EXHIBIT B
[FORM OF REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT]
REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT
This REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT, dated as of _________
(this "Agreement"), is made among Scottish Re Group Limited, an exempted company
limited by shares organized and existing under the laws of the Cayman Islands
(the "Company"), MassMutual Capital Partners LLC, a Delaware limited liability
company ("MassMutual"), SRGL Acquisition, LLC ("Cerberus"; and together with
MassMutual, the "Investors") and the shareholders of the Company listed on
Schedule 1 hereto (collectively, the "Cypress Shareholders"), each of which
Cypress Shareholders own on the date hereof, beneficially and as of record, the
number of Ordinary Shares set forth opposite such Cypress Shareholder's name on
Schedule 1 hereto.
RECITALS:
A. The Company has agreed to issue and sell, and the Investors have agreed
to purchase, pursuant to the Securities Purchase Agreement, dated as of November
26, 2006 (the "Securities Purchase Agreement"), by and among the Company and the
Investors, an aggregate of 1,000,000 shares of 7.25% convertible cumulative
participating preferred shares, par value $0.01 per share, of the Company (the
"Convertible Shares").
B. In satisfaction of certain conditions to the obligations of the parties
to the Securities Purchase Agreement, the parties are entering into this
agreement.
C. Capitalized terms used in this Agreement and not otherwise defined are
used as defined in Section 15.
Now, therefore, the parties hereto agree as follows:
1. Demand Registrations.
(a) Requests for Registration. At any time following the date hereof, the
Required Investor Holders, or at any time following the earlier of (i) two years
from the date hereof, or (ii) the date of the completion of the audit of the
Company's financial statements for the fiscal year ended December 31, 2007, the
Required Cypress Holders, may request in writing that the Company effect the
registration (a "Demand Registration") of all or any part of the Registrable
Securities held by such Required Investor Holders or Required Cypress Holders,
as the case may be, specifying the intended method of disposition thereof (a
"Registration Request") by filing with the Commission a Demand Registration
Statement. Promptly after its receipt of any Registration Request, but no later
than 10 days after receipt of such Registration Request, the Company will give
written notice of such request to all other Holders, and will use its reasonable
best efforts to register, as expeditiously as practicable following a
Registration Request in accordance with the provisions of this Agreement, all
Registrable Securities
(subject to any reduction pursuant to Section 1(f)) that have been requested to
be registered by the Initiating Holders in the Registration Request or by any
other Holders by written notice to the Company given within 30 days after the
date the Company has given such Holders notice of the Registration Request to
the extent necessary to permit the disposition of such Registrable Securities so
to be registered in accordance with the intended methods of disposition thereof
specified in such Registration Request or further requests (including, without
limitation, only with respect to a Registration request of the Required Investor
Holders, by means of a shelf registration pursuant to Rule 415 under the
Securities Act (a "Shelf Registration") if so requested and if the Company is
then eligible to use such a registration). The Company shall use its reasonable
best efforts to have such Demand Registration Statement declared effective by
the Commission as soon as practicable after the filing thereof and to keep such
Demand Registration Statement continuously effective for the period specified in
Section 3. Notwithstanding anything in this Section 1(a) to the contrary, the
Company will not be required to effect a registration pursuant to this Section
1(a) unless the aggregate gross proceeds resulting from such Demand Registration
could reasonably be expected to equal or exceed (x) $50,000,000, in the case of
a Demand Registration initiated by the Required Investor Holders, or (y) the
lesser of (1) $25,000,000 or (2) all of the Registrable Securities then held by
the Cypress Shareholders in the aggregate, in the case of the Required Cypress
Holders. The Company will pay all Registration Expenses incurred in connection
with any registration pursuant to this Section 1.
(b) Limitation on Demand Registrations. Other than as provided in Section
1(c), the Company will not be obligated to effect or pay the Registration
Expenses of more than three registrations requested by the Required Investor
Holders or one registration requested by the Required Cypress Holders, pursuant
to this Section 1, provided, however that such number shall be increased to the
extent the Company does not include in what would otherwise be the final
registration for which the Company is required to pay Registration Expenses the
number of Registrable Securities requested to be registered by the Holders by
reason of Section 1(f); provided, further, that a request for registration will
not count for the purposes of this limitation if (i) the Majority Holders of the
Registration determine in good faith to withdraw (provided that, if such
registration is a Demand Registration requested by the Required Cypress Holders,
for the purposes of this provision the "Majority Holders of the Registration"
shall mean the Required Cypress Holders) (x) such Registration Request prior to
the filing of a Demand Registration Statement or (y) such Demand Registration
Statement (prior to the effective date of the Demand Registration Statement
relating to such request) due to (1) marketing or regulatory reasons, (2)
because of a material adverse change in the business, financial condition or
prospects of the Company or (3) due to the exercise by the Company of its rights
under Section 1(d) hereof, (ii) the Registration Statement relating to such
request is not declared effective within 180 days of the date such registration
statement is first filed with the Commission (other than solely by reason of
Holders refusing to proceed) and the Majority Holders of the Registration
withdraw such Registration Request prior to the
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effective date of the Demand Registration Statement relating to such request
(provided that, if such registration is a Demand Registration requested by the
Required Cypress Holders, for the purposes of this provision the "Majority
Holders of the Registration" shall mean the Required Cypress Holders), (iii)
prior to the sale of at least 90% of the Registrable Securities included in the
registration relating to such request, such registration is adversely affected
by any stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason and the Company fails to have
such stop order, injunction or other order or requirement removed, withdrawn or
resolved to the reasonable satisfaction of the Majority Holders of the
Registration within 30 days of the date of such order, (iv) more than 10% of the
Registrable Securities requested by the Required Investor Holders or the
Required Cypress Holders, as the case may be, to be included in the registration
are not so included pursuant to Section 1(f), or (v) the conditions to closing
specified in the underwriting agreement or purchase agreement entered into in
connection with the registration relating to such request are not satisfied
(other than as a result of a material default or breach thereunder by the
Required Investor Holders or the Required Cypress Holders, as the case may be).
Notwithstanding the foregoing, the Company will pay all Registration Expenses in
connection with any request for registration pursuant to Section 1(a) regardless
of whether or not such request counts toward the limitation set forth above
until such limit is reached.
(c) Short-Form Registrations.
(i) S-3 Registration. If at any time (i) one or more Holders of
Registrable Securities (including to register the Registrable Securities
registered pursuant to the Cypress Shareholders' one Demand Registration)
request that the Company file a registration statement on Form S-3 or any
successor form thereto for a public offering of all or any portion of the
shares of Registrable Securities held by such Holder or Holders, the
reasonably anticipated aggregate price to the public of which would exceed
$25,000,000, and (ii) the Company is a registrant entitled to use Form S-3
or any successor form thereto to register such securities, then the Company
shall, as expeditiously as practicable following such request, use its
reasonable best efforts to register under the Securities Act on Form S-3 or
any successor form thereto, for public sale in accordance with the intended
methods of disposition specified in such request or any related subsequent
requests (including, without limitation, by means of a Shelf Registration)
the Registrable Securities specified in such Request and any related
subsequent requests; provided, that if such registration is for an
Underwritten Offering, the terms of Sections 1(e) and 1(f) shall
apply (and any reference to "Demand Registration" therein shall, for
purposes of this Section 1(c), instead be deemed a reference to "S-3
Registration"). Whenever the Company is required by this Section 1(c) to
use its reasonable best efforts to effect the registration of Registrable
Securities, each of the procedures and requirements of Section 1(a)
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and 1(g) (including but not limited to the requirements that the Company
(A) notify all Holders of Registrable Securities from whom such request -
for registration has not been received and provide them with the
opportunity to participate in the offering and (B) use its reasonable best
efforts to have such S-3 Registration Statement declared and - remain
effective for the time period specified herein) shall apply to such
registration (and any reference in such Sections 1(e) and 1(f) to "Demand
Registration" shall, for purposes of this Section 1(c)(i), instead be
deemed a reference to "S-3 Registration"). Notwithstanding anything to the
contrary contained herein, no request may be made under this Section 1(c)
within 90 days after the effective date of a Registration Statement filed
by the Company covering a firm commitment Underwritten Offering in which
the Holders of Registrable Securities shall have been entitled to join
pursuant to this Agreement in which there shall have been effectively
registered all shares of Registrable Securities as to which registration
shall have been requested (subject to any reduction pursuant to Section
1(f)). There is no limitation on the number of S-3 Registrations that the
Company is obligated to effect. The Company will pay all Registration
Expenses incurred in connection with any S-3 Registration.
(ii) Shelf Registration. If a request made pursuant to Section 1(a) or
1(c) (other than such a request by the Cypress Shareholders) is for a Shelf
Registration, the Company shall use its reasonable best efforts to keep the
Shelf Registration continuously effective through the date on which all of
the Registrable Securities covered by such Shelf Registration may be sold
pursuant to Rule 144(k) under the Securities Act (or any successor
provision having similar effect); provided, however, that prior to the
termination of such Shelf Registration, the Company shall
first furnish to each Holder of Registrable Securities participating in
such Shelf Registration (i) an opinion, in form and substance satisfactory
to the - Majority Holders of the Registration, of counsel for the Company
satisfactory to the Majority Holders of the Registration stating that such
Registrable Securities are freely saleable pursuant to Rule 144(k) under
the Securities Act (or any successor provision having similar effect) or
(ii) a "No-Action Letter" -- from the staff of the SEC stating that the SEC
would not recommend enforcement action if the Registrable Securities
included in such Shelf Registration were sold in a public sale other than
pursuant to an effective registration statement.
(d) Restrictions on Demand Registrations. The Company may postpone for a
reasonable period of time, not to exceed 90 days, the filing of a Prospectus or
the effectiveness of a Registration Statement for a Demand Registration or S-3
Registration if the Company furnishes to the Holders a certificate signed by the
Chief Executive Officer of the Company, following consultation with, and after
obtaining the good faith approval of, the board of directors (the "Board") of
the Company, stating that the Company believes that such Demand Registration or
S-3 Registration would have a material
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adverse effect on any proposal by the Company to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger,
amalgamation, consolidation, tender offer, scheme of arrangement or similar
transaction, or otherwise would require disclosure of a material corporate
development that the Company is not otherwise required to disclose, and which
disclosure would be detrimental to the Company and its shareholders or would
have a material adverse effect on the business, assets, operations, prospects or
financial condition of the Company. The Company may only delay a Demand
Registration or an S-3 Registration pursuant to this Section 1(d) by delivery of
a Blackout Notice (as defined below) within 30 days of delivery of the request
for such Registration under Section 1(a) or (c), as applicable, and may delay a
Demand Registration or an S-3 Registration and require the Holders of
Registrable Securities to discontinue the disposition of their securities
covered by a Shelf Registration only for a reasonable period of time not to
exceed 90 days (or such earlier time as such transaction is consummated or no
longer proposed) (the "Blackout Period"). There shall not be more than two
Blackout Periods in any 12 month period and the aggregate length of such
Blackout Periods shall not exceed 90 days in any 12 month period. The Company
shall promptly notify the Holders in writing (a "Blackout Notice") of any
decision to postpone a Demand Registration or an S-3 Registration or to
discontinue sales of Registrable Securities covered by a Shelf Registration
pursuant to this Section 1(d) and shall include a general statement of the
reason for such postponement, an approximation of the anticipated delay and an
undertaking by the Company promptly to notify the Holders as soon as a Demand
Registration or an S-3 Registration may be effected or sales of Registrable
Securities covered by a Shelf Registration may resume. If the Company shall
postpone the filing of a Demand Registration Statement or an S-3 Registration
Statement, the Majority Holders of the Registration who were to participate
therein shall have the right to withdraw the request for registration (provided
that, if such registration is a Demand Registration requested by the Required
Cypress Holders, for the purposes of this provision the "Majority Holders of the
Registration" shall mean the Required Cypress Holders). Any such withdrawal
shall be made by giving written notice to the Company within 30 days after
receipt of the Blackout Notice. Such withdrawn registration request shall not be
treated as a request for a Demand Registration effected pursuant to Section 1(a)
(and shall not be counted towards the number of Demand Registrations effected),
and the Company shall pay all Registration Expenses in connection therewith.
(e) Selection of Underwriters. If the Initiating Holders holding a majority
of the Registrable Securities for which registration was requested intend to
distribute the Registrable Securities covered by their Registration Request by
means of an Underwritten Offering, they will so advise the Company as a part of
the Registration Request, and the Company will include such information in the
notice sent by the Company to the other Holders with respect to such
Registration Request and the offering of such Registrable Securities pursuant to
such Demand Registration shall be in the form of a firm commitment Underwritten
Offering. In such event, the Initiating Holders holding a majority of the
Registrable Securities for which registration was requested will
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have the right to select the Underwriters or other investment banker(s) and
manager(s) to administer the offering, subject to the Company's approval which
will not be unreasonably withheld, conditioned or delayed. If the offering is an
Underwritten Offering, the Company will use reasonable best efforts to ensure
that the right of any Person (including other Holders) to participate in such
registration will be conditioned upon such Person's participation in such
underwriting at the same price and on the same terms of underwriting applicable
to the Initiating Holders and the inclusion of such Person's Registrable
Securities in the Underwritten Offering (unless otherwise agreed by the Majority
Holders of the Registration), and each such Person will (together with the
Company and the other Holders distributing their securities through such
Underwritten Offering) enter into an underwriting agreement in customary form
with the Underwriter or Underwriters selected for such Underwritten Offering. If
any Holder disapproves of the terms of the Underwritten Offering, such Holder
may elect to withdraw therefrom by written notice to the Company, the managing
Underwriter and the Majority Holders of the Registration.
(f) Priority on Demand Registrations. The Company will not include in any
underwritten registration pursuant to Sections 1(a) or (c) any securities that
are not Registrable Securities without the prior written consent of the
Initiating Holders holding a majority of the Registrable Securities for which
registration was requested. Other than in connection with a Shelf Registration,
if the managing Underwriter advises the Company that in its opinion the number
of Registrable Securities (and, if permitted hereunder, other securities
requested to be included in such offering) exceeds the number of securities that
can be sold in such offering without materially adversely affecting the
successful marketability of the offering (including a material adverse effect on
the per share offering price), the Company will include in such offering only
such number of securities that in the opinion of such Underwriters can be sold
without materially adversely affecting the successful marketability of the
offering, which securities will be so included in the following order of
priority: (A) if such registration is requested by the Required Investor
Holders, (i) first, Registrable Securities, pro rata among the respective
Holders thereof on the basis of the aggregate number of Registrable Securities
requested to be included in such registration by each of them, and (ii) second,
any other securities of the Company that have been requested to be so included;
and (B) if such registration is requested by the Required Cypress Holders, (i)
first, Registrable Securities, pro rata among the respective Holders thereof
that are Cypress Shareholders on the basis of the aggregate number of
Registrable Securities requested to be included in such registration by each of
them, (ii) second, Registrable Securities, pro rata among the respective other
Holders thereof that on the basis of the aggregate number of Registrable
Securities requested to be included in such registration by each of them, and
(iii) third, any other securities of the Company that have been requested to be
so included. Notwithstanding the foregoing, no employee of the Company or any
subsidiary thereof will be entitled to participate, directly or indirectly, in
any such registration to the extent that the managing Underwriter determines in
good faith that the participation of such employee in such registration
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would adversely affect the marketability or offering price of the securities
being sold in such registration. In the event the Company shall not, by virtue
of this Section 1(f), include in any Demand Registration all of the Registrable
Securities of any Holder requesting to be included in such Demand Registration,
such Holder may, upon written notice to the Company given within five days of
the time such Holder first is notified of such matter, reduce the amount of
Registrable Securities it desires to have included in such Demand Registration,
whereupon only the Registrable Securities, if any, it desires to have included
will be so included and the Holders not so reducing shall be entitled to a
corresponding increase in the amount of Registrable Securities to be included in
such Demand Registration.
(g) Registration of Other Securities. Whenever the Company shall effect a
Demand Registration, no securities other than the Registrable Securities shall
be covered by such registration unless the Majority Holders of the Registration
shall have consented in writing to the inclusion of such other securities
(provided that, if such registration is a Demand Registration requested by the
Required Cypress Holders, for the purposes of this provision the "Majority
Holders of the Registration" shall mean the Required Cypress Holders).
(h) Registration Statement Form. Registrations under this Section 1 shall
be on such appropriate registration form of the Commission (i) as shall be
selected by the Initiating Holders holding a majority of the Registrable
Securities for which registration was requested in the Registration Request, and
(ii) which shall be available for the sale of Registrable Securities in
accordance with (A) the intended method or methods of disposition specified in
the requests for registration and (B) applicable law. The Company agrees to
consult with any selling Holder with respect to any information which such
selling Holder, upon advice of counsel, has reasonably requested to be included
in such Registration Statement.
(i) Conversions; Exercises. Notwithstanding anything to the contrary
herein, in order for any Registrable Securities that are issuable upon the
exercise of conversion rights, options or warrants to be included in any
registration pursuant to Section 1 or 2 hereof, the exercise of such conversion
rights, options or warrants must be effected no later than immediately prior to
the closing of any sales under the Registration Statement pursuant to which such
Registrable Securities are to be sold.
(j) Exclusive Rights. The registration rights granted pursuant to the
provisions of this Section 1 shall be in addition to the registration rights
granted pursuant to the other provisions of Section 2 hereof.
2. Piggyback Registrations.
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(a) Right to Piggyback. Whenever the Company proposes to register any of
its securities (including in response to a demand of a shareholder not party
hereto, but excluding a registration pursuant to Section 1, relating solely to
employee benefit plans, or relating solely to the sale of debt or convertible
debt instruments) and the registration form to be filed may be used for the
registration or qualification for distribution of Registrable Securities, the
Company will give prompt written notice to all Holders of its intention to
effect such a registration and will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within fifteen (15) days after the date of the Company's
notice (a "Piggyback Registration"). Any Holder that has made such a written
request may withdraw its Registrable Securities from such Piggyback Registration
by giving written notice to the Company and the managing Underwriter, if any, on
or before the thirtieth (30th) day prior to the planned effective date of such
Piggyback Registration. The Company may delay, terminate or withdraw any
registration under this Section 2 prior to the effectiveness of such
registration, whether or not any Holder has elected to include Registrable
Securities in such registration, and except for the obligation to pay
Registration Expenses pursuant to Section 2(c) the Company will have no
liability to any Holder in connection with such delay, termination or
withdrawal; provided, however, that if such delay shall extend beyond 120 days
from the date the Company received a request to include Registrable Securities
in such Piggyback Registration, then the Company shall again give all Holders
the opportunity to participate therein and shall follow the notification
procedures set forth in this Section 2(a). There is no limitation on the number
of such Piggyback Registrations pursuant to this Section 2 which the Company is
obligated to effect. The registration rights granted pursuant to the provisions
of this Section 2 shall be in addition to the registration rights granted
pursuant to the other provisions of Section 1 hereof.
(b) Underwritten Registration. If any Piggyback Registration involves an
Underwritten Offering, the Company will so advise the Holders as a part of the
written notice given pursuant to Section 2(a). In such event, the Company will
use reasonable best efforts to ensure that the right of any Holder to
registration pursuant to this Section 2 will be conditioned upon such Holder's
participation in such Underwritten Offering and the inclusion of such Holder's
Registrable Securities in the Underwritten Offering, and each such Holder will
(together with the Company and the other Holders distributing their securities
through such Underwritten Offering) enter into an underwriting agreement in
customary form with the Underwriter or Underwriters selected for such
Underwritten Offering by the Company. If any Holder disapproves of the terms of
the Underwritten Offering, such Holder may elect to withdraw therefrom by
written notice to the Company, the managing Underwriter and the Holders
participating in the Underwritten Offering.
(c) Piggyback Registration Expenses. The Company will pay all Registration
Expenses in connection with any Piggyback Registration, whether or not any
registration or Prospectus becomes effective or final.
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(d) Priority on Primary Registrations. If a Piggyback Registration relates
to an underwritten primary offering on behalf of the Company, and the managing
Underwriters advise the Company (a copy of such notice if in writing or prompt
communication of the content of such notice, if oral, to be provided by the
Company to each Holder requesting registration) that in their opinion the number
of securities requested to be included in such registration exceeds the number
which can be sold without materially adversely affecting the successful
marketability of such offering, the Company will include in such registration or
Prospectus only such number of securities that in the opinion of such
Underwriters can be sold without materially adversely affecting the successful
marketability of the offering, which securities will be so included in the
following order of priority: (i) first, the securities the Company proposes to
sell, (ii) second, the Registrable Securities requested to be included in such
registration, pro rata among the Holders of such Registrable Securities on the
basis of the number of Registrable Securities so requested to be included
therein owned by each such Holder, and (iii) third, other securities requested
to be included in such registration; provided, however, that in the event the
Company will not, by virtue of this Section 2(d), include in any such
registration all of the Registrable Securities of any Holder requested to be
included in such registration, such Holder may, upon written notice to the
Company given within three days of the time such Holder first is notified of
such matter, reduce the amount of Registrable Securities it desires to have
included in such registration, whereupon only the Registrable Securities, if
any, it desires to have included will be so included and the Holders not so
reducing shall be entitled to a corresponding increase in the amount of
Registrable Securities to be included in such registration. Notwithstanding the
foregoing, any employee of the Company or any subsidiary thereof will not be
entitled to participate, directly or indirectly, in any such registration to the
extent that the managing Underwriter determines in good faith that the
participation of such employee in such registration would adversely affect the
marketability or offering price of the securities being sold in such
registration.
(e) Priority on Secondary Registrations. If a Piggyback Registration
relates to an underwritten secondary registration on behalf of holders of the
Company's securities other than the Holders of Registrable Securities, and the
managing Underwriters advise the Company (a copy of such notice if in writing or
prompt communication of the content of such notice, if oral, to be provided by
the Company to each Holder requesting registration) that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold without materially adversely affecting the successful
marketability of the offering, the Company will include in such registration
only such number of securities that in the opinion of such Underwriters can be
sold without materially adversely affecting the successful marketability of the
offering, which securities will be so included in the following order of
priority: (i) first, the securities requested to be included therein by the
holders requesting such registration and the Registrable Securities requested to
be included in such registration, pro rata among the holders of such securities
and Registrable Securities on the basis of the
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number of securities so requested to be included therein owned by each such
holder, and (ii) second, other securities requested to be included in such
registration; provided, however, that in the event the Company will not, by
virtue of this Section 2(e), include in any such registration all of the
Registrable Securities of any Holder requested to be included in such
registration, such Holder may, upon written notice to the Company given within
three days of the time such Holder first is notified of such matter, reduce the
amount of Registrable Securities it desires to have included in such
registration, whereupon only the Registrable Securities, if any, it desires to
have included will be so included and the Holders not so reducing shall be
entitled to a corresponding increase in the amount of Registrable Securities to
be included in such registration. Notwithstanding the foregoing, any employee of
the Company or any subsidiary thereof will not be entitled to participate,
directly or indirectly, in any such registration to the extent that the managing
Underwriter determines in good faith that the participation of such employee in
such registration would adversely affect the marketability or offering price of
the securities being sold in such registration.
(f) Other Registrations. If the Company receives a Registration Request or
files a Registration Statement with respect to Registrable Securities pursuant
to Section 1 or Section 2, and if such registration has not been withdrawn or
abandoned, the Company will not file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form S-4 or S-8 or any successor or similar forms), whether on
its own behalf or at the request of any holder or holders of such securities,
from a period beginning on the date of a Registration Request and ending at
least 180 days from the effective date of the effectiveness of such Registration
Statement, and shall not be required to do so notwithstanding any other
provision of this Agreement.
3. Registration Procedures. Subject to Section 1(d), whenever the Holders
of Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will use its reasonable best
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of disposition thereof. Without limiting the
generality of the foregoing, the Company will, as expeditiously as practicable:
(a) prepare and (within 60 days after the end of the thirty-day period
within which requests for registration may be given to the Company pursuant
hereto) file with the Commission a Registration Statement with respect to
such Registrable Securities which Registration Statement shall comply as to
form in all material respects with the requirements of the applicable form
and include all financial statements required by the Commission to be filed
therewith, make all required filings with the National Association of
Securities Dealers, Inc. and thereafter use its reasonable best efforts to
cause such Registration Statement to become effective, provided that before
filing a Registration Statement or any
amendments or supplements thereto, the Company will furnish to the Holders'
Counsel copies of all such documents proposed to be filed, which documents
will be subject to review of such counsel at the Company's expense and the
Company shall provide the Holders' Counsel and any attorney, accountant or
other agent retained by any such seller or any Underwriter (each, an
"Inspector" and, collectively, the "Inspectors") with a reasonable
opportunity, in light of the circumstances, to participate in the
preparation of such Registration Statement and each Prospectus included
therein (and each amendment or supplement thereto or comparable statement)
to be filed with the Commission. Unless such Holders' Counsel has
reasonably objected in writing to the filing of such Registration
Statement, amendment or supplement prior thereto, the Company will file
such Registration Statement, Prospectus, amendment or supplement or
comparable statement as required by this Agreement. The Company will not
file any Registration Statement or amendment or post-effective amendment or
supplement to such Registration Statement to which such Holders' Counsel
has reasonably objected in writing on the grounds that (and explaining why)
such amendment or supplement does not comply in all material respects with
the requirements of the Securities Act or of the rules or regulations
thereunder;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such Registration Statement;
provided, that except with respect to any Shelf Registration, such period
need not extend beyond nine months after the effective date of the
Registration Statement; and provided further, that with respect to any
Shelf Registration, such period need not extend beyond the time period
provided in Section 1(c), and which periods, in any event, shall terminate
when all Registrable Securities covered by such Registration Statement have
been sold (but not before the expiration of the 90 day period referred to
in Section 4(3) of the Securities Act and Rule 174 thereunder, if
applicable);
(c) furnish to each seller of Registrable Securities and each
Underwriter, if any, such number of copies, without charge, of such
Registration Statement, each amendment and supplement thereto, including
each preliminary Prospectus, final Prospectus, all exhibits and other
documents filed therewith and such other documents as such seller may
reasonably request including in order to facilitate the disposition of the
Registrable Securities owned by such seller;
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(d) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller or the sole or lead managing Underwriter, if
any, reasonably requests, to continue such registration or qualification in
effect in each such jurisdiction for as long as such Registration Statement
remains in effect (including through new filings or amendments or renewals)
and do any and all other acts and things that may be necessary or
reasonably advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller
(provided that the Company will not be required to (i) - qualify generally
to do business in any jurisdiction where it would not otherwise be required
to qualify but for this subsection, (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to -- --- general service of process in
any such jurisdiction);
(e) use its reasonable best efforts to cause all Registrable
Securities covered by such Registration Statement to be registered with or
approved by such other governmental agencies, authorities or
self-regulatory bodies as may be necessary or reasonably advisable in light
of the business and operations of the Company to enable the seller or
sellers thereof to consummate the disposition of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof;
(f) promptly notify the Holders' Counsel, the sole or lead managing
Underwriter, if any, and each seller of such Registrable Securities, at any
time when a Registration Statement related thereto is required to be
amended or supplemented or a Prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the
discovery of the happening of any event as a result of which, the
Registration Statement or the Prospectus contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made, and, as promptly as practicable, prepare and furnish to such seller a
reasonable number of copies of a supplement or amendment to such
Registration Statement or Prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such Registration Statement
or Prospectus will not contain an untrue statement of a material fact or
omit to state any fact necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;
(g) notify each seller of any Registrable Securities covered by such
Registration Statement (i) when the Prospectus or any Prospectus supplement
or post-effective amendment has been filed and, with respect to such
Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the Commission or any state
securities or blue sky authority
12
for amendments or supplements to the Registration Statement or the
Prospectus related thereto or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness
of such Registration Statement or the initiation or threat (of which the
Company has knowledge) of any proceedings for any of such purposes or (iv)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of any Registrable Securities for sale
under the securities or blue sky laws of any jurisdiction or the initiation
of any proceeding for such purpose;
(h) if so requested by the Majority Holders of the Registration, use
its reasonable best efforts to cause all such Registrable Securities to be
listed on each securities exchange on which similar securities issued by
the Company are then listed or, if no similar securities issued by the
Company are then listed on any securities exchange (or if the listing of
Registrable Securities is not permitted under the rules of each national
securities exchange on which the Company's securities are then listed), use
its reasonable best efforts to cause all such Registrable Securities to be
listed on The New York Stock Exchange or Nasdaq Stock Market (as determined
by the Majority Holders of the Registration in consultation with the
Company);
(i) provide a CUSIP number for all Registrable Securities and provide
and caused to be maintained a transfer agent and registrar for all such
Registrable Securities not later than the effective date of, or date of
final receipt, for such Registration Statement;
(j) enter into and perform such customary agreements (including
underwriting agreements with customary provisions) and provide officers'
certificates and other customary closing documents and take all such other
actions as the Majority Holders of the Registration or the Underwriters, if
any, reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities (including, without limitation, effecting a
share split or a combination of shares);
(k) make available for inspection by any seller of Registrable
Securities, Holders' Counsel, any Underwriter participating in any
disposition pursuant to such Registration Statement and any Inspector, all
financial and other records, pertinent corporate documents and documents
relating to the business of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, Holders' Counsel, Underwriter, or
Inspector in connection with such Registration Statement; provided that
each Holder will, and will use its commercially reasonable efforts to cause
each such Underwriter or Inspector to (i) enter into a confidentiality
agreement in form and substance reasonably
13
satisfactory to the Company and (ii) minimize the disruption to the
Company's business in connection with the foregoing; provided, further,
that the Company shall not be required to make available for inspection any
documents containing material non-public information or otherwise provide
such material non-public information to any person unless permitted under
applicable securities laws without also making public disclosure thereof;
(l) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission and any other
governmental agency or authority having jurisdiction over the offering, and
make available to its security holders, as soon as reasonably practicable
but no later than 90 days after the end of any 12-month period, earnings
statements (i) commencing at the end of any month in - which Registrable
Securities are sold to Underwriters in an Underwritten Offering and (ii)
commencing -- with the first day of the Company's calendar month next
succeeding each sale of Registrable Securities after the effective date of
a Registration Statement, which statements shall cover such 12-month
periods, in a manner which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(m) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or ceasing trading of any
securities included in such Registration Statement for sale in any
jurisdiction, use its reasonable best efforts promptly to obtain the
withdrawal of such order;
(n) cooperate with each selling Holder of Registrable Securities and
each Underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings
required to be made with the NASD and make reasonably available its
employees and personnel and otherwise provide reasonable assistance to the
Underwriters (taking into account the needs of the Company's businesses and
the requirements of the marketing process) in the marketing of Registrable
Securities in any Underwritten Offering, including, without limitation,
preparing for and participating in such number of "road shows" and all such
other customary selling efforts as the Underwriters reasonably request in
order to expedite or facilitate such disposition; and enter into such
agreements and take such other actions as the sellers of Registrable
Securities or the Underwriters reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(o) obtain one or more comfort letters, addressed to the sellers of
Registrable Securities, dated the effective date of such Registration
Statement (and, if such registration includes an underwritten public
offering dated the date of the closing under the underwriting agreement for
such offering), signed by the
14
Company's independent public accountants in customary form and covering
such matters of the type customarily covered by comfort letters as the
Holders of a majority of the Registrable Securities being sold in such
offering reasonably request;
(p) provide legal opinions of the Company's outside counsel, addressed
to the Holders of the Registrable Securities being sold, dated the
effective date of such Registration Statement, each amendment and
supplement thereto (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), with respect to the Registration Statement, each amendment and
supplement thereto (including the preliminary Prospectus) and such other
documents relating thereto in customary form and covering such matters of
the type customarily covered by legal opinions of such nature;
(q) furnish to any seller of Registrable Securities such information
and assistance as such seller may reasonably request in connection with any
"due diligence" effort which such seller deems appropriate;
(r) keep each selling Holder of Registrable Securities advised in
writing as to the initiation and progress of any registration under
Sections 1 and 2 hereunder;
(s) furnish to each Holder participating in the offering and the sole
or lead managing Underwriter, if any, without charge, at least one
manually-signed copy of the Registration Statement and any post-effective
amendments thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits (including
those deemed to be incorporated by reference);
(t) cooperate with the selling Holders of Registrable Securities and
the sole or lead managing Underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive
legends representing the Registrable Securities to be sold, and cause such
Registrable Securities to be issued in such denominations and registered in
such names in accordance with the underwriting agreement prior to any sale
of Registrable Securities to the Underwriters or, if not an Underwritten
Offering, in accordance with the instructions of the selling Holders of
Registrable Securities at least three business days prior to any sale of
Registrable Securities;
(u) if requested by the sole or lead managing Underwriter or any
selling Holder of Registrable Securities, immediately incorporate in a
prospectus supplement or post-effective amendment such information
concerning such
15
Holder of Registrable Securities, the Underwriters or the intended method
of distribution as the sole or lead managing Underwriter or the selling
Holder of Registrable Securities reasonably requests to be included therein
and as is appropriate in the reasonable judgment of the Company, including,
without limitation, information with respect to the number of shares of the
Registrable Securities being sold to the Underwriters, the purchase price
being paid therefor by such Underwriters and with respect to any other
terms of the Underwritten Offering of the Registrable Securities to be sold
in such offering; make all required filings of such Prospectus supplement
or post-effective amendment as soon as notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment; and
supplement or make amendments to any Registration Statement if requested by
the sole or lead managing Underwriter of such Registrable Securities; and
(v) use its reasonable best efforts to take or cause to be taken all
other actions, and do and cause to be done all other things, necessary or
reasonably advisable in the opinion of any seller of Registrable Securities
to effect the registration of such Registrable Securities contemplated
hereby.
The Company agrees not to file or make any amendment to any Registration
Statement with respect to any Registrable Securities, or any amendment of or
supplement to the Prospectus used in connection therewith, that refers to any
Holder covered thereby by name, or otherwise identifies such Holder as the
holder of any securities of the Company, without the consent of such Holder,
such consent not to be unreasonably withheld or delayed, unless and to the
extent such disclosure is required by law. If any Registration Statement or
comparable statement under "blue sky" laws refers to any Holder by name or
otherwise as the Holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance satisfactory to such Holder and the Company, to the effect that the
holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, and
(ii) in the event that such reference to such Holder by name or otherwise is not
in the judgment of the Company, as advised by counsel, required by the
Securities Act or any similar federal statute or any state "blue sky" or
securities law then in force, the deletion of the reference to such Holder.
The Company may require each Holder of Registrable Securities as to which any
registration is being effected to furnish the Company with such information
regarding such Holder and pertinent to the disclosure requirements relating to
the registration and the distribution of such securities as the Company may from
time to time reasonably request in writing.
16
4. Registration Expenses.
(a) Except for Selling Expenses and as otherwise provided for herein, all
expenses incidental to the Company's performance of or compliance with this
Agreement whether or not any Registration Statement becomes effective and
whether or not all Registrable Securities originally requested to be included in
such registration are withdrawn or otherwise ultimately not included in such
registration, including, without limitation, all registration, listing and
filing fees, fees and expenses of compliance with securities or blue sky laws
and the rules of any stock exchange, word processing, duplicating, distributing
and printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company, all independent certified public
accountants (including the expenses of any audit and/or "cold comfort" letters),
Underwriters and other Persons retained by the Company, the reasonable
out-of-pocket expenses incurred in connection with making road show
presentations and holding meetings with potential investors to facilitate the
distribution and sale of Registrable Securities which are customarily borne by
the issuer (all such expenses, "Registration Expenses"), will be borne as
provided in this Agreement, except that the Company will, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit or quarterly review, the expenses of any liability insurance
and the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on The New York Stock Exchange or Nasdaq Stock Market. All Selling
Expenses will be borne by the holders of the securities so registered pro rata
on the basis of the number of their securities so registered.
(b) In connection with each registration pursuant to Section 1 and each
Piggyback Registration whether or not any Registration Statement becomes
effective and whether or not all Registrable Securities originally requested to
be included in such registration are withdrawn or otherwise ultimately not
included in such registration, the Company will reimburse the holders of
Registrable Securities covered by such registration or qualification for the
reasonable fees and disbursements of one United States counsel, which counsel
shall be selected (i) in the case of a Demand Registration or an S-3
Registration by the Initiating Holders holding a majority of the Registrable
Securities for which registration was requested in the Registration Request, and
(ii) in all other cases, by the Majority Holders of the Registration (the
"Holders' Counsel").
(c) To the extent Registration Expenses are not required to be paid by the
Company, each holder of securities included in any registration or qualification
hereunder will pay those Registration Expenses allocable to the registration or
qualification of such holder's securities so included, and any Registration
Expenses not so allocable will be borne by all sellers of securities included in
such registration in proportion to the aggregate selling price of the securities
to be so registered or qualified.
17
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless, and hereby does
indemnify and hold harmless, each Holder, its Affiliates and their respective
officers, directors and partners, members, shareholders, employees, and agents
(each, an "Agent") and each Person who "controls" such Holder (within the
meaning of the Securities Act and Section 20 of the Exchange Act) against, and
pay and reimburse such Holder, Agent or controlling person for any losses,
claims, damages, liabilities, joint or several, to which such Holder, Agent or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (i) any untrue or alleged untrue statement of material fact
contained in any Registration Statement, Prospectus or preliminary Prospectus or
any amendment thereof or supplement thereto, (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (iii) any violation by the Company of
any rule or regulation promulgated under the Securities Act or any state
securities laws applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, and the
Company will pay and reimburse such Holder and each such Agent and controlling
person for any legal or any other expenses actually and reasonably incurred by
them in connection with investigating, defending or settling any such loss,
claim, liability, action or proceeding, provided that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement, or omission or
alleged omission, made in such Registration Statement, any such Prospectus or
preliminary Prospectus or any amendment or supplement thereto, or in any
application, in reliance upon, and in conformity with, written information
prepared and furnished to the Company by such Holder or its Affiliates expressly
for use therein or by such Holder's or its Affiliates' failure to deliver a copy
of the Registration Statement or Prospectus or any amendments or supplements
thereto after the Company has furnished such Holder or its Affiliates with a
sufficient number of copies of the same. In connection with an Underwritten
Offering, the Company, if requested, will indemnify such Underwriters, their
officers and directors and each Person who controls such Underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holders.
(b) In connection with any Registration Statement in which a Holder is
participating, each such Holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such Registration Statement, Prospectus or preliminary
Prospectus and, will indemnify and hold harmless the Company, its directors and
officers, each Underwriter and each other Person who "controls" the Company
(within the meaning of the Securities Act and Section 20 of the Exchange Act)
and each such Underwriter against any losses, claims,
18
damages, liabilities, joint or several, to which such Holder or any such
director or officer, any such Underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) any untrue or
alleged untrue statement of material fact contained in the Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or
supplement thereto or in any application or (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is made in such Registration Statement, any such
Prospectus or preliminary Prospectus or any amendment or supplement thereto, or
in any application, in reliance upon and in conformity with written information
prepared and furnished to the Company by such Holder expressly for use therein,
and such Holder will reimburse the Company and each such director, officer,
Underwriter and controlling Person for any legal or any other expenses actually
and reasonably incurred by them in connection with investigating, defending or
settling any such loss, claim, liability, action or proceeding, provided that
the obligation to indemnify and hold harmless will be individual and several to
each Holder and will be limited to the net amount of proceeds received by such
Holder from the sale of Registrable Securities pursuant to such Registration
Statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the registration and sale of any securities
by any Person entitled to any indemnification hereunder and the expiration or
termination of this Agreement.
(e) If the indemnification provided for in this Section 5 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss,
19
liability, claim, damage or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party thereunder, will
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 fault of the indemnifying party on the one
hand and of the indemnified party on the other hand in connection with the
statements or omissions which resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations. The relevant
fault of the indemnifying party and the indemnified party will 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. Notwithstanding the foregoing,
the amount any Holder will be obligated to contribute pursuant to this Section
5(e) will be limited to an amount equal to the net proceeds to such Holder of
the Registrable Securities sold pursuant to the registration statement which
gives rise to such obligation to contribute (less the aggregate amount of any
damages which the Holder has otherwise been required to pay in respect of such
loss, claim, damage, liability or action or any substantially similar loss,
claim, damage, liability or action arising from the sale of such Registrable
Securities). The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(e) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
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.
6. Participation in Underwritten Registrations.
(a) No Holder may participate in any registration hereunder that is
underwritten unless such Holder (i) agrees to sell its Registrable Securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to the terms of any over-allotment or "green shoe" option
requested by the managing Underwriter(s), provided that no Holder will be
required to sell more than the number of Registrable Securities that such Holder
has requested the Company to include in any registration), (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) cooperates with the Company's reasonable
requests in connection with such registration or qualification (it being
understood that the Company's failure to perform its obligations hereunder,
which failure is caused by such Holder's failure to cooperate, will not
constitute a breach by the Company of this Agreement). Notwithstanding the
foregoing, no Holder will be required
20
to agree to any indemnification obligations on the part of such Holder that are
greater than its obligations pursuant to Section 6(b).
(b) Each Holder that is participating in any registration hereunder agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in subsection 3(f) above, such Holder will forthwith
discontinue the disposition of its Registrable Securities pursuant to the
Registration Statement until such Holder receives copies of a supplemented or
amended Prospectus as contemplated by such Section 3(f). In the event the
Company gives any such notice, the applicable time period mentioned in
subsection 3(b) during which a Registration Statement is to remain effective
will be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to this Section 6(b) to and including
the date when each seller of a Registrable Security covered by such Registration
Statement will have received the copies of the supplemented or amended
Prospectus contemplated by Section 3(f).
7. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees
to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times,
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act, and
(c) take such further action as any Holder of Registrable Securities
may reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided
by (i) Rule 144 under the Securities Act, as such rules may be amended from
time to time, or (ii) any other rule or regulation now existing or
hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such requirements.
8. Lock Up Agreements. In consideration for the Company agreeing to its
obligations under this Agreement, each Holder agrees in connection with any
registration of the Company's securities (whether or not such Holder is
participating in such registration) upon the timely request of the Company and
the Underwriters managing any Underwritten Offering of the Company's securities,
not to effect (other than pursuant to such registration) any public sale or
distribution of Registrable Securities, including, but not
21
limited to, any sale pursuant to Rule 144 or Rule 144A, or make any short sale
of, loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Securities, any other equity securities of the Company or any
securities convertible into or exchangeable or exercisable for any equity
securities of the Company without the prior written consent of the Company or
such Underwriters, as the case may be, for such period of time (not to exceed 90
days) from the effective date of such registration as the Company and the
Underwriters may specify, such consent not to be unreasonably withheld, delayed
or conditioned, in the case of the Company, so long as all Holders or
shareholders holding more than five percent (5%) of the outstanding Ordinary
Shares and all officers and directors of the Company are bound by a comparable
obligation, provided that except as provided in Section 11(b), nothing herein
will prevent any Holder that is a partnership or corporation from making a
distribution of Registrable Securities to the partners or shareholders thereof
that is otherwise in compliance with applicable securities laws, so long as such
distributees agree to be so bound. The Company agrees that (i) if timely
requested in writing by the sole or lead managing Underwriter in an Underwritten
Offering of any Registrable Securities, not to make any short sale of, loan,
grant any option for the purchase of or effect any public sale or distribution
of any of the Company's equity securities (or any security convertible into or
exchangeable or exercisable for any of the Company's equity securities) during
the time period reasonably requested by the sole or lead managing Underwriter
not to exceed 90 days, beginning on the effective date of the applicable
Registration Statement (except as part of such underwritten registration or
pursuant to registrations on Forms S-4 or S-8 or any successor form to such
forms), and (ii) it will cause each holder of equity securities (or any security
convertible into or exchangeable or exercisable for any of its equity
securities) of the Company purchased from the Company at any time after the date
of this Agreement (other than in a registered public offering) to so agree.
Notwithstanding the foregoing, the obligations contained in this Section 8 shall
no longer apply to the Cypress Shareholders upon the sale, transfer or
assignment (including, without limitation, pursuant to Section 11(b)) by the
Cypress Shareholders of 50% or more of the securities of the Company held by the
Cypress Shareholders in the aggregate on the date of this Agreement.
9. Term. This Agreement will be effective as of the date hereof and will
continue in effect thereafter until the earliest of (a) its termination by the
consent of the parties hereto or their respective successors in interest, (b)
the dissolution, liquidation or winding up of the Company and (c) the date on
which no Registrable Securities remain outstanding; provided, that Sections 5,
10, 12, 13, 15 and 16 shall survive any such termination, in accordance with
their terms.
10. Voting Rights. The Company and each Holder shall take all necessary and
desirable actions within its control (including, without limitation, calling
special board or shareholder meetings to seek approval of amendments and/or
restatements of the Company's Memorandum of Association or Articles of
Association, proposing a slate
22
of director nominees and voting in favor of such nominees, as applicable in each
case), so that:
(a) For so long as the Investors in the aggregate beneficially own at least
51% of the outstanding Voting Shares of the Company on a fully-diluted basis
(the "Threshold Amount"), Investors shall be entitled to designate for election
to the Board the number of individuals equal to two-thirds of the authorized
number of directors of the Board, rounded up to the nearest whole even number.
Such designated individuals shall be elected as members of the Board.
(b) To the extent that the Investors in the aggregate beneficially own less
than the Threshold Amount, they shall continue to have the rights provided by
the previous paragraph for up to 12 months following the date their aggregate
beneficial ownership falls below the Threshold Amount.
(c) For so long as Investors have continuously owned less than the
Threshold Amount for greater than 12 months, they shall be entitled to designate
the number of individuals , rounded up to the nearest whole number, for election
to the Board in proportion to their aggregate beneficial ownership of Voting
Shares, and such individuals shall be elected to the Board; provided that, for
so long as Investors in the aggregate beneficially own at least 5% of the
outstanding Voting Shares they shall be entitled to designate at least one
individual for election to the Board, and such individual shall be elected to
the Board.
(d) Subject to applicable law, Investors shall be entitled to designate the
number of members of each board of directors of each subsidiary of the Company
and, subject to applicable law and exchange rules and regulations, each
respective committee of the Company and its subsidiaries that is proportionate
to their representation on the Board.
(e) For so long as the Cypress Shareholders in the aggregate beneficially
own at least 2.5% of the outstanding Voting Shares of the Company on a fully
diluted basis (or until the Cypress Shareholders effect the sale, transfer or
assignment of their securities in the Company described in Section 11(b), if
earlier), the Cypress Shareholders shall be entitled to designate at least one
individual, who shall be an employee, officer or director of the Cypress
Shareholders and who shall not be an employee, officer or director of any
competitor of the Company or any of its subsidiaries, for election to the Board.
Such individual shall be approved by Investors as a designee of the Cypress
Shareholders, such approval not to be unreasonably withheld or delayed, but
subject in any event to Investors' fiduciary duties and applicable law; provided
that the parties agree that as of the date of this Agreement, the initial
representative of the Cypress Shareholders to be designated for election to the
Board shall be Xxxxxxx Xxxxxx . Such individual shall be elected as a member of
the Board, but shall be removed from the
23
Board if such individual is no longer an employee, officer or director of the
Cypress Shareholders. For the avoidance of doubt, the designation of the
representative of the Cypress Shareholders shall be in addition to the other
rights of the Investors to designate individuals for election to the Board
pursuant to this Section 10.
(f) For so long as Investors have the right to designate directors for
election to the Board and the boards of directors of subsidiaries of the Company
and committees thereof, Investors shall also have the sole right to remove from
the Board or such boards of directors and such committees thereof the directors
so designated by Investors. If a vacancy is to occur on the Board or any other
such board of directors or any such committee thereof arising from the removal,
resignation, death or incapacity of a director designated by Investors,
Investors shall have the sole right to designate a director to fill such
vacancy. The Company shall take all actions necessary to fill such a vacancy
promptly upon notice by Investors of their designation of a replacement
director. For so long as the Cypress Shareholders have the right to a
representative to be designated for election to the Board, the Cypress
Shareholders shall also have the sole right to remove from the Board such
representative of the Cypress Shareholders. If a vacancy is to occur on the
Board arising from the removal, resignation, death, incapacity or disaffiliation
with the Cypress Shareholders of the representative of the Cypress Shareholders
on the Board, the replacement director shall be designated in accordance with
the procedures set forth in Section 10(e). The Company shall take all actions
necessary to fill such a vacancy promptly upon notice by Investors of their
designation of a replacement director from the list provided by the Cypress
Shareholders pursuant to Section 10(e).
(g) So long as any Convertible Shares are outstanding, in addition to any
other vote of members or shareholders of the Company required under applicable
law or the Memorandum of Association or Articles of Association of the Company,
the holders of the Convertible Shares will have the rights set forth in Section
4(b) of the Certificate of Designations and the Company shall not take any
action or fail to take any action that, in any event, would be inconsistent
with, or would otherwise impede or frustrate the rights of such holders of
Convertible Shares under Section 4(b) of the Certificate of Designations.
(h) In addition to the foregoing, Investors shall otherwise have the right
to participate in the election of the Board on the same terms as other holders
of Voting Shares of the Company.
11. Transfer Restrictions.
(a) The Convertible Shares may be transferred to Affiliates of either
Investor, provided that at all times voting and disposition control of such
Convertible Shares shall remain with the Investors pursuant to appropriate
proxies or other similar methods. The Investors shall not and shall cause such
Affiliates not to, without the prior written consent
24
of the Company, which consent shall not be unreasonably withheld, transfer more
than 490,000 Convertible Shares in the aggregate to any Person or Persons other
than an Affiliate of an Investor. The Investors shall and shall cause their
Affiliates to give prior notice to the Company of any transfer of Convertible
Shares to a Person other than an Affiliate of an Investor. Such notice shall
include the identity of the transferee. An Investor may pledge all or a portion
of its Convertible Shares or grant a security interest therein to secure
indebtedness of such Investor or any of its permitted transferees owing to a
bank, other financial institution, institutional lender or other financing
source.
(b) At any time following the date of this Agreement, the Cypress
Shareholders shall be permitted to sell, transfer or assign all, but not less
than all, of the securities of the Company then held by the Cypress Shareholders
in the aggregate to the limited partners, members or shareholders in the Cypress
Shareholders; provided, that the rights of the Cypress Shareholders pursuant to
this Agreement shall not be transferred or assigned to such transferees or
assignees of the securities of the Cypress Shareholders. Notwithstanding the
foregoing, the obligations contained in this Section 11(b) shall no longer apply
to the Cypress Shareholders upon the sale, transfer or assignment (including,
without limitation, pursuant to Section 11(b)) by the Cypress Shareholders of
50% or more of the securities of the Company held by the Cypress Shareholders in
the aggregate on the date of this Agreement.
(c) Investors shall not cause the Company to enter into any of the
following types of transactions other than with the approval of the majority of
disinterested members of the Board and in compliance with applicable law:
(i) a merger, consolidation, amalgamation, scheme of arrangement or
business combination with either Investor or its Affiliates; or
(ii) a sale, lease or exchange of all or substantially all of the
assets of the Company to either Investor or its Affiliates;
provided, that the foregoing shall not apply to any such transaction of the
Company with any Person that the Company, directly or indirectly, controls, as
defined in Rule 405 under the Securities Act.
12. Preemptive Rights.
(a) For so long as there are any Registrable Securities (other than
Registrable Securities held by the Cypress Shareholders) or Convertible Shares
outstanding, if the Company proposes to issue or sell any Ordinary Shares or
Ordinary Share Equivalents to any Person or Persons other than the Investors or
holders of Convertible Shares other than an issuance of securities registered on
Form S-8 or any successor form thereto or otherwise issued under an employee
benefits plan in existence as of the date hereof or
25
consented to by Investors, and other than any securities registered on Form S-4
or any successor form thereto or otherwise issued in an exchange offer or
business combination transaction that (other than in the case of a merger,
consolidation, amalgamation or share exchange with any other Person pursuant to
which the Company issues securities as consideration therefor) was approved by
Investors (a "New Issuance"), the Company shall (i) give each Investor or holder
of Convertible Shares 30 days' prior written notice of the proposed issuance or
sale and (ii) offer to sell to the Holders (other than the Cypress Shareholders)
and holders of Convertible Shares, on the same terms and conditions as the
proposed sale to such Person or Persons at the most favorable price and on the
most favorable terms as are offered to any such Persons, the respective numbers
of such securities which, if all such securities were purchased, would result in
the Holders (other than the Cypress Shareholders) and holders of Convertible
Shares holding that percentage of such securities equal to the percentage of
Ordinary Shares on a fully diluted basis owned by the Holders (other than the
Cypress Shareholders) immediately prior to such sale and into which Convertible
Shares owned by the holders thereof immediately prior to such sale are
convertible. Such offer shall remain open for 30 days after notice of such New
Issuance has been given to such Investor or other holder of Convertible Shares.
If requested by the Holders (other than the Cypress Shareholders) and holders of
Convertible Shares, the Company will issue to the Holders (other than the
Cypress Shareholders) and holders of Convertible Shares (or any Affiliate
designated by such Holders or holders of Convertible Shares) a different class
of equity securities, which shall be identical to those to be issued except that
they will be non-voting and convertible into those equity securities to be
issued. Except as expressly provided in this Section 12, the shareholders of the
Company shall not have preemptive rights.
(b) Upon the expiration of the offering period described above, the Company
shall be entitled to sell such securities that the Investors or holders of
Convertible Shares have not elected to purchase during the 90-day period
following such expiration at a price and on terms and conditions no more
favorable to the purchasers thereof than those offered to the Investors or
holders of Convertible Shares. Any such securities offered or sold by the
Company after such 90-day period must be reoffered to the Investors or holders
of Convertible Shares pursuant to the terms of this Section 12. The closing of
any purchase by the Investors or holders of Convertible Shares pursuant to
Section 12(a) shall be held at the time and place of the closing of, and on the
same terms and conditions as, the New Issuance, or at such other time and place
as the parties to the transaction may agree. At such closing, the participating
Investors or holders of Convertible Shares shall deliver, by certified or
official bank check or wire transfer, so much of the purchase price for its
portion of the New Issuance as is payable in cash and shall pay the balance in
accordance with the agreed upon terms of the transaction, and all parties to the
transaction shall execute such documents as are otherwise customary and
appropriate.
13. Affiliate Transactions. The Company shall not, and shall not permit its
subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any
27
of their properties or assets to, or purchase any property or assets from, or
enter into or make or amend any transaction, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Investor or any
Affiliate of an Investor (other than the Company and its subsidiaries) (each, an
"Affiliate Transaction"), unless the Affiliate Transaction is approved by the
independent directors of the Board (which, for purposes of this Section 13,
shall not include the representatives of the Investors) or upon a vote of at
least a majority of the holders of the Ordinary Shares as a class, excluding any
Ordinary Shares held by the Investors; provided that, the Investors or their
Affiliates may enter into the following types of agreements with the Company
and/or its subsidiaries without such approval or vote: reinsurance agreements,
investment management agreements, and/or any agreement with the Company or its
subsidiaries under which the Company or its subsidiaries are not obligated to
make payments in excess of $2,000,000 in the aggregate, in each case in the
ordinary course of business and on terms that are no less favorable to the
Company or the relevant subsidiary than those that could have been obtained in a
comparable transaction by the Company or such subsidiary with an unrelated
Person; provided that such agreements do not create any material adverse tax
consequences to holders of Ordinary Shares taken in the aggregate.
14. Information Rights. The Cypress Shareholders and any Affiliate or
limited partner of a Cypress Shareholder that holds securities of the Company on
the date hereof, on a co-investment basis with the Cypress Shareholders that is
intended to qualify as a "venture capital operating company" within the meaning
of 29 C.F.R. ss. 2510.3-101(d) (each such entity, a "VCOC Investor") shall have
the right to receive from the Company any written information or written
materials provided by the Company to members of the Board; provided that the
Cypress Shareholders and the VCOC Investors receiving such information shall
enter into a confidentiality agreement in form and substance reasonably
satisfactory to the Company providing that each such Cypress Shareholder and
VCOC Investor shall keep any information and materials received pursuant to this
Section 14 strictly confidential, subject to the terms and conditions of such
confidentiality agreement.
15. Defined Terms. Capitalized terms when used in this Agreement have the
following meanings:
"Affiliate" of any Person means another Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first Person, including, without limitation,
limited partners or members on a co-investment basis. The Affiliates of
Investors shall be deemed to include one or more funds under common
management and their respective limited partners and Affiliates.
"Affiliate Transaction" has the meaning set forth in Section 13.
27
"Agent" has the meaning set forth in Section 5(a).
"Agreement" has the meaning set forth in the first paragraph of this
Agreement.
"Blackout Notice" has the meaning set forth in Section 1(d).
"Blackout Period" has the meaning set forth in Section 1(d).
"Board" has the meaning set forth in Section 1(d).
"Cerberus" has the meaning set forth in the first paragraph of this
Agreement.
"Certificate of Designations" means the Certificate of Designations of the
Company with respect to the Convertible Shares.
"Commission" means the Securities and Exchange Commission or any other
federal agency administering the Securities Act.
"Company" has the meaning set forth in the first paragraph of this
Agreement.
"Convertible Shares" has the meaning set forth in the recitals.
"Cypress Shareholders" has the meaning set forth in the first paragraph of
this Agreement.
"Demand Registration" has the meaning set forth in Section 1(a).
"Demand Registration Statement" means a registration statement of the
Company that covers the Registrable Securities requested to be included
therein pursuant to the provisions of Section 1(a) (as such amount may be
reduced in accordance with the provisions of Section 1(f)) and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
(or deemed to be incorporated by reference) therein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute and the rules and regulations thereunder, as in
effect from time to time.
"Holder" means any holder of outstanding Registrable Securities who is a
party to this Agreement or to whom the benefits of this Agreement have been
validly assigned and such of its respective heirs, successors and permitted
assigns (including any permitted transferees of Registrable Securities) who
acquire or are otherwise the transferee of Registrable Securities, directly
or indirectly, from such
28
Investor (or any subsequent Holder), for so long as such heirs, successors
and permitted assigns own any Registrable Securities; provided that the
Cypress Shareholders shall not be permitted to assign or transfer their
rights hereunder.
"Holders' Counsel" has the meaning set forth in Section 4(b).
"Inspectors" has the meaning set forth in Section 3(a).
"Initiating Holders" means, with respect to a particular registration, the
Holders who initiated the Request for such registration.
"Investors" has the meaning set forth in the first paragraph of this
Agreement.
"Investors' Agreement" means the Investors' Agreement, dated as of the date
hereof, by and among Investors.
"Majority Holders of the Registration" means, with respect to a particular
registration, one or more Holders of Registrable Securities who would hold
a majority of the Registrable Securities to be included in such
registration.
"MassMutual" has the meaning set forth in the first paragraph of this
Agreement.
"New Issuance" has the meaning set forth in Section 12(a).
"Ordinary Shares" means the ordinary shares of the Company, par value $0.01
per share.
"Ordinary Share Equivalents" means (i) any evidences of indebtedness,
shares of the capital of the Company or other securities directly or
indirectly convertible into or exchangeable for Ordinary Shares, and (ii)
any right, option or warrant to subscribe for, purchase or otherwise
acquire, directly or indirectly, Ordinary Shares; provided, that unless
otherwise specified herein, for the purposes of computing the number of
Ordinary Shares either outstanding or held by an Investor, the Ordinary
Share Equivalents outstanding or held by such Investor shall be deemed to
be converted, exercised or exchanged for Ordinary Shares, whether or not
such conversion, exercise or exchange has actually been effected, and
whether or not then convertible, exercisable or exchangeable or vested.
"Other Agreements" has the meaning set forth in Section 16(j).
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or department or agency thereof.
29
"Piggyback Registration" has the meaning set forth in Section 2(a).
"Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, any preliminary prospectus and any
prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), and any such
Prospectus as amended or supplemented by any prospectus supplement, and all
other amendments and supplements to such Prospectus, including
post-effective amendments, and in each case including all material
incorporated by reference (or deemed to be incorporated by reference)
therein.
"Register," "registered" and "registration" refers to a registration
effected by preparing and filing a Registration Statement in compliance
with the Securities Act, and the declaration or ordering of the
effectiveness of such Registration Statement, and compliance with
applicable state securities laws of such states in which Holders notify the
Company of their intention to offer Registrable Securities.
"Registrable Securities" means (i) any Ordinary Shares issued or issuable
upon conversion of the Convertible Shares, (ii) any other shares or
securities that the holders of the Convertible Shares may be entitled to
receive, or will have received, pursuant to such holders' ownership of the
Convertible Shares, (iii) any Ordinary Shares otherwise or hereafter
purchased or acquired by the Investors or their Affiliates (provided, that
the Company shall be obligated pursuant to this Agreement to pay half of
any Registration Expenses with respect to securities classified as
Registrable Securities solely under this clause (iii)), (iv) any securities
of the Company held by the Cypress Shareholders on the date hereof or (v)
any securities of the Company (or any successor or assign of the Company,
whether by merger, consolidation, sale of assets or otherwise) issued or
issuable directly or indirectly with respect to the securities referred to
in the foregoing clause (i), (ii) or (iii) by way of conversion or exchange
thereof or share dividend or share split or in connection with a
combination of shares, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization, sale of
assets or similar transactions. As to any particular securities
constituting Registrable Securities, such securities will cease to be
Registrable Securities when (x) they have been effectively registered or
qualified for sale by Prospectus filed under the Securities Act and
disposed of in accordance with the Registration Statement covering therein,
(y) they have been sold to the public through a broker, dealer or market
maker pursuant to Rule 144 or other exemption from registration under the
Securities Act, or (z) they have been sold by such Holder without
restriction as to volume or manner of sale pursuant to Rule 144(k) under
the Securities Act. For purposes of this
30
Agreement, a Person will be deemed to be a Holder whenever such Person
holds an option to purchase, or a security convertible into or exercisable
or exchangeable for, Registrable Securities, whether or not such purchase,
conversion, exercise or exchange has actually been effected and
disregarding any legal restrictions upon the exercise of such rights.
Registrable Securities issuable upon exercise of an option or upon
conversion, exchange or exercise of another security shall be deemed
outstanding for the purposes of this Agreement. Notwithstanding the
foregoing, any securities of the Company held by the Cypress Shareholders
and otherwise deemed to be Registrable Securities shall cease to be
Registrable Securities upon the sale, transfer or assignment (including,
without limitation, pursuant to Section 11(b)) by the Cypress Shareholders
of 50% or more of such securities of the Company held by the Cypress
Shareholders in the aggregate on the date of this Agreement.
"Registration Expenses" has the meaning set forth in Section 4.
"Registration Request" has the meaning set forth in Section 1(a). The term
Registration Request will also include, where appropriate, a S-3
Registration request made pursuant to Section 1(c).
"Registration Statement" means the registration statement, Prospectus and
other documents filed with the Commission to effect a registration under
the Securities Act.
"Required Cypress Holders" means one or more Cypress Shareholders who would
hold in the aggregate 50% or more of the outstanding Registrable Securities
held by the Cypress Shareholders.
"Required Investor Holders" means one or more shareholders or members who
would hold in the aggregate 50% or more of the outstanding Registrable
Securities held by Investors or their permitted assignees and transferees.
"Rule 144" means Rule 144 under the Securities Act or any successor or
similar rule as may be enacted by the Commission from time to time, as in
effect from time to time.
"Rule 144A" means Rule 144A under the Securities Act or any successor or
similar rule as may be enacted by the Commission from time to time, as in
effect from time to time.
"S-3 Registration" means a registration required to be effected by the
Company pursuant to Section 1(c).
31
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations thereunder, as in
effect from time to time.
"Securities Purchase Agreement" has the meaning set forth in the recitals.
"Selling Expenses" means all underwriting discounts, selling commissions
and transfer taxes applicable to the sale of Registrable Securities
hereunder.
"Shelf Registration" has the meaning set forth in Section 1(a).
"Threshold Amount" has the meaning set forth in Section 10(a).
"Underwriters" means the underwriters, if any, of the offering being
registered under the Securities Act.
"Underwritten Offering" means a sale of securities of the Company to an
Underwriter or Underwriters for reoffering to the public.
"VCOC Investor" has the meaning set forth in Section 14.
"Voting Agreement" means the Voting Agreement and Waiver, dated as of
November 26, 2006, by and among the Company, Investors and the Cypress
Shareholders.
"Voting Shares" means the Ordinary Shares and the Convertible Shares, and
any other securities of the Company that are entitled to vote in the
election of the Board.
16. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter enter into
any agreement with respect to its securities that is inconsistent with or
adversely affects or impairs or violates the rights granted to the holders of
Convertible Shares and Holders of Registrable Securities in this Agreement.
Except as provided in this Agreement, the Company will not grant to any holder
or prospective holder of any securities of the Company rights with respect to
such securities that are senior, pari passu to or otherwise as or more favorable
from the perspective of such Person as or than, the rights granted hereunder
without the prior written consent of the Required Investor Holders and the
Required Cypress Holders, provided that, with the prior written consent of the
Required Investor Holders, but not the Required Cypress Holders, the Company may
grant registration rights to any Person acquiring securities of the Company in a
primary issuance that are as or more favorable than those granted to the Holders
hereunder.
32
(b) Adjustments Affecting Registrable Securities. Except as may be required
by applicable law, the Company will not take any action, or permit any change to
occur, with respect to its securities which would materially and adversely
affect the ability of the holders of Registrable Securities to include such
Registrable Securities in a registration or qualification for sale by Prospectus
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration or
qualification (including, without limitation, effecting a share split or a
combination of shares).
(c) Remedies. The parties hereto acknowledge that money damages would not
be an adequate remedy at law if any party fails to perform in any material
respect any of its obligations hereunder, and accordingly agree that each party,
in addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to seek to compel specific performance of the obligations of
any other party under this Agreement, without the posting of any bond, in
accordance with the terms and conditions of this Agreement in any court of the
United States or any State thereof having jurisdiction, and if any action should
be brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is an adequate remedy at
law. Except as otherwise provided by law, a delay or omission by a party hereto
in exercising any right or remedy accruing upon any such breach shall not impair
the right or remedy or constitute a waiver of or acquiescence in any such
breach. No remedy shall be exclusive of any other remedy. All available remedies
shall be cumulative.
(d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company (upon the approval of the independent directors
of the Board, which shall not include the representatives of the Investors), the
Required Investor Holders and, for so long as the Investors beneficially own any
Convertible Shares or Registrable Securities, the Investors, and, with respect
only to such an amendment, modification, supplement or waiver that would
materially adversely affect their rights hereunder or impose any material
additional burdens on them, for so long as the Cypress Shareholders hold
Registrable Securities, the Required Cypress Holders; provided, however, that in
the event that such amendment or waiver would treat a Holder or group of Holders
in a manner different from any other Holders, then such amendment or waiver will
require the consent of such Holder or the Holders of a majority of the
Registrable Securities of such group adversely treated.
(e) Successors and Assigns. This Agreement will be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
heirs, successors and assigns (including any permitted transferee of Registrable
Securities). Any Holder (other than a Cypress Shareholder) may assign to any
permitted (as determined under the Securities Purchase Agreement and this
Agreement) transferee of
33
its Registrable Securities (other than a transferee that acquires such
Registrable Securities in a registered public offering or pursuant to a sale
under Rule 144 of the Securities Act (or any successor rule)), its rights and
obligations under this Agreement. In addition, and whether or not any express
assignment will have been made, the provisions of this Agreement which are for
the benefit of the holders of the Convertible Shares and/or the Holders of the
Registrable Securities (or any portion thereof) as such will be for the benefit
of and enforceable by any permitted transferee that is a subsequent holder of
any Convertible Shares and/or Registrable Securities (or of such portion
thereof), as applicable, subject to the provisions respecting the minimum
numbers or percentages of shares of Convertible Shares and/or Registrable
Securities (or of such portion thereof), as applicable, required in order to be
entitled to certain rights, or take certain actions, contained herein. For
purposes of this Agreement, "successor" for any entity other than a natural
person shall mean a successor to such entity as a result of such entity's
merger, consolidation, sale of substantially all of its assets, or similar
transaction. For the avoidance of doubt, the rights under Section 10 (other than
Section 10(g)) may not be assigned by either Investor to any third party, other
than to its Affiliates or the other Investor, provided that in the case of any
such assignment to an Affiliate or the other Investor, at all times voting and
disposition control of such Convertible Shares and/or Registrable Securities and
the right to exercise such rights under Section 10 shall remain with the
Investors pursuant to appropriate proxies or other similar methods.
(f) Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
(g) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and the
same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(i) Governing Law. This Agreement (other than Sections 10, 11 and 12) and
the rights and duties of the parties hereto hereunder shall be governed by and
construed in accordance with laws of the State of New York, without giving
effect to its principles or rules of conflict of laws to the extent such
principles or rules are not mandatorily
34
applicable by statute and would require or permit the application of the laws of
another jurisdiction.
(j) Entire Agreement. This Agreement, the Investors' Agreement, the Voting
Agreement and the Securities Purchase Agreement (the Investors' Agreement
(solely with respect to the Investors), the Voting Agreement and the Securities
Purchase Agreement, together, the "Other Agreements") are 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, representations, warranties, covenants or undertakings relating to
such subject matter, other than those set forth or referred to herein or in the
Other Agreements. This Agreement and the Other Agreements supersede all prior
agreements and understandings between the Company and the other parties to this
Agreement with respect to such subject matter.
(k) Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company (and countersigned by the nominee), be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities and the nominee's consent to
such.
(l) Consent to Jurisdiction. Each party to this Agreement hereby
irrevocably and unconditionally agrees that any legal action, suit or proceeding
arising out of or relating to this Agreement or any agreements or transactions
contemplated hereby may be brought in any federal court of the Southern District
of New York or any state court located in New York County, State of New York,
and hereby irrevocably and unconditionally expressly submits to the personal
jurisdiction and venue of such courts for the purposes thereof and hereby
irrevocably and unconditionally waives any claim (by way of motion, as a defense
or otherwise) of improper venue, that it is not subject personally to the
jurisdiction of such court, that such courts are an inconvenient forum or that
this Agreement or the subject matter may not be enforced in or by such court.
Each party hereby irrevocably and unconditionally consents to the service of
process of any of the aforementioned courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth or provided for in Section 16(n) of
this Agreement, such service to become effective 10 days after such mailing.
Nothing herein contained shall be deemed to affect the right of any party to
serve process in any manner permitted by law or commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction to
35
enforce judgments obtained in any action, suit or proceeding brought pursuant to
this Section 16(l).
(m) Further Assurances. Each party hereto shall do and perform or cause to
be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(n) Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, by facsimile (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to MassMutual, to
MassMutual Financial Group
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Port
and
Babson Capital Management LLC
0000 Xxxx Xxxxxx, Xxxxx 00
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
with copies to:
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000 0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
and
36
Ropes & Xxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
(b) if to Cerberus, to
SRGL Acquisition, LLC
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxxxxxx Xxxxx
with copies to:
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000 0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
and
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxxxx, Esq.
(c) if to SRGL, to
Scottish Re Group Limited
Xxxxx Xxxxx, Xxxxxx Xxxxx
0 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx, XX 00, Bermuda
Fax: (000) 000 0000
Attention: Xxxx Xxxxxxx
37
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000 0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
(d) if to a Cypress Shareholder, to the address set forth opposite such
Cypress Shareholder's name on Schedule 1, with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxxxxx, Esq.
[the remainder of this page left intentionally blank]
38
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed
by their respective officers thereunto duly authorized, all as of the date first
written above.
SCOTTISH RE GROUP LIMITED
By:_______________________________________
Name:
Title:
MASSMUTUAL CAPITAL PARTNERS LLC
By:_______________________________________
Name:
Title:
SRGL ACQUISITION, LLC
By:_______________________________________
Name:
Title:
[CYPRESS SHAREHOLDERS]
39
SCHEDULE 1
-------------------------------- ------------- --------------------------------
Cypress Shareholder Ordinary Address
Shares
-------------------------------- ------------- --------------------------------
CYPRESS MERCHANT B PARTNERS I 8,850,208 c/o The Cypress Group L.L.C.
(CAYMAN) L.P 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------- ------------- --------------------------------
CYPRESS MERCHANT 376,236 c/o The Cypress Group L.L.C.
B II-A C.V. 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------- ------------- --------------------------------
CYPRESS SIDE-BY-SIDE 18,661 c/o The Cypress Group L.L.C.
(CAYMAN) L.P 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------- ------------- --------------------------------
00XX XXXXXX PARTNERS II 85,405 c/o The Cypress Group L.L.C.
(CAYMAN) L.P. 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------- ------------- --------------------------------
40
