Exhibit 4.6
SECOND SUPPLEMENTAL INDENTURE
among
Mutual Group Ltd., as Issuer,
Mutual Risk Management Ltd., as Guarantor,
and
The Chase Manhattan Bank, as Trustee,
dated as of May 8, 2001
This Second Supplemental Indenture (the "Second Supplemental Indenture") is
made as of May 8, 2001, by and among Mutual Group Ltd., a Delaware corporation,
as Issuer (the "Company"), Mutual Risk Management Ltd., as Guarantor (the
"Guarantor"), and The Chase Manhattan Bank, as Trustee (the "Trustee") under the
Indenture dated as of September 21, 2000 among the Company, the Guarantor and
the Trustee (the "Base Indenture" and together with the First Supplemental
Indenture thereto dated as of September 21, 2000 (the "First Supplemental
Indenture"), the "Indenture").
WITNESSETH:
WHEREAS, the Company, the Guarantor and the Trustee entered into the First
Supplemental Indenture to provide for the establishment of a new series of the
Company's Securities known as its Auction Rate Reset Senior Notes Series A (the
"Senior Notes");
WHEREAS, MRM Capital Trust I, a statutory business trust organized under
the laws of the State of Delaware (the "Trust") purchased from the Company
certain of the Senior Notes pursuant to the Senior Note Purchase Agreement dated
as of September 21, 2000 between the Company and the Trust;
WHEREAS, the parties hereto desire to amend and supplement the Indenture as
set forth herein;
WHEREAS, the Base Indenture provides for the amendment of its terms and the
terms of any supplemental indenture, subject to satisfaction of certain
requirements, including the consent of all the holders of the Senior Notes;
WHEREAS, all things necessary to make this Second Supplemental Indenture a
valid instrument in accordance with its terms have been done;
NOW THEREFORE, in consideration of their mutual covenants contained herein,
the parties hereto, intending to be legally bound, hereby mutually covenant and
agree as follows:
ARTICLE 1
AMENDMENTS
Section 1.01. Definitions. (a) Capitalized terms used and not defined in
this Second Supplemental Indenture shall have the meanings assigned to them in
the First Supplemental Indenture.
(b) The definition of Trigger Event in Section 1.01 of the First
Supplemental Indenture is hereby superseded in its entirety by the following:
"Trigger Event" means the occurrence of any of the following: (a)
May 17, 2001, if no Mutual Party has issued to any XL Entity and
other purchasers at least $100,000,000 in aggregate principal amount
of any XL Securities (of which at least $50,000,000 are to be
purchased for investment by an XL Entity) prior to such date, (b)
any issued XL Securities become due and payable or the holders
thereof have the right to require the relevant Mutual Party to
purchase such XL Securities, (c) on (i) any Trading Day from and
including the date four months from the first date of issuance of
any XL Securities (the "Initial XL Issuance Date") to but excluding
the date six months from the Initial XL Issuance Date, if the
Restructuring has not been completed by 9:00 a.m., New York City
time on such Trading Day and the Closing Price of the Common Shares
on the immediately preceding Trading Day is less than $8.00 or (ii)
the first Business Day six months after the Initial XL Issuance
Date, if the Restructuring has not been completed, (d) after 9:00
a.m., New York City time, on the tenth day immediately following the
date the Restructuring has been completed or (e) the One Hundred
Million Dollar Trigger.
(c) The following new definitions shall supplement those definitions set
forth in Section 1.01 of the First Supplemental Indenture:
"Amendment No. 1" means Amendment No. 1 to the Remarketing
Agreement dated as of May 8, 2001.
"Initial XL Issuance Date" has the meaning set forth in the
definition of Trigger Event.
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"Mutual Party" means each of the Company, the Guarantor and
each of their respective affiliates and subsidiaries and any
entity formed in connection with the Restructuring.
"Newco" shall have the meaning set forth in Annex A to
Amendment No. 1.
"One Hundred Million Dollar Trigger" means at any time from
and including the Initial XL Issuance Date to but excluding the
date on which the holders of the XL Securities no longer have any
right to, or could not pursuant to the terms of the XL Securities
upon the occurrence of any event, have any right to, require a
Mutual Party to repurchase such XL Securities, the sum of the
amounts in the Separate Account and the collateral account
referred to in Section 3(a)(x) of the Remarketing Agreement does
not equal at least $100,000,000 at that time.
"Restructuring" shall have the meaning set forth in Annex A
to Amendment No. 1.
"Separate Account" means the account established by the
Company with Fleet National Bank pursuant to Section 3(a)(x) of
the Remarketing Agreement, as amended.
"XL Entity" means XL Capital Ltd. or any subsidiary or
affiliate thereof.
"XL Securities" means any debt securities issued by any
Mutual Party to any XL Entity and any other securities of the
same class issued to any other purchasers, together with the
voting preferred stock described in the "Voting Preferred Stock"
section of Annex A to Amendment No. 1 (it being understood that
the Warrants (as defined in Annex A to Amendment No. 1) shall not
be deemed to be XL Securities).
Section 1.02. Cancellation by Trust. Article 2 of the First Supplemental
Indenture is hereby supplemented by the addition of the following new Section
2.08:
SECTION 2.08. Cancellation by Trust. If all of the
outstanding Preferred Securities and Common Securities are
surrendered by the Holders thereof pursuant to Section 7.12 of
the Amended and Restated Trust Agreement, as amended, the Trust
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shall deliver the aggregate principal amount of the outstanding
Senior Notes to the Trustee for cancellation. The Trustee shall
promptly cancel all Senior Notes surrendered by the Trust for
cancellation and shall dispose of all such canceled Senior Notes
in accordance with its customary practices. Upon cancellation of
all of the Senior Notes pursuant to this Section 2.08, the
Indenture shall be deemed satisfied and discharged and shall
cease to be of further effect, except as otherwise provided for
in Article 4 of the Indenture.
Section 1.03. Remarketing Provisions. (a) Sections 8.02(a) and (b) of the
First Supplemental Indenture are hereby superseded in their entirety by the
following:
SECTION 8.02. (a) Remarketing Procedures.(i) Subject to
Section 8.04, upon and at any time after the occurrence of a
Trigger Event or a Cross Default and if the Senior Notes have
been distributed to the holders of the Trust Securities, the
holders of a majority in principal amount of the Senior Notes
(the "Requesting Holders") will have the right to require
remarketing of the Senior Notes. The Requesting Holders may
exercise this right by delivering a written notice to the
Remarketing Agent by 10:00 a.m. on any date on or after the date
on which such Trigger Event or Cross Default occurs. Upon the
receipt of such notice, the Remarketing Agent shall immediately
deliver a written notice to the Company on behalf of the
Requesting Holders (the "Remarketing Notice"). If the Requesting
Holders exercise their right to require the remarketing of the
Senior Notes, the Reset Date shall be the date on which such
Remarketing Notice is delivered.
(ii) If the Requesting Holders do not exercise their
right to require the remarketing of the Senior Notes
pursuant to Section 8.02(a)(i) above with respect to any
Trigger Event or Cross Default, the Requesting Holders shall
have the right to require the remarketing of the Senior
Notes in accordance with Section 8.02(a)(i) at any
subsequent time with respect to the same Trigger Event or
Cross Default or with respect to any subsequent Trigger
Event or Cross Default.
(b) If the Company and the Guarantor have complied in all
material respects with all covenants set forth in the Remarketing
Agreement, as amended, then by 3:00 p.m., New York City time,
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on the Reset Date, the Remarketing Agent shall request Bids from
the Reference Corporate Dealers. The Remarketing Agent shall
disclose to Company the Bids obtained and determine the lowest
Bid Rate (the "Winning Bid Rate") from among the Bids obtained on
the Reset Date. By 4:30 p.m., New York City time, on the Reset
Date, the Remarketing Agent shall notify the Company and the
Property Trustee of the Winning Bid Rate. If on a Reset Date,
Bids are not submitted by at least two Reference Corporate
Dealers, or if the lowest Bid submitted would result in a Winning
Bid Rate in excess of the rate permitted by applicable law, or if
the Company and the Guarantor have not complied in all material
respects with all covenants set forth in the Remarketing
Agreement, as amended, the Remarketing shall be deemed to be a
Failed Remarketing on such date; provided, that the Company's
obligation to furnish the Offering Memorandum to the Remarketing
Agent by 11:00 a.m. (New York City time) on the Reset Date
pursuant to Section 13 of the Remarketing Agreement shall not be
subject to the foregoing qualification as to materiality. The
Winning Bid Rate determined by the Remarketing Agent, absent
manifest error, shall be binding and conclusive upon the holders
of the Trust Senior Notes, the Company, the Guarantor and the
Trust.
Section 1.04. Successful Remarketing. Section 8.02(d) of the First
Supplemental Indenture shall be supplemented by the following:
On the Remarketing Settlement Date following the settlement of
the purchase and sale of the Senior Notes, the provisions of this
Section 8.02 (other than Sections 8.02(i) and 8.02(j)) shall
terminate and shall be of no further effect.
Section 1.05. Failed Remarketing. (a) Section 8.05 of the First
Supplemental Indenture is hereby superseded in its entirety by the following:
SECTION 8.05. Failed Remarketing. The Remarketing Agent
shall give notice of any Failed Remarketing on or after the date
such Failed Remarketing occurs to the Company, the Trustee and
the Paying Agent.
Section 1.06. Interest Rate. Each reference to "150 basis points" in the
First Supplemental Indenture and in each of the Exhibits thereto is hereby
superseded by a reference to "566 basis points". Such amended Interest Rate
shall be effective on and as of April 1, 2001. Upon surrender of any
certificates representing Senior Notes, replacement certificates representing
such Senior Notes
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and reflecting this Amendment shall be executed by the Company, with the
Guarantee endorsed thereon executed by the Guarantor, and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver such Senior Notes to the holders of the Senior Notes in accordance with
the Base Indenture.
Article 2
COVENANTS
Section 2.01. Additional Guarantors. If any Mutual Party incurs any direct
obligation, or guarantees the obligations of any other Person, with respect to
any XL Securities, the Company and the Guarantor will immediately notify the
Remarketing Agent and the Trustee thereof and will cause such Mutual Party to
fully and unconditionally guarantee all the Company's obligations under the Base
Indenture, as supplemented by the First Supplemental Indenture and the Second
Supplemental Indenture, and to become subject to the provisions of Article XIV
of the Base Indenture and such Mutual Party shall be deemed to be a "Guarantor"
for purposes thereof as supplemented by the First Supplemental Indenture and
this Second Supplemental Indenture.
Section 2.02. Limitation on Liens. If any Mutual Party creates, assumes,
incurs, or otherwise permits to exist any Lien on any property now owned or
hereafter acquired, which such Lien secures any obligations of any Mutual Party
under any XL Securities or any guarantee thereof (other than the segregation of
proceeds into a collateral account for the payment of interest on the XL
Securities pursuant to the section entitled "Use of Proceeds" of Annex A to
Amendment No. 1), the Company and the Guarantor will immediately notify the
Remarketing Agent and the Trustee thereof and will cause such Mutual Party to
secure any obligations of any Mutual Party under the Senior Notes and any
guarantee thereof by such Mutual Party equally and ratably with such XL
Securities or such guarantee thereof.
Section 2.03. Limitation on Senior Debt. No Mutual Party will create,
incur, assume or permit to exist any Debt, other than the XL Securities or any
guarantee thereof, not outstanding on the date hereof that ranks pari passu with
or senior to the Senior Notes in right of payment. For purposes hereof, "Debt"
shall mean, with respect to any Mutual Party at any date and without
duplication: (a) all liabilities, obligations and indebtedness for borrowed
money, including but not limited to obligations evidenced by bonds, debentures,
notes or other similar instruments of any such Person, (b) all obligations to
pay the deferred purchase price of property or services of any such Person
(other than trade payables due
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from such Person and arising in the ordinary course of business for not more
than 90 days not subject to (a) above), (c) all obligations of such Person under
a lease that are required to be capitalized and accounted for as capital lease
obligations under GAAP, (d) all Debt of any other Person secured by a Lien on
any asset of any such Person, (e) all obligations, contingent or otherwise, of
any such Person relating to the face amount of letters of credit, whether or not
drawn, and banker's acceptances issued for the account of any such Person, but
excluding any obligation relating to an undrawn letter of credit if the undrawn
letter of credit is issued in connection with a liability for which a reserve
has been established by such Person in accordance with GAAP, (f) all obligations
incurred by any such Person pursuant to any interest rate protection agreements
and/or other types of hedging agreements which are due and payable and (g) all
contingent obligations of any such Person with respect to Debt referred to in
clauses (a) through (f) of this definition. For purposes hereof, "GAAP" shall
mean generally accepted accounting principles as in effect from time to time in
the United States.
ARTICLE 3
Miscellaneous
Section 3.01. Conditions. On or prior to the date hereof, the Trustee
shall have received (a) a resolution from the board of directors of each of the
Company and the Guarantor pursuant to Section 9.2 of the Base Indenture that
such Second Supplemental Indenture has been authorized by such board, (b) an
Officers' Certificate from each of the Company and the Guarantor pursuant to
Section 1.2 of the Base Indenture and (c) an Opinion of Counsel pursuant to
Sections 1.2 and 9.3 of the Base Indenture.
Section 3.02. Ratification of Base Indenture and First Supplemental
Indenture; Second Supplemental Indenture Controls. The Base Indenture and the
First Supplemental Indenture, as supplemented by this Second Supplemental
Indenture, are in all respects ratified and confirmed, and this Second
Supplemental Indenture shall be deemed part of the Base Indenture and the First
Supplemental Indenture in the manner and to the extent herein and therein
provided. The provisions of this Second Supplemental Indenture shall supersede
the provisions of the Base Indenture and the First Supplemental Indenture to the
extent the Base Indenture or the First Supplemental Indenture is inconsistent
herewith.
Section 3.03. Governing Law. This Second Supplemental Indenture and the
rights of the parties hereunder shall be governed by and construed in accordance
with the laws of the State of New York and all rights and remedies
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shall be governed by such laws, without reference to the choice of laws rules
thereof.
Section 3.04. Severability. If any provision in this Second Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 3.05. Counterparts. The parties may sign any number of copies of
this Second Supplemental Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. Any signed copy shall be
sufficient proof of this Second Supplemental Indenture.
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IN WITNESS WHEREOF, the undersigned have caused this Second Supplemental
Indenture to be executed as of the date first above written.
MUTUAL GROUP LTD.
By: /s/ Xxxxxxxxx X. Xxxxx
____________________________
Name: Xxxxxxxxx X. Xxxxx
Title: Assistant Secretary
MUTUAL RISK MANAGEMENT
LTD., as Guarantor
By: /s/ Xxxxxxxxx X. Xxxxx
____________________________
Name: Xxxxxxxxx X. Xxxxx
Title: Secretary
THE CHASE MANHATTAN
BANK, as Trustee
By: /s/ Sheik Wiltshire
____________________________
Name: Sheik Wiltshire
Title: Assistant Vice President
Consented to:
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely
as Property Trustee of the Trust and
holder of the Senior Notes
By: /s/ Sheik Wiltshire
____________________________
Name: Sheik Wiltshire
Title: Assistant Vice President
