Securities Purchase Agreement (2006)Full Document 

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                          SECURITIES PURCHASE AGREEMENT

                                  BY AND AMONG

                           SCOTTISH RE GROUP LIMITED,

                        MASSMUTUAL CAPITAL PARTNERS LLC,

                                       AND

                              SRGL ACQUISITION, LLC

                          DATED AS OF NOVEMBER 26, 2006


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                                TABLE OF CONTENTS



                                    ARTICLE I

DEFINITIONS...................................................................2

         SECTION 1.1.   Definitions...........................................2

                          ARTICLE II

ISSUANCE AND PURCHASE OF CONVERTIBLE SHARES...................................9

         SECTION 2.1.   Special Meeting.......................................9
         SECTION 2.2.   Closing..............................................11
         SECTION 2.3.   Purchase of Convertible Shares.......................11
         SECTION 2.4.   Deliveries...........................................11
         SECTION 2.5.   Restricted Stock, Restricted Stock Units
                        and Stock Options....................................11

                          ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SRGL.......................................12

         SECTION 3.1.   Organization, Standing and Corporate Power...........12
         SECTION 3.2.   Ordinary Capital Structure; Issuance of Shares.......12
         SECTION 3.3.   Subsidiaries.........................................14
         SECTION 3.4.   Authority............................................14
         SECTION 3.5.   Noncontravention; Consents...........................14
         SECTION 3.6.   SEC Reports; Financial Statements....................15
         SECTION 3.7.   No Undisclosed Liabilities...........................16
         SECTION 3.8.   Absence of Certain Changes or Events.................17
         SECTION 3.9.   Benefit Plans........................................17
         SECTION 3.10.  Taxes................................................19
         SECTION 3.11.  Compliance with Applicable Laws......................20
         SECTION 3.12.  Litigation...........................................22
         SECTION 3.13.  Reserves.............................................22
         SECTION 3.14.  Contracts............................................22
         SECTION 3.15.  Insurance............................................25
         SECTION 3.16.  Intellectual Property................................25
         SECTION 3.17.  Insurance Regulatory Matters.........................26
         SECTION 3.18.  Brokers..............................................26
         SECTION 3.19.  Board and Member Approval............................27
         SECTION 3.20.  Takeover Statute.....................................27
         SECTION 3.21.  Information..........................................27
         SECTION 3.22.  Properties; Absence of Liens.........................28
         SECTION 3.23.  Affiliate Transactions...............................28
         SECTION 3.24.  Opinions of Financial Advisors.......................28

                                      -i-


         SECTION 3.25.  Broker-Dealer Subsidiaries...........................28
         SECTION 3.26.  Private Placement....................................29
         SECTION 3.27.  Acknowledgment Regarding Investors' Purchase
                        of SRGL Securities...................................29
         SECTION 3.28.  Convertible Shares Certificate of Designations.......30
         SECTION 3.29.  Manipulation of Price................................30

                          ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF INVESTORS..................................30

         SECTION 4.1.   Organization, Standing and Corporate Power...........30
         SECTION 4.2.   Authority............................................31
         SECTION 4.3.   Noncontravention; Consents...........................31
         SECTION 4.4.   Litigation...........................................32
         SECTION 4.5.   Brokers..............................................32
         SECTION 4.6.   Available Funds......................................32
         SECTION 4.7.   Information..........................................33
         SECTION 4.8.   No Public Sale or Distribution.......................33
         SECTION 4.9.   Accredited Investor Status...........................33
         SECTION 4.10.  Restricted Securities................................33
         SECTION 4.11.  Access to Data and Management........................33
         SECTION 4.12.  Tax Matters..........................................33

                          ARTICLE V

COVENANTS RELATING TO CONDUCT OF BUSINESS....................................34

         SECTION 5.1.   Conduct of Business of SRGL..........................34
         SECTION 5.2.   Acquisition Proposals................................37

                          ARTICLE VI

OTHER AGREEMENTS.............................................................41

         SECTION 6.1.   Access to Information; Confidentiality...............41
         SECTION 6.2.   Consents, Approvals and Filings......................42
         SECTION 6.3.   Public Announcements.................................43
         SECTION 6.4.   Further Assurances...................................43
         SECTION 6.5.   Notification of Certain Matters......................43
         SECTION 6.6.   Anti-Takeover Laws...................................43
         SECTION 6.7.   Shareholder Litigation...............................43
         SECTION 6.8.   Availability of Ordinary Shares for Conversion.......44
         SECTION 6.9.   Restrictive Legend...................................44
         SECTION 6.10.  Listing Matters......................................44
         SECTION 6.11.  Pledge...............................................45
         SECTION 6.12.  Register; Transfer Agent Instructions................45

                                      -ii-


         SECTION 6.13.  Director and Officer Liability.......................46
         SECTION 6.14.  Employee Matters.....................................47
         SECTION 6.15.  Tax Cooperation......................................48

                          ARTICLE VII

CONDITIONS PRECEDENT.........................................................49

         SECTION 7.1.   Conditions to Each Party's Obligations...............49
         SECTION 7.2.   Conditions to Obligations of Investors...............49
         SECTION 7.3.   Conditions to Obligations of SRGL....................52

                          ARTICLE VIII

TERMINATION PRIOR TO CLOSING.................................................53

         SECTION 8.1.   Termination of Agreement.............................53
         SECTION 8.2.   Procedure Upon Termination and Consequences..........54
         SECTION 8.3.   Fees and Expenses....................................55

                          ARTICLE IX

INDEMNIFICATION..............................................................56

         SECTION 9.1.   Survival.............................................56
         SECTION 9.2.   Indemnification by SRGL..............................56
         SECTION 9.3.   Indemnification by Investors.........................57
         SECTION 9.4.   Certain Limitations on Indemnification...............57
         SECTION 9.5.   Third Party Claim Procedures.........................59
         SECTION 9.6.   Independent Committee................................60

                          ARTICLE X

GENERAL PROVISIONS...........................................................60

         SECTION 10.1.  Fees and Expenses....................................60
         SECTION 10.2.  Notices..............................................60
         SECTION 10.3.  Interpretation.......................................62
         SECTION 10.4.  Entire Agreement; No Third Party Beneficiaries;
                        No Other Representations.............................62
         SECTION 10.5.  Governing Law........................................63
         SECTION 10.6.  Assignment...........................................63
         SECTION 10.7.  Amendments...........................................64
         SECTION 10.8.  Enforcement..........................................64
         SECTION 10.9.  Severability.........................................64

                                     -iii-


         SECTION 10.10. Counterparts.........................................64
         SECTION 10.11. Independent Nature of Investors'
                        Obligations and Rights...............................65
         SECTION 10.12. Waiver of Jury Trial.................................65


EXHIBIT A   FORM OF CONVERTIBLE SHARES CERTIFICATE OF DESIGNATIONS
EXHIBIT B   FORM OF REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT
EXHIBIT C   FORM OF LEGAL OPINION
EXHIBIT D   FORM OF IRREVOCBALE TRANSFER AGENT INSTRUCTIONS
EXHIBIT E   FORM OF CERBERUS EQUITY COMMITMENT LETTER
EXHIBIT F   FORM OF MASSMUTUAL EQUITY COMMITMENT LETTER
ANNEX I     FORM OF VOTING AGREEMENT


                                      -iv-



     SECURITIES PURCHASE AGREEMENT, dated as of November 26, 2006 (this
"Agreement"), by and among Scottish Re Group Limited, an exempted company
limited by shares organized and existing under the laws of the Cayman Islands
("SRGL"), MassMutual Capital Partners LLC, a Delaware limited liability company
("MassMutual"), SRGL Acquisition, LLC, a Delaware limited liability company
("Cerberus" and together with MassMutual, "Investors").

     WHEREAS, SRGL and Investors are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the United States Securities Act of 1933, as amended (the "Securities
Act"), and Rule 506 of Regulation D ("Regulation D") as promulgated by the
United States Securities and Exchange Commission (the "SEC") under the
Securities Act;

     WHEREAS, the Board of Directors of SRGL has approved, subject to the SRGL
Member Approval, the authorization and issuance of 1,000,000 convertible
cumulative participating preferred shares of SRGL, par value $.01 per share and
liquidation preference of $600 per share (the "Convertible Shares"), which
Convertible Shares shall be convertible into ordinary shares of SRGL, par value
$.01 per share (the "Ordinary Shares"), and which Convertible Shares shall have
such voting powers, preferences and other special rights and the qualifications,
limitations or restrictions as set forth in the Certificate of Designations of
the Convertible Cumulative Participating Preferred Shares, which shall be in the
form attached hereto as Exhibit A (the "Convertible Shares Certificate of
Designations");

     WHEREAS, MassMutual wishes to purchase, and SRGL wishes to sell, upon the
terms and conditions stated in this Agreement, 500,000 Convertible Shares for an
aggregate consideration of $300,000,000 (the "MassMutual Consideration");

     WHEREAS, Cerberus wishes to purchase, and SRGL wishes to sell, upon the
terms and conditions stated in this Agreement, 500,000 Convertible Shares for an
aggregate consideration of $300,000,000 (the "Cerberus Consideration");

     WHEREAS, subsequent to the execution and delivery of this Agreement, the
parties hereto shall execute and deliver a Registration Rights and Shareholders
Agreement, in the form attached hereto as Exhibit B (the "Registration Rights
and Shareholders Agreement"), pursuant to which SRGL will agree to provide
certain (i) registration rights under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities Laws with
respect to the Ordinary Shares into which Convertible Shares may be converted,
and (ii) other rights powers, preferences and privileges to the holders of the
Convertible Shares;

     WHEREAS, concurrently with the execution of this Agreement, and as a
condition and inducement to the Investors' willingness to enter into this
Agreement, the Investors, SRGL and certain Members are entering into a voting
agreement and irrevocable proxy and waiver, dated as of the date hereof, in the
form attached hereto as Annex I (the "Voting Agreement" and together with this
Agreement, the Convertible Shares Certificate of Designations and the
Registration Rights and Shareholders Agreement, the "Transaction Documents"),
pursuant to which such Members have agreed, among other things, to vote all




Ordinary Shares held by them in favor of the approval of the transactions
contemplated by the Transaction Documents and to waive certain preemptive rights
in connection therewith;


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