Exhibit 99.4
CONFORMED COPY
REGISTRATION RIGHTS AGREEMENT
AMONG
MARKEL CORPORATION
AND
DLJ INTERNATIONAL PARTNERS, C.V.
DLJ OFFSHORE PARTNERS, C.V.
DLJMB OVERSEAS PARTNERS, C.V.
DLJ MERCHANT BANKING FUNDING, INC.
DLJ FIRST ESC, L.P.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
AND
MARSH & MCLENNAN CAPITAL, INC.
AND
JOHN J. BYRNE
Dated as of August 15, 1999
TABLE OF CONTENTS
PAGE
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SECTION 1. Definitions...................................................2
SECTION 2. Registration under Securities Act.............................4
SECTION 3. Other Registration Rights....................................16
SECTION 4. Markel Guarantee.............................................16
SECTION 5. Amendments and Waivers.......................................16
SECTION 6. Notices......................................................17
SECTION 7. Binding Agreement............................................17
SECTION 8. Descriptive Headings.........................................18
SECTION 9. Specific Performance.........................................18
SECTION 10. Effectiveness...............................................18
SECTION 11. Termination.................................................18
SECTION 12. Governing Law...............................................18
SECTION 13. Counterparts................................................18
SECTION 14. Entire Agreement............................................19
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is made as of August 15, 1999, by and
among MARKEL CORPORATION, a Virginia corporation ("Markel"), DLJ INTERNATIONAL
PARTNERS, C.V., a Netherlands Antilles limited partnership, DLJ OFFSHORE
PARTNERS, C.V., a Netherlands Antilles limited partnership, DLJMB OVERSEAS
PARTNERS, C.V., a Netherlands Antilles limited partnership, DLJ MERCHANT BANKING
FUNDING, INC., a Delaware corporation, DLJ FIRST ESC, L.P., a Delaware limited
partnership and DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, a Delaware
corporation (collectively, the "DLJ Entities"), MARSH & MCLENNAN CAPITAL. INC.,
a Delaware corporation, on behalf of itself and/or MARSH & MCLENNAN RISK CAPITAL
HOLDINGS, LTD., a Delaware corporation, other related Marsh & McLennan Capital,
Inc. entities and/or RISK CAPITAL REINSURANCE COMPANY, a Nebraska domiciled
insurance company (collectively, "Marsh") and JOHN J. BYRNE, on his own behalf
and on behalf of certain entities as to which, with respect to Common Shares
held by such entities, he has voting and dispositive power ("Byrne").
A. Simultaneously herewith, Markel and Terra Nova (Bermuda) Holdings
Ltd., a Bermuda corporation ("TNA"), entered into an Agreement and Plan of
Merger and Scheme of Arrangement (the "Merger Agreement").
B. The Merger Agreement provides for (i) the merger (the "Merger") of
Mint Sub Ltd., a corporation to be organized under the laws of Virginia and a
wholly-owned subsidiary of Virginia Holdings Inc., a corporation to be organized
under the laws of Virginia (the "Company"), with and into Markel and (ii) a
Scheme of Arrangement between TNA and certain of its shareholders (the
"Scheme"). Pursuant to the Merger Agreement, the holders of the outstanding
stock of TNA will be entitled to receive the applicable consideration set forth
in the Merger Agreement. Holders of the outstanding stock of TNA who elect to
receive Common Stock Consideration (as defined in the Merger Agreement) in the
Merger will receive ordinary shares of the Company, no par value (the "Common
Shares"), and will become shareholders of the Company. Upon consummation of the
Merger and the Scheme, TNA and Markel will be wholly-owned subsidiaries of the
Company, which, at such time, will change its name to Markel Corporation.
C. TNA and the DLJ Entities are parties to that certain Registration
Rights Agreement dated as of March 25, 1996, among TNA and certain of its
stockholders, pursuant to which such stockholders were accorded certain
registration rights with respect to the ordinary shares of TNA held by them (the
"TNA Registration Rights Agreement").
In consideration of the parties entering into the agreements and carrying
out the transactions herein described, and for other good and valuable
consideration, the parties agree as follows:
SECTION 1. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person;
provided that no stockholder of the Company shall be deemed an Affiliate of any
other stockholder of the Company solely by reason of any investment in the
Company. For the purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), when used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Company.
"Commission" means the Securities and Exchange Commission or any other
United States agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, or any similar
United States statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Permitted Transferee" means, in the case of any DLJ Entity, (A) any other
DLJ Entity, (B) any general or limited partner of any DLJ Entity (a "DLJ
Partner"), and any corporation, partnership, Affiliated Employee Benefit Trust
or other entity that is an Affiliate of any DLJ Partner (collectively, the "DLJ
Affiliates"), (C) any managing director, general partner, director, limited
partner, officer or employee of Donaldson, Lufkin & Jenrette, Inc. or any entity
controlled by Donaldson, Lufkin & Jenrette, Inc., or the heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries of any of the
foregoing persons referred to in this clause (C) (collectively, "DLJ
Associates"), (D) a trust, the
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beneficiaries of which, or a corporation, limited liability company or
partnership, the stockholders, members or general or limited partners of which,
include only DLJ Entities, DLJ Affiliates, DLJ Associates, their spouses or
their lineal descendants or (E) a voting trustee for one or more DLJ Entities,
DLJ Affiliates or DLJ Associates under the terms of a voting trust designated to
conform with the requirements of the Insurance Law of the State of New York.
"Registrable Securities" means (i) any outstanding Common Shares held by
any Stockholder as of the effective date of this Agreement and (ii) any
securities issued with respect to any such Common Shares by way of stock
dividend or stock split. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities (i) when a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been
distributed in accordance with such registration statement, (ii) when such
securities have been distributed to the public pursuant to Rule 144 (or any
successor provision) under the Securities Act, (iii) when such securities shall
have been otherwise transferred, except as contemplated by Section 7 of this
Agreement, or (iv) when such securities shall have ceased to be outstanding.
"Registration Expenses" means (i) all registration, filing and NASD fees,
(ii) fees and expenses of complying with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the shares covered by such registration), (iii) printing
expenses, (iv) internal expenses of the Company (including all salaries and
expenses of its officers and employees performing legal and accounting duties),
(v) reasonable fees and disbursements of counsel for the Company and of its
independent certified public accountants, including the expenses relating to
"cold comfort" letters requested pursuant thereto, (vi) not more than $25,000 of
reasonable fees and disbursements of one counsel for the Stockholders in
connection with their participation in any offering, (vii) the reasonable fees
and expenses of special experts retained by the Company in connection with such
registration, premiums and other costs of policies of insurance against
liabilities arising out of the public offering of the Registrable Securities
being registered (if the Company elects to obtain any such insurance), and
(viii) any fees and disbursements of underwriters customarily paid by issuers
or sellers of securities, but excluding underwriting discounts and commissions
and transfer taxes, if any, and the fees and expenses of counsel for the
underwriters.
"Requesting Holder" means, in respect of any registration pursuant to
Section 2 hereof, any holder of Registrable Securities who gives notice to the
Company of its request to include Registrable Securities in such registration.
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"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act as such rule may be amended from time to time, or any similar
rule then in force.
"Securities Act" means the Securities Act of 1933, or any similar United
States statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Stockholders" means any of the DLJ Entities, Byrne or Marsh, acting on
behalf of itself, other related Marsh & McLennan Capital, Inc. entities and/or
Marsh & McLennan Risk Capital Holdings, Ltd. and/or Risk Capital Reinsurance
Company.
SECTION 2. Registration under Securities Act.
(a) Registration on Request.
(i) Request. If at any time any DLJ Entity or Marsh requests in
writing (the requesting Person being referred to as the "Initiating
Stockholder") that the Company effect the registration under the Securities
Act of a specified number of the Registrable Securities held by it and
specifying the intended method of disposition thereof, a copy of which
request (the "Company Notice") shall be sent by the Company to the other
Persons entitled to request registration under this Section 2(a) that have
not made such registration request (the "Other Stockholders"), the Company
will, in accordance with the provisions of Section 2(c) hereof, use its
commercially reasonable efforts to effect the registration under the
Securities Act of the Registrable Securities which the Company has been so
requested to register by the Initiating Stockholder and by any Other
Stockholders, so long as such Other Stockholders have requested that such
Registrable Securities be included in such registration within 10 days of
the date of the Company Notice, for disposition in accordance with the
intended method or methods of disposition stated in the request by the
Initiating Stockholder, all to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid)
of Registrable Securities to be so registered; provided that the Company
shall not be required to effect (A) more than three registrations requested
by the DLJ Entities pursuant to this Section 2(a), (B) more than two
registrations requested by Marsh pursuant to this Section 2(a), (C) any
registration under this Section 2(a) unless the Registrable Securities
requested to be included therein by the Initiating Stockholder, in the
reasonable judgment of the Board exercised in good faith, have an aggregate
fair market value of at least $25,000,000, unless the Registrable
Securities requested to be
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included therein constitute all of the Registrable Securities then owned by the
Initiating Stockholder (and, in case of any DLJ Entity, all other DLJ Entities)
or (D) any registration under this Section 2(a) prior to the earlier of the date
that is six months after the effective date of the Company's most recent
registration statement (other than a registration on Form S-4 or Form S-8 or any
successor or similar forms) pursuant to which Registrable Securities are to be
or were sold pursuant to this Section 2(a) or the date that is three months
after the effective date of the Company's most recent registration statement
(other than a registration on Form S-4 or Form S-8 or any successor or similar
forms) pursuant to which the DLJ Entities or Marsh were entitled to request that
Registrable Securities be sold pursuant to Section 2(b). Any request by an
Initiating Stockholder pursuant to the first sentence of this Section 2(a) shall
indicate that such Initiating Stockholder intends, in good faith, to dispose of
all of the Registrable Securities as to which a request is made pursuant to this
Section 2(a) pursuant to an underwritten public offering; provided that such
intention shall not preclude a change to the plan of distribution to allow block
trades, it being understood that no such change may be made with the intention
of converting such registration into the functional equivalent of an "equity
shelf." A request to register Registrable Securities pursuant to this Section
2(a) that is made by any DLJ Entity or Marsh, as the case may be, in its
capacity as an "Other Stockholder" shall not reduce the number of registrations
available to such entity pursuant to paragraph (A) or (B), as the case may be,
of this Section 2(a)(i).
(ii) Effective Registration Statement. A registration requested pursuant
to this Section 2(a) shall not be deemed to be effected pursuant to Section 2(a)
(A) if a registration statement with respect thereto shall not have become
effective and remained effective for a period of at least 180 days (or such
shorter period in which the Registrable Securities included in such registration
pursuant to Section 2(a) have been sold thereunder), (B) if, after it has become
effective, such registration is interfered with for any reason by any stop
order, injunction or other order or requirement of the Commission or any other
governmental agency or any court, and the result of such interference is to
prevent the holders of Registrable Securities to be sold thereunder from
disposing of at least 75% of the Registrable Securities included in such
registration pursuant to Section 2(a) in accordance with the intended methods of
disposition or (C) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with any
underwritten registration shall not be satisfied or waived with the consent of
the holders of Registrable Securities that were to have been sold thereunder,
other than as
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a result of any breach by any holder of its obligations thereunder or
hereunder.
(iii) Expenses. The Company shall pay all Registration Expenses in
connection with any registration requested pursuant to this Section 2(a).
(iv) Priority in Requested Registrations. If a requested registration
pursuant to this Section 2(a) involves an underwritten offering, and the
managing underwriter shall advise the Company in writing that, in its view, (1)
the number of securities requested, pursuant to this Section 2(a), to be
included in such registration (including Common Shares which the Company
proposes to include, whether or not for the sale for its own account, which are
not Registrable Securities) or (ii) the inclusion of some or all of the Common
Shares owned by other shareholders of the Company (including Registrable
Securities proposed to be included by any Stockholder pursuant to Section 2(b)),
in either case, exceeds the number which can be sold in such offering without
having an adverse impact on such offering, including the price at which such
shares can be sold (the "Maximum Offering Size"), the Company will include in
such registration, in the priority listed below, up to the Maximum Offering Size
(A) first, Registrable Securities requested, pursuant to this Section 2(a), to
be included in such registration by the DLJ Entities and Marsh, as the case may
be, (pro rata as between them based on the number of Registrable Securities
proposed to be so registered) and (B) second, Registrable Securities requested
to be included in such registration by the Company for its own account, by Byrne
pursuant to Section 2(b) or by any other holder of Common Shares having
registration rights, in the case of this paragraph (B), pro rata among such
holders on the basis of the number of Registrable Securities requested to be so
registered; provided that if, as a result of any reduction in Registrable
Securities to be sold as contemplated by this Section 2(a)(iv), the Initiating
Stockholder is entitled to sell pursuant to such registration less than 65% of
the Registrable Securities requested to be included pursuant to Section 2(a),
the request by the Initiating Stockholder that initiated such registration shall
not reduce the number of registrations available to the Initiating Stockholder
pursuant to paragraph (A) or (B), as the case may be, of Section 2(a)(i).
(b) Incidental Registration.
(i) Right to Include Registrable Securities. If the Company at any time
proposes to register any Common Shares under the Securities Act, whether for its
own account or the account of a third party (other than by a registration (A) on
Form S-4 or S-8 or any successor or similar
6
forms, (B) relating to Common Shares issuable upon exercise of employee stock
options or in connection with any employee benefit plan or (C) in connection
with any direct or indirect exchange offer, amalgamation, merger, acquisition or
similar transaction whether or not for sale for its own account), the Company
will at each such time give prompt written notice to the Stockholders of its
intention to do so and of such holders' rights under this Section 2(b). Upon the
written request of any such holder of Registrable Securities made within 10 days
after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder and the
intended method of disposition thereof), the Company will, subject to the
provisions of paragraph (iii) of this Section 2(b), use its reasonable efforts
to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the holders
thereof, to the extent requisite to permit the disposition (in accordance with
the intended methods thereof as aforesaid) of the Registrable Securities so to
be registered; provided that (i) if such registration involves an underwritten
offering, all such holders of Registrable Securities requesting to be included
in such registration must enter into the underwriting agreement as contemplated
by Section 2(d) hereof and (ii) if, at any time after giving written notice of
its intention to register any securities pursuant to this Section 2(b) and prior
to the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to register or
to delay registration of such securities, the Company may, at its election, give
written notice of such determination to all such shareholders and, thereupon,
(A) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration and (B) in the case of a determination to delay registering, shall
be permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities.
(ii) Expenses. The Company shall pay all Registration Expenses in
connection with any registration requested pursuant to this Section 2(b).
(iii) Priority in Incidental Registrations. If a registration pursuant to
this Section 2(b) involves an underwritten offering (other than in the case of a
registration under Section 2(a)), and the managing underwriter shall advise the
Company in writing, that, in its opinion, the number of securities requested and
otherwise proposed to be included in such registration exceeds the Maximum
Offering Size, the Company will include in such registration, in the following
priority, up to the Maximum Offering Size, (1) first, the securities proposed to
be issued by the
7
Company, (2) second, all Common Shares proposed to be registered for the
account of the Stockholders and requested to be included in such
registration, pro rata in accordance with the number of Common Shares
proposed to be registered by such Stockholders and (3) third, all Common
Shares proposed to be registered for the account of other Persons, if any,
having registration rights granted after the date hereof and requested to
be included in such registration (whether or not such request arises from a
demand registration right granted to such person), pro rata in accordance
with the number of Common Shares proposed to be registered by such other
Persons, or otherwise allocated among such Persons in such proportion as
such Persons and the Company shall agree. Notwithstanding the foregoing,
after the 18 month anniversary of the Closing Date, the Persons referred to
in clauses (2) and (3) shall include Common Shares in any registration
pursuant to this Section 2(b) pro rata in accordance with the number of
Common Shares requested to be included in such registration by all such
Persons; provided that if, after such 18 month anniversary, a request
pursuant to this Section 2(b) occurs in respect of an underwritten offering
made at the request of any other Person pursuant to registration rights
granted to such Person after the date hereof in connection with the
issuance by the Company of securities, and the managing underwriter has
advised the Company in writing, that, in its opinion, the number of
securities requested and otherwise proposed to be included in such
registration exceeds the Maximum Offering Size, the Company will include in
such registration, in the following priority, up to the Maximum Offering
Size, (1) first, the securities proposed to be registered by such Person
and (2) second, all Common Shares proposed to be registered for the account
of other Persons (including the Stockholders), if any, requested to be
included in such registration pro rata in accordance with the numbers of
other securities proposed to be registered by the other Persons or
otherwise allocated among such other Persons in such proportion as such
holders and the Company shall agree.
(c) Registration Procedures. If and whenever the Company is required to
use its reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Section 2(a) or Section 2(b)
the Company will as expeditiously as practicable:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use its
commercially reasonable efforts to cause such registration statement to
become effective; provided that the Company may postpone the filing or
effectiveness of a registration for a reasonable period not to exceed 90
days from the date of the request, if the Board reasonably believes that
8
such registration might reasonably be expected to have an adverse effect on
any proposal or plan to engage in any acquisition of assets or capital
stock or any amalgamation, merger, consolidation, tender offer or similar
transaction; or would otherwise require disclosure of information which the
Board in its reasonable judgement determines should not be disclosed;
provided further that no more than one postponement under this clause (i)
or termination under clause (ii) below may be imposed in any twelve month
period.
(ii) 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 continuously effective for a period of either (A) 180 days
(without including in such period the number of days in any Delay Period
(as hereinafter defined)) or (B) such shorter period as will terminate when
all of the securities covered by such registration statement have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement (but in
any event not before the expiration of any longer period required under the
Securities Act), and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement; provided that the Company may terminate the
effectiveness of a registration if the Board reasonably believes that such
registration would reasonably be expected to have an adverse effect on any
proposal or plan to engage in any acquisition of assets or capital stock or
any amalgamation, merger, consolidation, tender offer or similar
transaction or would otherwise require disclosure of information which the
Board determines in its reasonable judgement should not be disclosed;
(iii) furnish to each Requesting Holder such number of conformed
copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits, but only one copy
thereof to each such Requesting Holder), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents in order to
facilitate the disposition of the Registrable Securities owned by such
Requesting Holder, as such Requesting Holder may reasonably request;
(iv) use its commercially reasonable efforts to register or qualify
such Registrable Securities and other securities covered by such
9
registration statement under such other securities or blue sky laws of such
jurisdictions as each seller thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and to take any other action which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller;
provided that the Company shall not for any such purpose be required to (A)
qualify generally to do business as a foreign corporation in any
jurisdiction where it would not otherwise be required to qualify but for
the requirements of this clause (iv), (B) consent to general service of
process in any such jurisdiction or (C) subject itself to taxation in such
jurisdiction;
(v) use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) promptly notify each seller of Registrable Securities, at any
time when 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 prospectus included in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and at the request
of any such seller promptly prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(vii) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of at least twelve months, but not
more than eighteen months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
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statement shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(viii) use its commercially reasonable efforts to cause all such
Registrable Securities covered by such registration statement to be listed
on any national securities exchange (if such Registrable Securities are not
already so listed), and on each other securities exchange, on which similar
securities issued by the Company are then listed, if the listing of such
Registrable Securities is then permitted under the rules of such exchange.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish promptly to the Company such
information regarding such seller and such seller's Registrable Securities as
the Company may from time to time reasonably request and such other information
as may be legally required in connection with such registration.
Each holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (vi) of this Section 2(c), such holder will forthwith discontinue such
holder's disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by clause (vi)
of this Section 2(c) (a "Delay Period") and, if so directed by the Company, such
holder will deliver to the Company all copies, other than permanent file copies
then in such holder's possession, of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
(d) Underwritten Offerings. The DLJ Entities will have the right, in
their sole discretion, to select an underwriter or underwriters in connection
with any underwritten offering resulting from the exercise by any DLJ Entity of
a demand for registration under Section 2(a), in which offering the Registrable
Securities to be registered by the DLJ Entities pursuant to Section 2(a)
constitute more than 50% of all Registrable Securities to be registered pursuant
to Section 2(a). Such underwriter or underwriters may include any Affiliate of
any DLJ Entity. The Board shall select, in its sole discretion, the underwriter
or underwriters in connection with any other underwritten offering; provided
that, in any underwritten offering in which Marsh is the Initiating Stockholder,
the lead underwriters of such offering shall be reasonably acceptable to Marsh
and; provided further that, in any underwritten offering in which at least 30%
of the securities to be sold are owned by the DLJ Entities, the DLJ Entities
shall have the right to designate one co-lead underwriter in connection with
such offering (which will not, unless the Company consents, be the book-runner).
Such underwriter may include any Affiliate of any DLJ Entity. The underwriting
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agreement shall be reasonably satisfactory in substance and form to the
Board and shall contain such representations and warranties by the Company
and by the selling stockholders and such other terms as are generally
prevailing in agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2(f). No
Person may participate in any underwritten registration hereunder unless
such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements reasonably approved by the Board
that are consistent with the provisions of this Agreement and (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 the provisions of this
Agreement.
(e) Holdback Agreements. Each holder of Registrable Securities agrees
for the benefit of the Company, so long as the Company and its controlling
stockholders agree to be similarly bound, not to effect any sale or
distribution of any equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 under the Securities Act (or any
similar provision then in force), during the 30 day period before the
effective date of such registration statement (except as part of such
registration statement) or during the period after such effective date that
such managing underwriter or the Board, in their reasonable judgement,
shall agree (but not to exceed 180 days); provided that the transferees in
any sale not prohibited hereunder (other than as part of such underwritten
public offering) shall agree to be bound by the terms of this Section 2(e).
(f) Indemnification.
(i) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act
pursuant to this Section 2, the Company will, and hereby does,
indemnify and hold harmless, the seller of any Registrable Securities
covered by such registration statement, its directors, officers,
agents and employees, each other Person who participates as an
underwriter in the offering or sale of such securities and each other
Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such seller or any
such director, officer, agent, employee, 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 (A) any untrue statement or alleged
untrue statement of any material fact contained (x) in any
registration statement under which such
12
securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein
or used in connection with the offering of securities covered thereby,
or any amendment or supplement thereto or any document included by
reference therein, or (y) in any application or other document or
communication (in this Section 2(f) collectively called an
"application") executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify any securities covered by such
registration statement under the "blue sky" or securities laws
thereof, or (B) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such
seller and each such director, officer, agent, employee, underwriter
and controlling person for any legal or any other expenses incurred by
them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided that the Company
shall 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 preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, or in any
application, in reliance upon and in conformity with written
information prepared and furnished to the Company by such seller
specifically for use in the preparation thereof which information
contained any untrue statement of any material fact or omitted to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and provided
further that the Company shall not be liable to any Person who
participates as an underwriter in any such registration or any other
Person who controls such underwriter within the meaning of the
Securities Act, 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 such Person's failure to send or give a copy
of the final prospectus, as the same may be then supplemented or
amended (provided it has been made available to such Person in
accordance with the terms hereof), to the Person asserting an untrue
statement or alleged untrue statement or omission or alleged omission
at or prior to the written confirmation of the sale of the securities
to such Person if such statement or omission was corrected in such
final prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or
any such director, officer, agent, employee, underwriter or
controlling Person and shall survive the transfer of such securities
by such seller. The Company shall not be obligated to pay the fees and
expenses of more than one
13
counsel or firm of counsel for all parties indemnified in respect of a
claim for each jurisdiction in which such counsel is required unless
in the reasonable judgment of counsel for the indemnified party a
conflict of interest may exist between such indemnified party and any
other indemnified party in respect of such claim.
(ii) Indemnification by the Sellers. The Company may require, as
a condition to including any Registrable Securities in any
registration statement filed pursuant to this Section 2, that the
Company shall have received an undertaking satisfactory to it from the
prospective seller of such Registrable Securities, to indemnify and
hold harmless (in the same manner and to the same extent as set forth
in Section 2(f)(i)) the Company, each director of the Company, each
officer of the Company and each other Person, if any, who controls the
Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment
or supplement thereto, or any application, if such statement or
alleged statement or omission or alleged omission was made in reliance
upon and in conformity with written information prepared and furnished
to the Company by such seller, as to such seller, specifically for use
in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or
supplement, or such application, which information contained any
untrue statement of any material fact or omitted to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling Person and
shall survive the transfer of such securities by such seller. The
indemnity provided by each seller of securities under this Section
2(f)(ii) shall be provided severally, and not jointly or jointly and
severally with any other seller or prospective seller of securities,
and shall be limited in amount to the net amount of proceeds received
by such seller from the sale of Registrable Securities pursuant to
such registration statement.
(iii) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subdivisions
of this Section 2(f), such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action;
provided that the failure of any indemnified party to give notice as
provided herein shall not relieve the
14
indemnifying party of its obligations under the preceding subdivisions
of this Section 2(f), except to the extent that the indemnifying party
is materially prejudiced by such failure to give notice. In case any
such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party shall be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying
party similarly notified to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party. No indemnifying
party shall, without the consent of the indemnified party, consent to
entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect to such claim or litigation.
(iv) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this Section 2(f) (with
appropriate and reasonable modifications) shall be given by the
Company and each seller of Registrable Securities with respect to any
required registration or other qualification of securities under any
federal, state or provincial law or regulation of any governmental
authority, other than the Securities Act.
(v) Indemnification Payments. The indemnification required by
this Section 2(f) shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred,
subject to refund if the party receiving such payments is subsequently
found not to have been entitled thereto hereunder.
(vi) Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnity contemplated
by this Section 2(f) is for any reason not available, the parties
required to indemnify by the terms hereof shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by such indemnity agreement incurred by the
Company, any seller of Registrable Securities and one or more of the
underwriters, except to the extent that contribution is not permitted
under Section 11(f) of the Securities Act. In determining the amounts
which the respective parties shall contribute, there shall be
considered the relative benefits received by each party from the
offering of the Registrable Securities (taking into account the
portion of the proceeds of the offering realized by each), the
parties' relative knowledge and access to information concerning the
15
matter with respect to which the claim was asserted, the opportunity
to correct and prevent any statement or omission and any other
equitable considerations appropriate under the circumstances. The
Company and each Person selling securities agree with each other that
no seller of Registrable Securities shall be required to contribute
any amount in excess of the amount such seller would have been
required to pay to an indemnified party if the indemnities under
clauses (i) and (ii) above of this Section 2(f) were available. The
Company and each such seller agree with each other and the
underwriters of the Registrable Securities, if requested by such
underwriters, that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation
(even if the underwriters were treated as one entity for such purpose)
or for the underwriters' portion of such contribution to exceed the
percentage that the underwriting discount bears to the initial public
offering price of the Registrable Securities. For purposes of this
clause (vi), each Person, if any, who controls an underwriter within
the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as such underwriter, and each director and each
officer of the Company who signed the registration statement, and each
Person, if any, who controls the Company or a seller of Registrable
Securities within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company or a seller
of Registrable Securities, as the case may be.
SECTION 3. Other Registration Rights. Notwithstanding anything to the
contrary in this Agreement, the Company shall be permitted to grant to any
Person the right to request that the Company to register any equity securities
of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, without the consent of holders of any
Registrable Securities, so long as no such registration rights conflict with or
are senior to, or would result in a delay in exercise or consummation of, the
rights granted pursuant to Section 2(a) or Section 2(b) hereunder (other than in
the manner contemplated by the final sentence of Section 2(b)(iii)).
SECTION 4. Markel Guarantee. Markel hereby guarantees the performance
by the Company of all of its obligations under this Agreement and agrees to
cause the Company to execute a counterpart of this Agreement upon its
organization.
SECTION 5. Amendments and Waivers. This Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act of the holders
of
16
at least a majority of all Registrable Securities held by the DLJ
Entities, on the one hand, and by Marsh, on the other hand.
SECTION 6. Notices. All communications provided for hereunder
shall be in writing and shall be delivered personally or by facsimile
or sent by first-class mail and addressed to Marsh and Byrne at the
address that each, respectively, shall have furnished to the Company
in writing, and
if to the Company to:
Virginia Holdings Inc.
c/o Markel Corporation
451 Cox Road
Glen Allen, Virginia 23059
Attention: Steven A. Markel
Facsimile: (804) 527-3810
and with a copy to:
McGuire, Woods, Battle & Boothe LLP
One James Center
Richmond, Virginia 23219
Attention: Leslie A. Grandis
Facsimile: (804) 775-1061
and if to any DLJ Entity to:
DLJ Merchant Banking
277 Park Avenue
New York, New York 10172
Attention: David L. Jaffe
and with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: George R. Bason, Jr.
Facsimile: (212) 450-4800
SECTION 7. Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns; provided that the
rights accorded the DLJ
17
Entities herein shall not inure to the benefit of any transferee or
subsequent holder of any Registrable Securities, except to a Permitted
Transferee acquiring Registrable Securities who has executed and
delivered to the Company an agreement to be bound by this Agreement.
Any such Permitted Transferee shall thereafter have all the rights
accorded to the DLJ Entities hereunder. Notwithstanding the foregoing,
(i) no Permitted Transferee obtaining its Registrable Securities as a
result of a distribution in kind to all or substantially all of the
limited partners of any DLJ Entity shall be entitled to the benefits
of this Agreement (ii) no DLJ Partner or DLJ Associate may be an
Initiating Stockholder, and (iii) all notices to any Permitted
Transferee shall be deemed to have been satisfactorily given for
purposes of this Agreement if given to DLJ Merchant Banking, Inc. at
277 Park Avenue, New York, New York 10172; Attention: David L. Jaffe;
Facsimile No: 212-892-7552, which shall have sole responsibility for
giving notice to such Permitted Transferees and coordinating the
participation by such Permitted Transferees in any registration of
Registrable Securities pursuant hereto.
SECTION 8. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for
reference only and shall not limit or otherwise affect the meaning
hereof.
SECTION 9. Specific Performance. The parties hereto recognize and
agree that money damages may be insufficient to compensate the holders
of any Registrable Securities for breaches by the Company of the terms
hereof and, consequently, that the equitable remedy of specific
performance of the terms hereof will be available in the event of any
such breach.
SECTION 10. Effectiveness. This Agreement shall be effective as
of the Closing Date (as defined in the Merger Agreement) and the TNA
Registration Rights Agreement shall automatically terminate as of such
date.
SECTION 11. Termination. This Agreement shall automatically
terminate on the earlier of: (i) the date that is five years from the
Closing Date (as defined in the Merger Agreement) or (ii), if the
Closing Date does not occur, the termination of the Merger Agreement.
SECTION 12. Governing Law. All questions concerning the
construction, validity and interpretation of this agreement will be
construed and enforced in accordance with, and the rights of the
parties shall be governed by, the internal laws, and not the law of
conflicts, of the State of New York.
SECTION 13. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be
deemed an
18
original, but all such counterparts shall together constitute one and
the same instrument.
SECTION 14. Entire Agreement. This Agreement, together with the
Merger Agreement, is intended by the parties hereto as a final
expression of their agreement and intended to be a complete and
exclusive statement of their agreement and understanding in respect to
the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect
to such subject matter.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
MARKEL CORPORATION
By: /s/ Steven A. Markel
-------------------------------
Name: Steven A. Markel
Title: Vice Chairman
VIRGINIA HOLDINGS INC.
By:
-------------------------------
Name:
Title:
20
DLJ INTERNATIONAL PARTNERS, C.V.
By: DLJ MERCHANT BANKING, INC.
Advisory General Partner
By: /s/ David Jaffe
------------------------------
Name: David Jaffe
Title: Managing Director
DLJ OFFSHORE PARTNERS, C.V.
By: DLJ MERCHANT BANKING, INC.
Advisory General Partner
By: /s/ David Jaffe
------------------------------
Name: David Jaffe
Title: Managing Director
DUMB OVERSEAS PARTNERS, C.V.
By: DLJ MERCHANT BANKING, INC.
Advisory General Partner
By: /s/ David Jaffe
------------------------------
Name: David Jaffe
Title: Managing Director
21
DLJ MERCHANT BANKING
FUNDING, INC.
By: /s/ Ivy Dodes
-------------------------------
Name: Ivy Dodes
Title: Vice President
DLJ FIRST ESC, L.P.
By: DLJ LBO PLANS MANAGEMENT
CORPORATION, its General Partner
By: /s/ Ivy Dodes
-------------------------------
Name: Ivy Dodes
Title: Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By; /s/ Ivy Dodes
-------------------------------
Name: Ivy Dodes
Title: Vice President
MARSH & MCLENNAN CAPITAL, INC. on
behalf of itself, MARSH &
MCLENNAN RISK CAPITAL HOLDINGS,
LTD., other related MARSH & MCLENNAN
CAPITAL. INC. entities and RISK
CAPITAL REINSURANCE COMPANY
By: /s/ Philip Petronis
--------------------------------
Name: Philip Petronis
Title:
23
JOHN J. BYRNE, on his own behalf
and on behalf of certain entities
as to which, with respect to Common
Shares held by such entities, he
has voting and dispositive power
/s/ John J. Byrne
----------------------------------
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