EXHIBIT 7.01
VOTING AGREEMENT AND WAIVER
VOTING AGREEMENT AND WAIVER (this "Agreement"), dated as of November
26, 2006, is made by and 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, a Delaware limited liability
company ("Cerberus" and together with MassMutual, the "Investors") and the
shareholders of the Company listed on Schedule 1 attached hereto (each
individually a "Shareholder" and collectively the "Shareholders").
WITNESSETH:
WHEREAS, simultaneously with the execution of this Agreement 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 convertible cumulative participating
preferred shares, par value $0.01 per share, of the Company (together with the
other transactions and terms contemplated by the Transaction Documents, the
"Transaction"); and
WHEREAS, each Shareholder owns the number of ordinary shares of the
Company, par value $0.01 per share (the "Ordinary Shares") set forth opposite
such Shareholder's name on Schedule 1 hereto (such Ordinary Shares, together
with any other shares, warrants or convertible notes of the Company
Beneficially Owned by such Shareholder as of the date hereof or acquired by
such Shareholder after the date hereof and during the term of this Agreement,
including any shares issued upon the exercise of any warrants or options, the
conversion of any convertible securities or otherwise, being collectively
referred to herein as the "Subject Shares" with respect to such Shareholder);
and
WHEREAS, as inducement and a condition to entering into the
Securities Purchase Agreement, the Investors have required the Shareholders to
agree, and the Shareholders have agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
Section 1. Certain Definitions. In addition to the terms defined
elsewhere herein, capitalized terms used and not defined herein shall have the
respective meanings ascribed to them in the Securities Purchase Agreement. For
purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities means having "beneficial ownership" of such securities as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Without duplicative counting of the same
securities by the same holder, securities Beneficially Owned by a person
include securities Beneficially Owned by all other persons with whom such
person would constitute a "group" within the meaning of Section 13(d) of the
Exchange Act with respect to the securities of the same issuer.
Section 2. Representations and Warranties of Shareholder. Each
Shareholder represents and warrants severally and not jointly and severally,
to the Investors as follows:
(a) Ownership of Shares. Such Shareholder is a record owner and
Beneficial Owner of the Subject Shares set forth opposite such Shareholder's
name on Schedule 1. On the date hereof, the Subject Shares constitute all of
the shares of the Ordinary Shares owned of record or Beneficially Owned by
such Shareholder (including the options, convertible notes, purchase rights
and warrants set forth opposite such Shareholders name on Schedule 1). On the
date hereof other than as subject to the Shareholders' Agreement (as defined
below), such Shareholder does not own or have any rights to (i) any Ordinary
Shares or other voting securities or equity interests of the Company, (ii) any
securities of the Company convertible into or exchangeable or exercisable for
Ordinary Shares or other voting securities or equity interests of the Company
or (iii) options, warrants, other rights, convertible or exchangeable
securities, "phantom" unit rights, share appreciation rights or share-based
performance units. There are no outstanding options or other rights to acquire
from such Shareholder or obligations of such Shareholder to sell or to
acquire, any Ordinary Shares. With respect to the Ordinary Shares held by it,
each Shareholder has sole voting power and sole power to issue instructions
with respect to the matters set forth in Sections 4 and 5 hereof, sole power
of disposition, sole power of conversion and sole power to agree to all of the
matters set forth in this Agreement, in each case with respect to all of the
Subject Shares with no limitations, qualifications or restrictions on such
rights, subject to applicable securities Laws and the terms of this Agreement.
(b) Power; Binding Agreement. Such Shareholder has the legal
capacity, power and authority to enter into and perform all of such
Shareholder's obligations under this Agreement. This Agreement has been duly
and validly executed and delivered and, if such Shareholder is not a natural
person, authorized by such Shareholder and constitutes a valid and binding
agreement of such Shareholder, enforceable against such Shareholder in
accordance with its terms except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency or other similar Laws, now or hereafter in
effect, affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) No Conflicts. Except for any filings, permits, authorizations,
consents, and approvals necessary on the part of the Investors or the Company
to exercise the rights provided to the Investors hereunder or to consummate
the transactions contemplated hereby, no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary
for the execution and delivery of this Agreement by such Shareholder and the
consummation by such Shareholder of the transactions contemplated hereby, and
none of the execution and delivery of this Agreement by such Shareholder, the
consummation by such Shareholder of the transactions contemplated hereby or
compliance by such Shareholder with any of the provisions hereof shall (i) if
a particular Shareholder is not a natural person, conflict with or result in
any breach of any organizational documents applicable to such Shareholder,
(ii) result in a violation or breach of, or constitute (with or without notice
or lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, or material contract, commitment, arrangement,
understanding, agreement or
other instrument or obligation of any kind to which such Shareholder is a
party or by which such Shareholder or any of its properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to such Shareholder or the Subject
Shares, except for any of the foregoing solely with respect to clause (ii)
above, as would not reasonably be expected, individually or in the aggregate,
to materially impair, impede or delay the ability of such Shareholder to
perform its obligations hereunder.
(d) No Encumbrance. Except as permitted by this Agreement, the
Subject Shares are now, and, at all times during the term hereof, will be,
held by such Shareholder free and clear of all Liens, except for any such
Liens arising hereunder.
(e) No Finder's Fees. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of such Shareholder.
(f) Reliance. Each Shareholder understands and acknowledges that
each Investor is entering into the Securities Purchase Agreement in reliance
upon such Shareholder's execution and delivery of this Agreement.
Section 3. Disclosure. Each Shareholder hereby agrees to permit the
Company to publish and disclose in the Disclosure Documents (including all
documents and schedules filed with the SEC), and any press release or other
disclosure document which the Company, in its sole discretion, determines to
be required by applicable Law or necessary in connection with the Transaction
and any transactions related thereto, such Shareholder's identity and
ownership of the Ordinary Shares and the nature of such Shareholder's
commitments, arrangements and understandings under this Agreement provided
that the form of any such disclosure shall be subject to such Shareholder's
prior review and written consent, not to be unreasonably withheld, delayed or
conditioned.
Section 4. Certain Restrictions; Waiver and Termination.
(a) No Solicitation. Each Shareholder shall not (whether directly or
indirectly through affiliates, advisors, agents or other intermediaries), and
each Shareholder shall direct its and its Subsidiaries' respective officers,
directors, affiliates, employees, members, partners, shareholders, advisors,
representatives or other agents retained by or otherwise acting on behalf of
such Shareholder or its Subsidiaries and affiliates (collectively,
"Representatives", provided that such term shall not be deemed to include the
Company or apply to any Representatives of the Company, acting in their
capacity as such on behalf of the Company) not to, directly or indirectly, (i)
solicit, initiate, accept, seek, encourage, induce or facilitate (including by
way of furnishing non-public information) any inquiries or the making or
submission of any proposal that constitutes or could reasonably be expected to
lead to an Acquisition Proposal, or cooperate in any way with any inquiry,
proposal or offer from any other person relating to, that has the purpose of,
or that constitutes or could reasonably be expected to lead to an Acquisition
Proposal, (ii) continue or participate or engage in discussions or
negotiations with, or disclose any information or data relating to the Company
or its Subsidiaries or afford access to the properties, books or records of
the Company or its Subsidiaries to, or otherwise cooperate with,
any person that has made an Acquisition Proposal or to any person that has
disclosed to the Company that it is considering making an Acquisition
Proposal, (iii) accept an Acquisition Proposal or enter into any agreement or
agreement in principle or letter of intent, providing for or relating to an
Acquisition Proposal or enter into any agreement or agreement in principle or
letter of intent requiring the Company to abandon, terminate or fail to
consummate the transactions contemplated by the Securities Purchase Agreement,
or (iv) grant any waiver or release under any standstill, confidentiality or
similar agreement entered into by the Company, its Subsidiaries or any of
their respective Representatives; provided that each Shareholder in such
Shareholder's capacity as a director of the Company, if applicable, shall be
permitted to take any action expressly permitted under the Securities Purchase
Agreement, solely in its capacity as a director of the Company. Each
Shareholder shall and shall cause its Representatives to (i) immediately cease
and cause to be terminated any existing activities, discussions or
negotiations with any persons or their representatives conducted prior to the
date of this Agreement with respect to any Acquisition Proposal and will
request the prompt return or destruction of any confidential information
previously furnished to such persons in connection therewith, and (ii)
promptly inform its Representatives of the obligations undertaken in this
Section 4(a). Without limiting the foregoing, any violation of the
restrictions set forth in this Section 4(a) by any Representative of a
Shareholder or any of its Subsidiaries, whether or not such person is
purporting to act on behalf of such Shareholder or any of its Subsidiaries,
shall be deemed to be a breach of this Section 4(a) by such Shareholder. Each
Shareholder will as promptly as practicable (and in any event within 24 hours)
advise the Investors of any request for information with respect to any
Acquisition Proposal or of any inquiry, proposal, discussions or negotiation
with respect to any Acquisition Proposal, and the material terms and
conditions of such request, Acquisition Proposal, inquiry, proposal,
discussion or negotiation. For purposes of this Agreement, each Investor is
not deemed to be an Affiliate of the Shareholders. So long as no Shareholder
(or its respective Representative) is in breach of this Agreement and subject
to such Shareholder's continued compliance with this Agreement, nothing
contained in this Agreement shall prevent a Shareholder or its Representatives
from negotiating the terms of any agreement (including any shareholders or
similar agreement), or otherwise participating in negotiations together with
the Company, in connection with an Acquisition Proposal in the event that the
Company is pursuing negotiations or discussions with the Person making such
Acquisition Proposal in compliance with Section 5.2(b) of the Securities
Purchase Agreement; provided that, such negotiations by a Shareholder or its
Representatives shall not in and of themselves be deemed to constitute breach
of this Agreement by such Shareholder or its Representatives for the purposes
of this Section 4(a) provided that such Shareholder and its Representatives
are otherwise in compliance with this Agreement.
(b) Certain Prohibited Transfers and Actions. Prior to the
termination of this Agreement, each Shareholder agrees not to, directly or
indirectly:
(i) other than to an affiliate who has agreed in writing
to be bound by the terms of this Agreement with respect to the
transferred Subject Shares, transfer, assign, sell, gift-over,
pledge, encumber or otherwise dispose of any or all of the Subject
Shares or any right or interest therein, or consent to or enter into
any contract, option or other agreement, arrangement or
understanding with respect to any of the foregoing;
(ii) grant any proxy, grant any power of attorney, deposit
any of the Subject Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Subject Shares except
as provided in this Agreement; or
(iii) take any other action that would make any
representation or warranty of such Shareholder contained herein
untrue or incorrect or have the effect of preventing or disabling
such Shareholder from performing its obligations under this
Agreement.
(c) Waiver and Termination. Each Shareholder hereby agrees to waive
(and shall not seek to enforce) any and all rights, indemnities, privileges,
powers or preferences that arise or could reasonably be expected to arise
under that certain Shareholders' Agreement (the "Shareholders' "Agreement"),
dated as of December 31, 2004, by Cypress Merchant B Partners II (Cayman)
L.P., Cypress Merchant Banking II-A C.V., Cypress Side-By-Side (Cayman) L.P.,
55th Street Partners II (Cayman) L.P. (collectively, the "Cypress Investors")
and the Company as a result of the execution of the Transaction Documents and
the consummation of the transactions contemplated thereby, or which could
reasonably be expected, to impede, interfere with, delay, postpone or
adversely affect the transactions contemplated by this Agreement or the
Securities Purchase Agreement, including without limitation, any and all
rights granted pursuant to Article IV of the Shareholders Agreement. The
Shareholders shall enter into (i) one or more termination agreements, each in
form and substance satisfactory to the Investors in their sole discretion, and
deliver to the Investors (prior to Closing) copies of such executed
termination agreements, evidencing the termination, effective immediately
prior to the Closing, by all parties thereto of, the Shareholders Agreement,
Securities Purchase Agreement, dated as of October 17, 2004, by and among the
Company and the Cypress Investors and any other agreements with the Company
that grant to the Shareholders or the Cypress Investors, as the case may be,
any rights, indemnities, preferences, powers or privileges with respect to, or
in connection with, the Company or its Subsidiaries, the Subject Shares or any
other shares of the Company and (ii) at or prior to the Closing, the
Registration Rights and Shareholders Agreement in the form attached hereto as
Exhibit A.
Section 5. Stop Transfer; Legend.
(a) Each Shareholder agrees with, and covenants to, the Investors
that such Shareholder will not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Subject Shares, unless such transfer is made in
compliance with this Agreement.
(b) In the event of a share dividend or distribution, or any change
in the Ordinary Shares by reason of any share dividend, split-up,
recapitalization, combination, exchange of share or the like other than
pursuant to the Transaction, the term "Subject Shares" will be deemed to refer
to and include the Ordinary Shares as well as all such share dividends and
distributions and any shares into which or for which any or all of the Subject
Shares may be changed or exchanged and appropriate adjustments shall be deemed
made to the terms and provisions of this Agreement.
(c) In furtherance of this Agreement, concurrently herewith, each
Shareholder shall, and hereby does authorize the Company to, notify the
Company's transfer agent that there is a stop transfer order with respect to
all of the Subject Shares (and that this Agreement places limits on the voting
and transfer of such shares).
(d) In the event that a Shareholder intends to undertake a transfer,
assignment, sale, gift-over, pledge or other disposition of any of the Subject
Shares as permitted by Section 4(b), such Shareholder shall provide notice
thereof to the Company and shall authorize and instruct the Company to
instruct its transfer agent to (i) lift the stop transfer order in order to
effect such transaction and (ii) re-enter the stop transfer order upon
completion of such transaction, and the Company agrees that it will comply
with such instructions.
(e) For the avoidance of doubt, the obligations contained in this
Section 5 and any restrictions or limitations imposed thereby, shall terminate
and be of no further force or effect at the earlier of (i) termination of this
Agreement and (ii) consummation of the transactions contemplated by the
Securities Purchase Agreement.
Section 6. Voting of the Ordinary Shares. Each Shareholder hereby
agrees that, during the period commencing on the date hereof and continuing
until the first to occur of (a) the Closing or (b) termination of this
Agreement in accordance with its terms, at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of the holders
of Ordinary Shares, however called, or in connection with any written consent
of the holders of Ordinary Shares, such Shareholder shall appear at the
meeting or otherwise cause the Subject Shares to be counted as present thereat
for purposes of establishing a quorum and vote or consent (or cause to be
voted or consented) all of the Subject Shares, in each case to the fullest
extent the Subject Shares are entitled to vote thereon or consent thereto:
(i) in favor of transactions contemplated by the
Transaction Documents, including the approval by the Members of the
matters set forth in Section 2.1(a)(i) of the Securities Purchase
Agreement to the effect as set forth in Section 3.19 thereof and any
actions required in furtherance thereof and hereof; and
(ii) except as otherwise agreed to in writing in advance
by the Investors in their sole discretion, against any of the
following (other than the Transaction and the transactions
contemplated by this Agreement and the Securities Purchase
Agreement): (A) any Acquisition Proposal; (B) any action or
agreement that would, to the knowledge of such Shareholder, result
in a breach in any material respect of any covenant, representation
or warranty or any obligation or agreement of the Company under the
Securities Purchase Agreement or such Shareholder under this
Agreement, and (C) any action which is intended, or which could
reasonably be expected, to impede, interfere with, delay, postpone
or materially adversely affect the transactions contemplated by this
Agreement or the Securities Purchase Agreement.
Section 7. Irrevocable Proxy.
(a) Each Shareholder hereby irrevocably grants to, and appoints,
Xxxxxxxxxxx Xxxxx and Xxxxx X. Port, or either of them, in their respective
capacities as officers of each Investor, as applicable, and any individual who
shall hereafter succeed to any such office of such Investor, and each of them
individually, such Shareholder's proxy and attorney-in-fact (with full power
of substitution and resubstitution), for and in the name, place and stead of
such Shareholder, to vote or cause to be voted the Subject Shares at any
meeting of the members or shareholders of the Company or at any adjournment or
postponement thereof during the term of this Agreement:
(i) in favor of transactions contemplated by the
Transaction Documents, including the approval by the Members of the
matters set forth in Section 2.1(a)(i) of the Securities Purchase
Agreement to the effect as set forth in Section 3.19 thereof and any
actions required in furtherance thereof and hereof; and
(ii) except as otherwise agreed to in writing in advance
by the Investors in their sole discretion, against any of the
following (other than the Transaction and the transactions
contemplated by this Agreement and the Securities Purchase
Agreement): (A) any Acquisition Proposal; (B) any action or
agreement that would, to the knowledge of such Shareholder, result
in a breach in any material respect of any covenant, representation
or warranty or any obligation or agreement of the Company under the
Securities Purchase Agreement or such Shareholder under this
Agreement, and (C) any action which is intended, or which could
reasonably be expected, to impede, interfere with, delay, postpone
or materially adversely affect the transactions contemplated by this
Agreement or the Securities Purchase Agreement.
(b) Each Shareholder represents that any proxies heretofore given in
respect of the Subject Shares are not irrevocable, and that such proxies
either have been or are hereby revoked.
(c) Each Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 7 is given in connection with the execution of the
Securities Purchase Agreement, and that such irrevocable proxy is given to
secure the performance of the duties of such Shareholder under this Agreement.
Except in the event of a termination of this Agreement in accordance with
Section 10 (whereupon this irrevocable proxy shall be automatically revoked),
each Shareholder hereby further affirms that the irrevocable proxy is coupled
with an interest and may not be revoked, except as by amendment or
modification in accordance with Section 12(c) hereof. Each Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy and power of attorney is
executed and intended to be irrevocable in accordance with the Powers of
Attorney Law (1996 Revision) of the Cayman Islands. The power and authority
hereby conferred shall not be terminated by any act of such Shareholder or by
operation of law, by the dissolution of the Shareholder (if such Shareholder
is other than a natural person), by lack of appropriate power or authority, or
by the occurrence of any other event or events and shall be binding upon all
his
representatives, executors, successors and/or assigns. If after the execution
of this Agreement a Shareholder shall dissolve (if such Shareholder is other
than a natural person), cease to have appropriate power or authority, or if
any other such event or events shall occur, the Investors are nevertheless
authorized and directed to vote the Subject Shares in accordance with the
terms of this Agreement as if such dissolution, if applicable, lack of
appropriate power or authority or other event or events had not occurred and
regardless of notice thereof. Notwithstanding anything to the contrary
contained in this Agreement, the irrevocable proxy is subject to, and shall
only become effective upon, the receipt by the Investors of all necessary
regulatory approvals and consents, if any, required under applicable law to
exercise the voting powers granted by such proxy.
Section 8. Fiduciary Duties. Each Shareholder is signing this
Agreement solely in such Shareholder's capacity as an owner of his or her
respective Subject Shares, and nothing herein shall limit, prohibit, prevent
or preclude such individual Shareholder from taking or not taking any action
in his or her capacity as an officer or director of the Company, to the extent
permitted by the Securities Purchase Agreement.
Section 9. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transaction. Each party shall promptly consult with the other and provide any
necessary information and material with respect to all filings made by such
party with any Governmental Entity in connection with this Agreement and the
Securities Purchase Agreement and the transactions contemplated hereby and
thereby.
Section 10. Termination. This Agreement shall terminate on the
earliest of (a) termination of the Securities Purchase Agreement in accordance
with its terms, (b) the written agreement of the parties hereto to terminate
this Agreement, or (c) the Closing.
Section 11. No Ownership Interest. Nothing contained in this
Agreement shall be deemed to vest in the Investors any direct or indirect
ownership or incidence of ownership of or with respect to any Subject Shares.
All rights, ownership and economic benefits of and relating to the Subject
Shares shall remain vested in and belong to the applicable Shareholder, and
the Investors shall have no authority to manage, direct, superintend,
restrict, regulate, govern, or administer any of the policies or operations of
the Company or exercise any power or authority to direct any Shareholder in
the voting of any of the Subject Shares, except as otherwise expressly
provided herein.
Section 12. Miscellaneous.
(a) Entire Agreement. This Agreement (including the documents and
instruments referred to herein, to the extent referenced herein) constitutes
the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.
(b) Successors and Assigns. This Agreement shall not be assigned by
operation of Law or otherwise without the prior written consent of the other
parties hereto. This Agreement shall be binding upon, inure to the benefit of
and be enforceable by each party and such party's respective heirs,
beneficiaries, executors, representatives and permitted assigns.
(c) Amendment and Modification. This Agreement may not be amended,
altered, supplemented or otherwise modified or terminated (other than a
termination under Section 10(a) or Section 10(c) of this Agreement) except
upon the execution and delivery of a written agreement executed by the parties
hereto.
(d) Notices. All notices, requests, claims and demands and other
communications hereunder shall be in writing and shall be deemed duly
delivered (i) four Business Days after being sent by registered or certified
mail, return receipt requested, postage prepaid, or (ii) one Business Day
after being sent for next business day delivery, fees prepaid, via a reputable
nationwide overnight courier service, in each case to the intended recipient
as set forth below:
If to Cerberus, to:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx Xxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxxx, Esq.
If to MassMutual, to:
c/o MassMutual Financial Group
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Port
with a copy to:
Ropes & Xxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to the Company, to:
Scottish Re Group Limited
Xxxxx Xxxxx, Xxxxxx Xxxxx
0 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx, XX 00, Bermuda
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to Shareholder, to the address set forth opposite such Shareholder's name
on Schedule 1, with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Any party may give any notice or other communication hereunder using
any other means (including personal delivery, messenger service, facsimile or
ordinary mail), but no such notice or other communication shall be deemed to
have been duly given unless and until it is actually received by the party for
whom it is intended. Any party may change the address to which notices and
other communications hereunder are to be delivered by giving the other parties
to this Agreement notice in the manner herein set forth.
(e) Severability. Any term or provision of this Agreement which is
held to be invalid, illegal or unenforceable in any respect in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
(f) Specific Performance. The parties 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. No remedy shall be exclusive of any other
remedy. All available remedies shall be cumulative.
(g) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at Law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, will not constitute a waiver by
such party of its right to exercise any such or other right, power or remedy
or to demand such compliance.
(h) No Third Party Beneficiaries. This Agreement is not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal 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 applicable by statute and would
require or permit the application of the laws of another jurisdiction, except
that the laws of the Cayman Islands shall apply to the extent required in
connection with the execution and irrevocability of the proxy and power of
attorney given under Section 7 hereof, the meeting of shareholders or members
of the Company, and the exercise of voting rights thereat.
(j) Descriptive Heading. The descriptive headings used herein are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
(k) Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
(l) Further Assurances. From time to time, at any other party's
request and without further consideration (but without any obligation to incur
any expense), each party hereto shall execute and deliver such additional
documents and take all such further lawful action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
(m) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(n) Submission to Jurisdiction. Each party hereby irrevocably and
unconditionally agrees that any action, suit or proceeding, at Law or equity,
arising out of or relating to this Agreement or any agreements or transactions
contemplated hereby (an "Action") shall only be brought in any United States
federal court or any New York state court, in either case, sitting in the City
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 (by way of motion, as a
defense or otherwise) any and all jurisdictional, venue and convenience
objections or defenses that such party may have in such Action. Each party
hereby irrevocably and unconditionally consents to the service of process of
any of the aforementioned courts. 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 enforce judgments obtained in any action, suit or
proceeding brought pursuant to this Section 12(n).
[Remainder of this page intentionally left
blank. Signature page follows.]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as a deed as of the day and year first written above.
Witness SCOTTISH RE GROUP LIMITED
/s/ XXXX XXXXXXX
---------------------------------- ---------------------------------------
By: Xxxx Xxxxxxx
---------------------------------- ---------------------------------------
Its: President and Chief Executive Officer
---------------------------------- ---------------------------------------
---------------------------------------
Witness SRGL ACQUISITION, LLC
By: Cerberus Capital Management, L.P.,
---------------------------------- as Managing Member
/s/ XXXX X. NEPORENT
---------------------------------------
By: Xxxx Xxxxxxxx
Its: Chief Operating Officer and
Managing Director
Witness MASSMUTUAL
/s/ XXXXX PORT
---------------------------------- ---------------------------------------
By: Xxxxx Port
Its: Managing Director
Witness SHAREHOLDERS:
CYPRESS MERCHANT B PARTNERS II
(CAYMAN) L.P.
/s/ XXXXXXX X. XXXXXX
---------------------------------- ---------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Director
CYPRESS MERCHANT B II-A C.V.
/s/ XXXXXXX X. XXXXXX
---------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Director
CYPRESS SIDE-BY-SIDE (CAYMAN) L.P.
/s/ XXXXXXX X. XXXXXX
---------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Director
55TH STREET PARTNERS II (CAYMAN) L.P.
/s/ XXXXXXX X. XXXXXX
---------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Director
SCHEDULE 1
---------------------------- --------------------- ---------------- ----------------- ------------- ------------------
Shareholder Ordinary Shares Options Warrants Purchase Address
Rights
---------------------------- --------------------- ---------------- ----------------- ------------- ------------------
CYPRESS MERCHANT B 0 0 0 c/o The Cypress
PARTNERS II (CAYMAN) L.P. 8,850,208 Group L.L.C.
00 Xxxx 00xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx
Xxxx 00000
---------------------------- --------------------- ---------------- ----------------- ------------- ------------------
CYPRESS MERCHANT B II-A 0 0 0 c/o The Cypress
C.V. 376,236 Group L.L.C.
00 Xxxx 00xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx
Xxxx 00000
---------------------------- --------------------- ---------------- ----------------- ------------- ------------------
CYPRESS SIDE-BY-SIDE 0 0 0 c/o The Cypress
(CAYMAN) L.P. 18,661 Group L.L.C.
00 Xxxx 00xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx
Xxxx 00000
---------------------------- --------------------- ---------------- ----------------- ------------- ------------------
00XX XXXXXX PARTNERS II 0 0 0 c/o The Cypress
(CAYMAN) L.P. 85,405 Group L.L.C.
00 Xxxx 00xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx
Xxxx 00000
---------------------------- --------------------- ---------------- ----------------- ------------- ------------------
EXHIBIT A
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:
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").
In satisfaction of certain conditions to the obligations of the parties
to the Securities Purchase Agreement, the parties are entering into this
agreement.
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:
Demand Registrations.
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.
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 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.
Short-Form Registrations.
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) 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.
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.
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 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.
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 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.
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 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.
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).
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.
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.
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.
Piggyback Registrations.
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.
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.
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.
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.
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 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.
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.
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:
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;
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);
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;
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);
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;
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;
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 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;
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);
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;
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);
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 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;
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;
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;
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;
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 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;
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;
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;
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;
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);
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;
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
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
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.
Registration Expenses.
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.
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").
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.
Indemnification.
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.
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, 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.
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.
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.
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, 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.
Participation in Underwritten Registrations.
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 to agree to any
indemnification obligations on the part of such Holder that are greater than
its obligations pursuant to Section 6(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).
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:
make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all
times,
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
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.
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
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.
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.
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 of director nominees and voting in favor of
such nominees, as applicable in each case), so that:
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.
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.
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.
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.
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 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.
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).
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.
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.
Transfer Restrictions.
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 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.
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.
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:
a merger, consolidation, amalgamation, scheme of arrangement or
business combination with either Investor or its Affiliates; or
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.
Preemptive Rights.
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 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.
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.
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 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.
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.
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.
"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 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.
"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 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).
"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.
Miscellaneous.
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.
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).
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.
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.
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 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.
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.
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.
Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
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 applicable by statute and would
require or permit the application of the laws of another jurisdiction.
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.
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.
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 enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section 16(l).
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.
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
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
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]
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]
SCHEDULE 1
-------------------------------------------------- -------------------- ---------------------------------------
Cypress Shareholder Ordinary Shares Address
-------------------------------------------------- -------------------- ---------------------------------------
CYPRESS MERCHANT B PARTNERS II (CAYMAN) L.P. c/o The Cypress Group L.L.C.
8,850,208 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------------------------- -------------------- ---------------------------------------
-------------------------------------------------- -------------------- ---------------------------------------
CYPRESS MERCHANT B II-A C.V. c/o The Cypress Group L.L.C.
376,236 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------------------------- -------------------- ---------------------------------------
-------------------------------------------------- -------------------- ---------------------------------------
CYPRESS SIDE-BY-SIDE (CAYMAN) L.P. c/o The Cypress Group L.L.C.
18,661 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------------------------- -------------------- ---------------------------------------
-------------------------------------------------- -------------------- ---------------------------------------
00XX XXXXXX PARTNERS II (CAYMAN) L.P. c/o The Cypress Group L.L.C.
85,405 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------------------------- -------------------- ---------------------------------------
