president or chief executive officer of the applicable Issuer stating that
in the good faith judgment of its board of directors it would be materially
adverse to such Issuer and its security holders for such registration statement
to be filed at that time and it is therefore essential to defer the filing of
such registration statement, or the filing of such registration statement would
materially interfere with or otherwise adversely affect in any material respect
any financing, acquisition, corporate reorganization or other material
transaction or development involving such Issuer, such Issuer shall have the
right to defer such filing for a period of not more than 90 days after receipt
of the request of the Initiating Holders; provided, however, that each Issuer
may utilize this right no more than once in any twelve-month period.
(f) Notwithstanding anything else in this Agreement to the contrary,
neither Issuer shall be obligated to effect, or to take any action to effect,
any Demand Registration pursuant to this Section 2.1 for an Initiating Holder
(other than an Initiating Holder that (x) holds at least $15.0 million in
principal amount of Debentures or 13.0% of the then outstanding Company Shares
and (y) has not previously initiated a Demand Registration) after the Issuers
have, in the aggregate, effected three (3) Demand Registrations pursuant to this
Section 2.1 and such Demand Registrations have been declared or ordered
effective; provided, however, that such registrations remain effective under the
Act until the earlier of (x) an aggregate of 120 days after the effective date
thereof or (y) the consummation of the distribution by the Holders participating
in such registration of all of the Registrable Securities covered thereby;
provided, further, that a registration shall not constitute a Demand
Registration if (A) after such Demand Registration has become effective such
registration or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for any
reason not attributable to the Initiating Holders and such interference is not
thereafter eliminated or (B) the conditions specified in the underwriting
agreement, if any, entered into in connection with such Demand Registration are
not satisfied or waived (other than any conditions, the satisfaction of which is
solely within the control of the selling Holders).
(g) A registration will not count as a Demand Registration until it
has become effective (unless the Initiating Holders withdraw the Registrable
Securities or if such failure to become effective results solely from the
failure of the Initiating Holders to fulfill an obligation or satisfy a
condition under this Agreement, in which cases such demand will count as a
Demand Registration unless the Initiating Holders agree to pay all expenses of
such registration (as described in Section 2.5)). Except as provided above, the
Company will pay all expenses in connection with any registration initiated as a
Demand Registration, whether or not it becomes effective.
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2.2 Piggyback Registration.
(a) Debentures. If either Issuer proposes to register (including for
this purpose a registration effected by the applicable Issuer for security
holders other than the Holders) any debt securities solely for cash, then the
applicable Issuer shall, at such time, promptly give each Holder of Company
Debentures or Newco Debentures, as the case may be, written notice of such
registration setting forth the date on which such Issuer proposes to file such
registration statement (which date shall be no earlier than 20 days from the
date of such notice). Upon the written request of any such Holder given within
twenty (20) days after mailing of such notice by such Issuer in accordance with
Section 4.6, the applicable Issuer shall cause to be registered under the Act
and include in the same registration statement all of the Company Debentures or
Newco Debentures, as the case may be, that each such Holder has requested to be
registered and take any and all other actions reasonably necessary under United
States federal or state laws or otherwise to permit such Holders to effect the
proposed sale or other disposition of the Company Debentures or Newco
Debentures, as the case may be.
(b) Company/Newco Shares. If either Issuer proposes to register any of
its Common Stock or Common Stock Equivalents under the Act in connection with
the public offering of Common Stock or Common Stock Equivalents solely for cash,
then such Issuer shall, at such time, promptly give each Holder of Company
Shares or Newco Shares, as the case may be, written notice of such registration
setting forth the date on which such Issuer proposes to file such registration
statement (which date shall be no earlier than 20 days from the date of such
notice). Upon the written request of any such Holder given within twenty (20)
days after mailing of such notice by such Issuer in accordance with Section 4.6,
such Issuer shall cause to be registered under the Act and include in the same
registration statement all of the Company Shares or Newco Shares, as the case
may be, that each such Holder has requested to be registered and take any and
all other actions reasonably necessary under United States federal or state laws
or otherwise to permit such Holders to effect the proposed sale or other
disposition of the Company Shares or Newco Shares, as the case may be.
2.3 Obligations of the Issuers. Whenever required under this Section 2 to
effect the registration of any Registrable Securities, the applicable Issuer
shall promptly:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and keep such registration
statement effective for a period of up to one hundred twenty (120) days or
until the distribution contemplated in the Regis-
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tration Statement has been completed; provided, however, that before filing
any such registration statement or amendments thereto, the applicable
Issuer will furnish to the Holders of Registrable Securities proposed to be
included in any such registration statement copies of all such documents
proposed to be filed and afford such Holders a reasonable opportunity to
comment thereon;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered by such
registration statement;
(c) furnish to the Holders of Registrable Securities proposed to be
included in any such registration statement such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities
owned by them;
(d) use its best efforts to register and qualify the securities
covered by such registration statement under the securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided, however, that the Issuer shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdictions;
(e) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement in usual and
customary form with the managing underwriter of such offering and, in
connection therewith, the applicable Issuer shall cooperate with the
managing underwriter and shall attend such meetings and travel to such
places to aid in the marketing of such underwritten public offering as the
underwriters may reasonably request;
(f) notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing;
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(g) use its best efforts to cause all such Registrable Securities
registered pursuant hereunder to be listed on each securities exchange on
which similar securities issued by the applicable Issuer are then listed;
(h) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of
such registration statement;
(i) in the event of an underwritten public offering, use its best
efforts to obtain, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 2, (i) an opinion, dated
such date, of the counsel representing the applicable Issuer for the
purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter, dated such date, from the
independent certified public accountants of the applicable Issuer, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities; and
(j) take such other customary and reasonable actions as the Holders of
a majority of the Registrable Securities to be included in such
registration statement or the underwriters, if any, reasonably request in
order to facilitate the distribution of such Registrable Securities.
2.4 Furnish Information. It shall be a condition precedent to the
obligations of the applicable Issuer to take any action pursuant to this Section
2 with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to such Issuer such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of such
Registrable Securities as shall be reasonably required to effect the
registration of such Holder's Registrable Securities.
2.5 Expenses of Registration. All expenses (other than underwriting
discounts and commissions) incurred in connection with registrations, filings or
qualifications pursuant to Section 2.1 or 2.2, including (without limitation)
all registration, filing and qualification fees, SEC and state "Blue Sky"
filings, printers' and accounting fees (including the cost of "cold comfort"
letters, if required), fees and disbursements of counsel for the applicable
Issuer
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and the reasonable fees and disbursements of one counsel for the Holders of
Registrable Securities (selected by the Holders of a majority of Registrable
Securities to be registered) included in each registration made pursuant to this
Agreement shall be borne by such Issuer; provided, however, that such Issuer
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to Section 2.1 if the registration request is subsequently
withdrawn or the registration statement does not become effective, in each case,
in the circumstances described in Section 2.1(g) (in which case all
participating Holders shall severally and proportionately bear such expenses),
unless the Requisite Holders agree to forfeit their right to one (1) demand
registration right pursuant to Section 2.1(g).
2.6 Underwriting Requirements. (a) In connection with any offering
involving an underwriting of Registrable Securities, such Issuer shall not be
required under Section 2.2 to include any Registrable Securities of a Holder in
such underwriting unless such Holder accepts the terms of the underwriting as
agreed upon between the applicable Issuer and the underwriters; provided,
however, that under no circumstances will any Holder be obligated to make
representations or provide indemnities except with respect to information
reasonably required to be furnished pursuant to Section 2.4.
(b) With respect to a registration pursuant to Section 2.1, if the total
amount of securities, including Registrable Securities, requested by security
holders to be included in such offering exceeds the amount of securities that
the managing underwriters with respect to such registration determine in their
sole discretion is compatible with the success of the offering, then the
applicable Issuer shall be required to include in the offering only that number
of such securities which the managing underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the Holders according to the total
amount of securities entitled to be included therein owned by each such Holder
or in such other proportions as shall be mutually agreed to by such Holders);
provided, however, that in no event shall any Registrable Securities proposed to
be included in any registration be excluded from such offering if the securities
of any selling security holder other than a Holder of Registrable Securities or
any securities offered by either Issuer are included.
(c) With respect to a registration pursuant to Section 2.2, if the
total amount of securities, including Registrable Securities, requested by
security holders to be included in such offering exceeds the amount of
securities that the managing underwriters with respect to such registration
determine in their sole discretion is compatible with the success of the
offering, then the applicable Issuer shall be required to include in the
offering only that number of such securities which the managing underwriters
determine in their sole discretion
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will not jeopardize the success of the offering (the securities so included to
be apportioned pro rata among the applicable Issuer and the selling security
holders, including the Registrable Securities, according to the total amount of
securities entitled to be included therein owned by each such selling security
holder or in such other proportions as shall mutually be agreed to by such
selling security holders).
2.7 Indemnification. In the event any Registrable Securities are included
in a registration statement under this Section 2:
(a) To the extent permitted by law, each Issuer will indemnify and
hold harmless each selling Holder, and each officer, director, employee,
affiliate and each person, if any, who controls such Holder within the
meaning of the Act or the 1934 Act (any of the foregoing persons, an
"Indemnified Party"), against any losses, claims, damages, or liabilities
(joint or several) to which they may become subject under the Act, or the
1934 Act or other federal or state securities law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Issuer of
the Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, or the 1934 Act or any state securities law; and
the applicable Issuer will pay to each Indemnified Party, as incurred, any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 2.7(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the applicable Issuer (which consent shall not be
unreasonably withheld or delayed). Nor shall any Issuer be liable in any
such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is directly based upon a Violation which
occurs in reliance upon and in conformity with written information
reasonably required by Section 2.4 furnished for use in connection with
such registration by any Indemnified Party, or which results from the
failure of an Indemnified Party to deliver a final, amended or supplemental
prospectus furnished an Indemnified Party and required to be delivered if
the Violation would not have occurred if the delivery had been made.
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(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the applicable Issuer, each of its directors, officers,
employees and affiliates, and each person, if any, who controls the
applicable Issuer within the meaning of the Act or the 1934 Act, any other
Holder selling securities in such registration statement and any
controlling person of any such other Holder (any of the foregoing persons,
an "Indemnified Person(s)"), against any losses, claims, damages or
liabilities (joint or several) to which any of such Indemnified Persons may
become subject under the Act, or the 1934 Act or other federal or state
securities law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are directly based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written
information reasonably required by Section 2.4 furnished by such Holder for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any such
Indemnified Person in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 2.7(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld or delayed. Nor shall such
Holder be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which results from the failure of any Indemnified Person to
deliver a final, amended or supplemental prospectus furnished to any
Indemnified Person, and required to be delivered, if the Violation would
not have occurred if the delivery had been made; provided, however, that in
no event shall any indemnity under this Section 2.7(b) exceed the gross
proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
2.7 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section 2.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually and reasonably satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified
parties which may be represented without conflict by one counsel) shall
have the right to retain one separate counsel, reasonably acceptable to the
indemnifying party, with the reasonable fees and expenses of such counsel
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be
inappropriate due to
-15-
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action, if prejudicial to its ability
to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 2.7, but the omission
so to deliver written notice to the indemnifying party will not relieve the
indemnifying party of any liability that the indemnifying party may have to
any indemnified party otherwise under this Section 2.7.
(d) If the indemnification provided for in this Section 2.7 is held by
a court of competent jurisdiction to be unavailable to an indemnified party
or is insufficient to hold any indemnified party harmless with respect to
any loss, liability, claim, damage, or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative
benefits received by the indemnified party on the one hand and the
indemnifying party on the other, and the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and
of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control; provided, however, that any party hereto who is
adversely affected thereby has consented in writing to such provisions in
the underwriting agreement.
(f) The obligations of the Issuers and the Holders under this Section
2.7 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Section 2, and otherwise.
-16-
2.8 Termination of Registration Rights. This Agreement (other than the
provisions of Sections 2.7, 2.9, 3, 4.6 and 4.7) shall terminate and be of no
further force and effect on the first date on which no Registrable Securities
are outstanding.
2.9 "Lock-Up" Agreement. Each Issuer hereby acknowledges and agrees that
for a period of 90 days after any date upon which any Holders have made a
Company Demand Registration and for a period of 180 days after any date upon
which any Holders have made a Newco Demand Registration, it shall not (i) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, in respect of any of its debt securities or capital
stock, or any securities convertible into or exercisable or exchangeable
therefor or (ii) enter into any swap, option, future, forward or other agreement
that transfers, in whole or in part, any of the economic consequences of
ownership of such securities, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of such securities, in cash or
otherwise or (iii) file or cause to become effective any registration statement
under the Act other than that related solely to a Demand Registration, in each
case, other than such securities to be sold pursuant to the Securities Purchase
Agreement and other than any securities issued pursuant to an employee benefit
or employee stock option plan of the Issuer.
3. Indenture. Upon registration of any Debentures pursuant to this
Agreement, the applicable Issuer will provide a trust indenture (the
"Indenture") with an independent institutional trustee meeting the qualification
requirements under the Trust Indenture Act of 1939, as amended. The Indenture
shall govern the terms of the Debentures so registered and contain terms
substantially identical to the terms of the Debentures so registered.
4. Miscellaneous.
4.1 Amendments; Waivers. The provisions of this Agreement may be modified
or amended, and waivers and consents to the performance and observance of the
terms hereof may be given, only by written instrument executed and delivered by
each of the Company, Newco (if then a signatory) and the Requisite Holders;
provided, however, that any modification or amendment which adversely affects
the rights of any Holder shall require the consent of such Holder unless the
modification or amendment adversely affects the rights of all Holders in the
same manner. The failure at any time to require performance of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter (unless performance thereof has been waived in accordance with
the terms hereof for all pur-
-17-
poses and at all times by the party to whom the benefit of such performance is
to be rendered). The waiver by any party to this Agreement of a breach of any
provision hereof shall not be taken or held to be a waiver of any succeeding
breach of such provision or any other provision or as a waiver of the provision
itself.
4.2 After-Acquired Shares. All provisions of this Agreement shall apply to
all securities and instruments (i) received by a Holder as a dividend on or
other payment made to holders of shares of capital stock of the Company, or (ii)
issued in connection with a split of shares of capital stock of the applicable
Issuer, or as a result of any exchange for or reclassification of shares of
capital stock of the applicable Issuer, or a reorganization, recapitalization
consolidation or merger.
4.3 Successors and Assigns. This Agreement and all covenants and agreements
contained in this Agreement by or on behalf of the parties hereto shall bind,
and inure to the benefit of, the respective successors and permitted assigns of
the parties hereto.
4.4 Rights and Obligations of Transferees. If a Holder transfers any or all
of its Registrable Securities to any person in accordance with the terms of the
Debentures and the Securities Purchase Agreement, such person and each
subsequent transferee shall have the same rights hereunder as are given to such
Holder, and shall be subject to the same obligations as are imposed upon such
Holder by the terms hereof (and all references herein to a Holder shall include
such transferee), unless otherwise provided herein. Any such transferee shall
execute and deliver to the applicable Issuer an instrument acknowledging such
transferee's rights and obligations hereunder to be consistent with this Section
4.4.
4.5 Further Assurances. (a) Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable legal requirements, to
consummate and make effective the transactions contemplated by this Agreement.
(b) If at any time after the closing any further action is necessary
or reasonably desirable to carry out the purposes of this Agreement, the parties
hereto shall take or cause to be taken all such necessary or convenient action
and execute, and deliver and file, or cause to be executed, delivered and filed,
all necessary or convenient documentation.
-18-
(c) Each of the Issuers agrees that after the date of this Agreement,
it shall not grant any Person registration rights other than piggyback
registration rights which are subordinate to the Holders hereunder with respect
to any class of debt or equity security of the Issuers without the consent of
the Requisite Holders, which consent shall not be unreasonably withheld.
4.6 Notices. All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three Business Days after mailing (two Business Days in the case of
express mail or overnight courier service), as follows:
(i) If to the Company:
Mutual Risk Management Ltd.
00 Xxxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Xxxxxxxxx: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-19-
(ii) If to the Purchasers:
XL Insurance Ltd
c/o XL Capital Ltd.
XL Xxxxx
Xxx Xxxxxxxxxx Xxxx
Xxxxxxxx XX 00
Xxxxxxx
Xxxxxxxxx: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
First Union Merchant Banking 2001, LLC
One First Union Center - 12th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
High Ridge Capital Partners II, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Century Capital Partners II, L.P.
c/o Century Capital Management Inc.
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Taracay Investors Company
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
-20-
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) If to the RHINOS Debenture Holders:
Intrepid Funding Master Trust
c/o Wilmington Trust Company,
as Owner-Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4.7 Governing Law; Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
ANY DISPUTE UNDER THIS AGREEMENT THAT IS NOT SETTLED BY MUTUAL CONSENT SHALL BE
FINALLY ADJUDICATED BY ANY FEDERAL OR STATE COURT SITTING IN THE CITY, COUNTY
AND STATE OF NEW YORK, AND THE ISSUER CONSENTS TO THE EXCLUSIVE JURISDICTION OF
SUCH COURTS (OR ANY APPELLATE COURT THEREFROM) OVER ANY SUCH DISPUTE. EACH OF
THE COMPANY AND NEWCO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN NEW YORK COUNTY IN
CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY
OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF
PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH
OF THE COMPANY AND NEWCO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
-21-
4.8 Severability; Interpretation. If any provision in this Agreement is
agreed by the parties hereto to be, is deemed to be or becomes invalid, illegal,
void or unenforceable under any law that is applicable hereto, (i) such
provision will be deemed amended to conform to applicable laws so as to be valid
and enforceable or, if it cannot be so amended without materially altering the
intention of the parties hereto, it will be deleted, with effect from the date
of such agreement or such earlier date as the parties hereto may agree, and (ii)
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be impaired or affected in any way.
4.9 Table of Contents; Headings. The table of contents and section headings
herein are for convenience only and shall not affect the construction hereof.
4.10 Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto relating to the subject matter hereof and supersedes
any and all prior oral or written agreements, representations or warranties,
contracts, understandings, correspondence, conversations and memoranda, whether
written or oral, between the parties hereto, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest, with respect to the subject matter hereof.
4.11 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties other than Newco and delivered to the other party.
4.12 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and the Holders and is not intended to confer any
benefit upon any other person or entity or infringe upon any rights or remedies,
except as contemplated in this Section 4.
4.13 Execution by Newco. Promptly after the formation of Newco, the Company
will cause Newco to execute and deliver a counterpart to this Agreement by
signing in the space provided on the signature page hereof, pursuant to which
Newco shall, by so executing this Agreement, become a party to this Agreement as
if Newco were an original party hereto and upon which this Agreement shall
constitute a valid and binding agreement of Newco, enforceable in accordance
with its terms.
-22-
[Signature Pages Follow]
-23-
IN WITNESS WHEREOF, the parties hereto have executed this Debentures
Registration Rights Agreement as of the date first above written.
MUTUAL RISK MANAGEMENT LTD.
By: /s/ Xxxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Secretary
XL INSURANCE LTD
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: President & Chief Executive Officer
FIRST UNION MERCHANT BANKING 2001, LLC
By: /s/ Xxxxxxxxx X. Xxxxxx, XX
------------------------------------------
Name: Xxxxxxxxx X. Xxxxxx, XX
Title: Partner
-24-
HIGH RIDGE CAPITAL PARTNERS II, L.P.
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: President, Liberty Street Corp.,
as general partner of Liberty Street
Partners, LP,
as member of High Ridge XX XX LLC,
as general partner of High Ridge
Capital Partners II, L.P.
CENTURY CAPITAL PARTNERS II, L.P.
By: CCP CAPITAL II LLC, its general partner
By: /s/ Xxxxx Xxxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Managing Member
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx
TARACAY INVESTORS COMPANY
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title:
-25-
INTREPID FUNDING MASTER TRUST
By: /s/ Xxxx Xxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxx Xxxxxxx
Title: Senior Fianncial Services Officer
