Exhibit 4.12
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SECURITIES PURCHASE AGREEMENT
between
[INVESTOR]
and
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
_____________, 1998
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TABLE OF CONTENTS
Page
SECTION 1. AUTHORIZATION OF SECURITIES............................................... 1
SECTION 2. PURCHASE AND SALE OF SECURITIES........................................... 1
2.1. Issuance of Securities..................................................... 1
2.2. Closing of Issuance........................................................ 1
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................. 1
3.1. Corporate Organization..................................................... 1
3.2. Subsidiaries............................................................... 2
3.3. Authorization.............................................................. 2
3.4. Capitalization............................................................. 2
3.5. Proceedings................................................................ 3
3.6. Consents................................................................... 3
3.7. Financial Statements....................................................... 3
3.8. Compliance with Law........................................................ 3
3.9. Certain Events............................................................. 3
3.10. Payments by Subsidiary.................................................... 4
3.11. Accounting................................................................ 4
3.12. No Violations............................................................. 4
3.13. Share Certificates........................................................ 4
3.14. Exchange Controls......................................................... 5
3.15. Certain Insurance Regulations............................................. 5
3.16. Stamp Tax................................................................. 5
3.17. Securities Laws........................................................... 5
3.18. Disclosure................................................................ 6
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR............................ 6
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES....................................... 7
5.1. Resale of Securities....................................................... 7
5.2. Covenants Pending Closing.................................................. 7
5.3. Further Assurance.......................................................... 8
SECTION 6. INVESTOR'S CLOSING CONDITIONS............................................. 8
6.1. Representations and Warranties............................................. 8
6.2. Compliance with Agreement.................................................. 8
6.3. Secretary's Certificate.................................................... 8
6.4. Delivery of Shares and Warrants............................................ 8
6.5. Injunction................................................................. 8
6.6. Consummation of Public Offering............................................ 8
6.7. Registration Rights Agreement.............................................. 8
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...................................................................................
SECTION 7. COMPANY CLOSING CONDITIONS................................................ 8
7.1. Representations and Warranties............................................. 9
7.2. Compliance with Agreement.................................................. 9
7.3. Injunction................................................................. 9
7.4. Payment of Purchase Price.................................................. 9
7.5. Consummation of Public Offering............................................ 9
SECTION 8. LIMITATION ON DISPOSITION................................................. 9
SECTION 9. COVENANTS................................................................. 9
9.1. Inspection................................................................. 9
9.2. Keeping of Books...........................................................10
9.3. Lost, etc. Certificates Evidencing Shares (or Ordinary Shares); Exchange...10
9.4. Confidential Information...................................................10
SECTION 10. INTERPRETATION OF THIS AGREEMENT.........................................10
10.1. Terms Defined.............................................................10
10.2. Directly or Indirectly....................................................11
10.3. Section Headings..........................................................12
SECTION 11. MISCELLANEOUS............................................................12
11.1. Notices...................................................................12
11.2. Expenses and Taxes........................................................12
11.3. Reproduction of Documents.................................................12
11.4. Termination and Survival..................................................13
11.5. Successors and Assigns....................................................13
11.6. Entire Agreement; Amendment and Waiver....................................13
11.7. Severability..............................................................13
11.8. Governing Law; Submission to Jurisdiction.................................13
11.9. Counterparts..............................................................14
EXHIBIT A Form of Class A Warrants
EXHIBIT B Form of Registration Rights Agreement
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is entered into as of
this 22nd day of October, 1998, by and between Scottish Annuity & Life Holdings,
Ltd., a Cayman Islands company (the "Company"), and ______________, a
____________ (the "Investor").
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and of other good and valuable consideration, the parties hereto hereby agree as
follows:
SECTION 1. AUTHORIZATION OF SECURITIES
The Company has duly authorized the issuance, sale and delivery of its
ordinary shares, par value $.01 per share (the "Ordinary Shares") and its Class
A Warrants to purchase its Ordinary Shares, the form of which is attached hereto
as Exhibit A (the "Class A Warrants"), as set forth herein.
SECTION 2. PURCHASE AND SALE OF SECURITIES
2.1. Issuance of Securities. Subject to the terms and conditions set
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forth in this Agreement and in reliance upon the Company's and the Investor's
representations set forth below, on the Closing Date (as defined below) the
Company shall sell to the Investor, and the Investor shall purchase from the
Company, _______ Ordinary Shares (the "Shares") and Class A Warrants (the
"Warrants") to purchase _______ Ordinary Shares, at an aggregate cash purchase
price equal to the product of (i) _______ and (ii) the price per Ordinary Share
to the public of the Ordinary Shares offered and sold by the Company in the
Public Offering, less the per share underwriting discount (the "Purchase
Price"). Such sale and purchase shall be effected on the Closing Date by the
Company executing and delivering to the Investor, duly registered in its name
(or that of its nominee), one or more duly executed stock certificates and
warrant certificates evidencing the Shares and Warrants being purchased by it,
against delivery by the Investor to the Company of the Purchase Price by wire
transfer of immediately available funds to such account as the Company shall
designate, not less than three Business Days prior to the Closing Date.
2.2. Closing of Issuance. The closing of such sale and purchase (the
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"Closing") shall take place at 10:00 A.M., New York City time, on the IPO
Closing Date or such other date as the Investor and the Company agree in writing
(the "Closing Date"), at the offices of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, 32nd Floor,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location as the
Investor and the Company shall mutually select.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that:
3.1. Corporate Organization. Each of the Company and Scottish Annuity &
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Life Insurance Company (Cayman), Ltd., a Cayman Islands, British West Indies
company (the "Subsidiary"), has been duly organized and is validly existing as a
company in good standing under the laws of the Cayman Islands, British West
Indies and is duly qualified to transact business as a foreign corporation and
is in good standing under the laws of all other jurisdictions
where the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified does
not amount to a material liability or disability to the Company and its
Subsidiary, taken as a whole.
3.2. Subsidiaries. The Company has no subsidiary other than the
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Subsidiary. The issued shares of capital stock of the Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
beneficially by the Company free and clear of any security interests, liens,
encumbrances, equities or claims.
3.3. Authorization. The Company has all requisite corporate power and
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authority to execute and deliver the Transaction Documents, and to carry out its
obligations thereunder. The execution and delivery of the Transaction Documents
and the performance by the Company of its obligations thereunder have been duly
authorized by the Company, and no other corporate proceeding therefor on the
part of the Company or its stockholders is required. The Transaction Documents
have been duly executed and delivered by the Company and are the valid and
binding obligations of the Company, enforceable against it in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to the enforcement of creditors' rights and remedies or other equitable
principles of general application. Each of the Company and its Subsidiary has
full corporate power to own or lease its properties and to conduct its business
as described in the draft S-1 Registration Statement of the Company dated the
date hereof (the "Information Materials").
3.4. Capitalization.
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(a) The capital stock of the Company conforms to the description
thereof contained in the Information Material.
(b) All the outstanding shares of capital stock of the Company
have been duly and validly issued and are fully paid and non-assessable, and
were issued in accordance with the registration or qualification requirements of
the Securities Act and any other relevant securities laws or pursuant to valid
exemptions therefrom. The Company has authorized (or as of the Closing Date will
have authorized) the issuance, sale and delivery of the Shares and Warrants in
accordance with this Agreement, and subject to the issuance of the Warrants, the
Company has reserved (or as of the Closing Date will have reserved) for issuance
Ordinary Shares initially issuable upon conversion of the Warrants. Upon
issuance, sale and delivery as contemplated by this Agreement, the Shares will
be duly authorized, validly issued, fully paid and non-assessable Ordinary
Shares of the Company, free of all preemptive or similar rights, and entitled to
the rights described in the Organizational Documents. Upon their issuance in
accordance with the terms of the Warrants, the Ordinary Shares issuable upon
exercise of the Warrants will be duly authorized, validly issued, fully paid and
non-assessable Ordinary Shares of the Company, free of all preemptive or similar
rights, and entitled to the rights described in the Organizational Documents.
(c) Except as disclosed in the Information Materials, there are
no outstanding (A) securities or obligations of the Company or its Subsidiary
convertible into or exchangeable for any shares or capital stock of the Company
or its Subsidiary, (B) warrants, rights or options to
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subscribe for or purchase from the Company or its Subsidiary any such shares or
capital stock or any such convertible or exchangeable securities or obligations,
or (C) obligations of the Company or its Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options.
3.5. Proceedings. Except as set forth in the Information Materials,
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there are no legal or governmental proceedings pending to which the Company or
its Subsidiary is a party or to which the property of the Company or its
Subsidiary is subject, and no such proceedings have been threatened against the
Company or its Subsidiary or with respect to any of their respective properties;
and except as set forth in the Information Materials, neither the Company nor
the Subsidiary is party to any material contract or other document.
3.6. Consents. The issuance, offering and sale of the Shares and the
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Warrants to the Investor by the Company pursuant to this Agreement and the
issuance of Ordinary Shares issuable upon the exercise of the Warrants and the
compliance by the Company with the other provisions of this Agreement and the
Warrants and the consummation of the other transactions herein and therein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority other than
notification to the Cayman Islands Monetary Authority, or (ii) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or its Subsidiary is a party
or by which the Company or its Subsidiary or any of their respective properties
are bound, or the Memorandum of Association or Articles of Association of the
Company or its Subsidiary, or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any arbitrator
applicable to the Company or its Subsidiary.
3.7. Financial Statements. The consolidated balance sheet of the Company
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and its Subsidiary included in the Information Materials fairly present the
financial position of the Company and its Subsidiary as of the date therein
specified. Such balance sheet has been prepared in accordance with United
States generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein).
3.8. Compliance with Law. The Company and the Subsidiary have all
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licenses, permits (other than certain employee work permits), franchises or
other governmental authorizations necessary to the ownership of their property
or to the conduct of their respective businesses as presently contemplated, all
to the extent necessary to avoid a material adverse effect on the business,
property, prospects, profits or condition (financial or otherwise) of the
Company and the Subsidiary taken as a whole (a "Material Adverse Effect").
Neither the Company nor the Subsidiary has finally been denied any application
for any such licenses, permits, franchises or other governmental authorizations
necessary to its business.
3.9. Certain Events. Subsequent to the respective dates as of which
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information is given in the Information Materials, (1) the Company and its
Subsidiary have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business; (2) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital
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stock; and (3) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its Subsidiary, except in
each case as described in or contemplated by the Information Materials.
3.10. Payments by Subsidiary. The Company's Subsidiary is not currently
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prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on its capital stock, from repaying to the
Company any loans or advances to it from the Company or from transferring any of
its property or assets to the Company, except as described in or contemplated by
the Information Materials.
3.11. Accounting. The Company and its Subsidiary maintain a system of
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internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with United States generally accepted
accounting principles and to maintain asset accountability; (3) access to assets
is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.12. No Violations. Neither the Company nor the Subsidiary is (i) in
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violation of its Memorandum of Association or Articles of Association or other
organizational documents, (ii) in violation of any law, ordinance,
administrative or governmental rule or regulation applicable to it or any of its
properties, except where any such violation or violations in the aggregate could
not reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), management, business prospects, net worth or results
of the operations of the Company and its Subsidiary, taken as a whole, (iii) in
violation of any judgment, injunction, order or decree of any court,
governmental agency or body (including, without limitation, any insurance
regulatory agency or body) or arbitrator having jurisdiction over it, except
where any such violation or violations in the aggregate could not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), management, business prospects, net worth or results of the
operations of the Company and its Subsidiary, taken as a whole, and (iv) no
default exists, and no event has occurred which, with notice or lapse of time or
both, would constitute a default in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or its Subsidiary is a party
or by which the Company or its Subsidiary or any of their respective properties
is bound or may be affected, except where any such default or event or defaults
or events in the aggregate could not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), management, business
prospects, net worth or results of the operations of the Company and its
Subsidiary, taken as a whole.
3.13. Share Certificates. The forms of certificates for the Shares and
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the Warrants conform to the requirements of the Companies Law (1998 Revision) of
the Cayman Islands, British West Indies.
3.14. Exchange Controls. No currency exchange control laws or
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withholding taxes of the Cayman Islands, British West Indies or elsewhere apply
to the payment of dividends (i) on the
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Ordinary Shares by the Company or (ii) by the Subsidiary to the Company, except
in each case as described in or contemplated by the Information Materials.
3.15. Certain Insurance Regulations. The Subsidiary has made application
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to be duly licensed by the Governor-in-Council as an unrestricted Class "B"
insurer under the Insurance Law (1998 Revision) of the Cayman Islands, British
West Indies (the "Insurance Law") and is in compliance with the requirements of
the Insurance Law and any applicable rules and regulations thereunder and will
file all statutory financial returns, reports, documents or other information
required to be filed thereunder, except where the failure to comply or to file
would not have a material adverse effect on the condition (financial or
otherwise), management, business prospects, net worth, or results of the
operations of the Company and its Subsidiary, taken as a whole. The Company is
a holding company and is not subject to Cayman Islands insurance regulations.
The Company and its Subsidiary are in compliance with all other insurance laws
and regulations of the jurisdictions that apply to them, including laws that
relate to companies that control insurance companies, except where the failure
to comply would not have a material adverse effect on the condition (financial
or otherwise), management, business prospects, net worth, or results of the
operations of the Company and its Subsidiary, taken as a whole. Neither the
Company nor its Subsidiary has received any notification from any insurance
authority, commission or other insurance regulatory body in the Cayman Islands
or elsewhere to the effect that the Subsidiary is not in compliance with any
insurance law or regulation.
3.16. Stamp Tax. The Investor will not be subject to any excise or
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similar tax imposed in the Cayman Islands, British West Indies in connection
with the offering, sale or purchase of the Shares, the Class A Warrants or the
exercise thereunder for the Ordinary Shares.
3.17. Securities Laws.
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(a) It is not necessary in connection with the offer, sale and
issuance of the Shares in the manner contemplated by this Agreement, or the
issuance of the Ordinary Shares upon exercise of the Warrants in the manner
contemplated thereby, to register the Shares, the Warrants or the underlying
Ordinary Shares under the Securities Act, or any applicable state securities or
blue sky laws.
(b) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D ("Regulation D") under the Securities Act) of the Company
has directly or through any agent (i) sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Shares or
the Warrants or the underlying Ordinary Shares in a manner that would require
the registration of the Shares under the Securities Act or (ii) engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offering of the Shares or the Warrants.
3.18. Disclosure.
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(a) No representation or warranty of the Company in this
Agreement and no statement in the Information Materials omits to state a
material fact necessary to make the
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statements herein or therein, in light of the circumstances in which they were
made, not misleading.
(b) No notice given pursuant to Section 5.2 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
(c) There is no fact known to the Company that has specific
application to either the Company or the Subsidiary (other than general economic
or industry conditions) and that materially adversely affects the condition
(financial or otherwise), management, business prospects, net worth or results
of the operations of the Company and the Subsidiary, taken as a whole, that has
not been set forth in this Agreement or the Information Materials.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to the Company as follows:
(a) It is a _________________ duly formed and validly existing
under the laws of __________________.
(b) It has all requisite ____________________ power and
authority to execute and deliver this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the performance by
the Investor of its obligations hereunder, have been duly authorized by the
Investor, and no other proceeding therefor on the part of the Investor or any of
its _____________ is required. This Agreement has been duly executed and
delivered by the Investor and is the valid and binding obligation of the
Investor, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to the
enforcement of creditors' rights and remedies or by other equitable principles
of general application.
(c) It is acquiring the Shares and Warrants (and will acquire
the Ordinary Shares issued upon exercise of the Warrants) for its own account
for investment and not with a view towards the distribution thereof, nor with
any present intention of distributing the Shares or Warrants (or the Ordinary
Shares acquired upon exercise of the Warrants), but subject, nevertheless, to
any requirement of law that the disposition of the Investor's property shall at
all times be within the Investor's control, and without prejudice to the
Investor's right at all times to sell or otherwise dispose of all or any part of
such securities under a registration under the Securities Act or under an
exemption from said registration available under the Securities Act to the
extent permitted by the Transaction Documents.
(d) It is (i) a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act and (ii) an institutional buyer and an
"accredited investor" within the meaning of Rule 501(a)(3) under the Securities
Act, being a _______________ not formed for the specific purpose of acquiring
the Shares and Warrants, with the total assets in excess of $5,000,000.
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(e) It has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
investment in the Company as contemplated by this Agreement, and is able to bear
the economic risk of such investment for an indefinite period of time. It has
been furnished access to such information and documents as it has requested and
has been afforded an opportunity to ask questions of and receive answers from
representatives of the Company concerning the terms and conditions of this
Agreement and the purchase of the Shares and Warrants contemplated hereby.
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1. Resale of Securities.
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(a) The Investor covenants that it will not sell or otherwise
transfer the Shares or Warrants (or any Ordinary Shares acquired upon exercise
of the Warrants) except pursuant to an effective registration under the
Securities Act or in a transaction which, in the opinion of counsel (which may
be in-house counsel to the Investor), qualifies as an exempt transaction under
the Securities Act and the rules and regulations promulgated thereunder and
subject to the provisions of the Transaction Documents.
(b) The certificates evidencing the Shares, Warrants and
Ordinary Shares issuable upon exercise of the Warrants will bear the following
legend reflecting the foregoing restrictions on the transfer of such securities:
"The securities evidenced hereby have not been registered under
the Securities Act of 1933, as amended (the "Act"), and may not
be transferred except pursuant to an effective registration
under the Act or in a transaction which, in the opinion of
counsel, qualifies as an exempt transaction under the Act and
the rules and regulations promulgated thereunder."
5.2. Covenants Pending Closing. Pending the Closing the Company will
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not, without the Investor's prior written consent, take any action which would
result in any of the representations or warranties contained in this Agreement
not being true in all respects at and as of the time immediately after such
action, or in any of the covenants contained in this Agreement becoming
incapable of performance in all respects. The Company will promptly advise the
Investor in writing of any action or event of which it becomes aware which has
the effect of making incorrect any of such representations or warranties in any
respect or which has the effect of rendering any of such covenants incapable of
performance.
5.3. Further Assurance. Each of the parties shall execute such documents
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and other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. Each such party shall use its reasonable efforts to fulfill or obtain
the fulfillment of the conditions to the Closing as promptly as practicable.
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SECTION 6. INVESTOR'S CLOSING CONDITIONS
The obligation of the Investor to purchase and pay for the Shares and
Warrants on the Closing Date, as provided in Section 2 hereof, shall be subject
to the performance by the Company of its agreements theretofore to be performed
hereunder and to the satisfaction, prior thereto or concurrently therewith, of
the following further conditions:
6.1. Representations and Warranties. The representations and warranties
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of the Company contained in this Agreement shall be true in all respects on and
as of the Closing Date as though such warranties and representations were made
at and as of such date, except as otherwise affected by the transactions
contemplated hereby.
6.2. Compliance with Agreement. The Company shall have performed and
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complied in all respects with all agreements, covenants and conditions contained
in this Agreement which are required to be performed or complied with by the
Company prior to or on the Closing Date.
6.3. Secretary's Certificate. The Investor shall have received a
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certificate, dated the Closing Date, signed by the Secretary of the Company,
certifying that the conditions specified in the foregoing Sections 6.1 and 6.2
hereof have been fulfilled.
6.4. Delivery of Shares and Warrants. The Company shall have delivered
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to the Investor the certificates evidencing the Shares and Warrants being
purchased by it hereunder as provided in Section 2.1.
6.5. Injunction. There shall be no injunction, writ, preliminary
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restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.
6.6. Consummation of Public Offering. The Company shall have consummated
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the Public Offering as contemplated by the Registration Statement.
6.7. Registration Rights Agreement. The Company shall have executed the
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Registration Rights Agreement, the form of which is attached as Exhibit B hereto
(the "Registration Rights Agreement").
SECTION 7. COMPANY CLOSING CONDITIONS
The obligation of the Company to issue and deliver the Shares and Warrants
on the Closing Date, as provided in Section 2 hereof, shall be subject to the
performance by the Investor of its agreements theretofore to be performed
hereunder and to the satisfaction, prior thereto or concurrently therewith, of
the following further conditions:
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7.1. Representations and Warranties. The representations and warranties
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of the Investor contained in this Agreement shall be true on and as of the
Closing Date as though such warranties and representations were made at and as
of such date, except as otherwise affected by the transactions contemplated
hereby.
7.2. Compliance with Agreement. The Investor shall have performed and
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complied with all agreements, covenants and conditions contained in this
Agreement which are required to be performed or complied with by it prior to or
on the Closing Date.
7.3. Injunction. There shall be no injunction, writ, preliminary
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restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.
7.4. Payment of Purchase Price. The Investor shall have delivered to the
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Company the Purchase Price as provided in Section 2.1.
7.5. Consummation of Public Offering. The Company shall have consummated
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the Public Offering as contemplated by the Registration Statement.
SECTION 8. LIMITATION ON DISPOSITION
The Investor will not, without the consent of the Company, sell, transfer
or otherwise dispose of the Shares or Warrants for a period of six months after
the Closing Date except (i) to one or more of its Affiliates, or (ii) to any
institutional investor purchasing all of the Shares and Warrants then held by
the Investor (or if not all such Shares and Warrants, Shares and/or Warrants
representing at least 20,000 Ordinary Shares (assuming exercise of the
Warrants)); provided that any such transferee, as a condition to such transfer,
shall agree to be bound by the provisions of this Section 8.
SECTION 9. COVENANTS
9.1. Inspection. As long as an Investor owns beneficially (within the
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meaning of Rule 13d-3 under the Exchange Act) at least two percent (2%) of the
total outstanding Ordinary Shares of the Company, the Company shall permit such
Investor, its nominee, assignee, and its representative during normal business
hours and upon reasonable advance notice to visit and inspect any of the
properties of the Company and the Subsidiaries, to examine all its books of
account, records, reports and other papers not contractually required of the
Company to be confidential or secret, to make copies and extracts therefrom, and
to discuss its affairs, finances and accounts with its officers, directors, key
employees and independent public accountants or any of them (and by this
provision the Company authorizes said accountants to discuss with such Investor,
its nominees, assignees and representatives the finances and affairs of the
Company and the Subsidiary), all at such reasonable times and as often as may be
reasonably requested.
9.2. Keeping of Books. The Company will keep proper books of record and
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account, in which full and correct entries shall be made of all financial
transactions and the assets and business of the Company and the Subsidiary in
accordance with GAAP.
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9.3. Lost, etc. Certificates Evidencing Shares (or Ordinary Shares);
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Exchange. Upon receipt by the Company of evidence reasonably satisfactory to it
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of the loss, theft, destruction or mutilation of any certificate evidencing any
Shares or Warrants (or Ordinary Shares issuable upon exercise of Warrants) owned
by one of the Investors, and (in the case of loss, theft or destruction) of an
unsecured indemnity satisfactory to it, and upon reimbursement to the Company of
all reasonable expenses incidental thereto, and upon surrender and cancellation
of such certificate, if mutilated, the Company will make and deliver in lieu of
such certificate a new certificate of like tenor and for the number of Ordinary
Shares evidenced by such certificate which remain outstanding. Such Investor's
agreement of indemnity shall constitute indemnity satisfactory to the Company
for purposes of this Section 9.3. Upon surrender of any certificate representing
any Shares (or Ordinary Shares issuable upon exercise of the Warrants) for
exchange at the office of the Company, the Company at its expense will cause to
be issued in exchange therefor new certificates in such denomination or
denominations as may be requested for the same aggregate number of Shares,
Warrants or Ordinary Shares, as the case may be, represented by the certificate
so surrendered and registered as such holder may request. The Company will also
pay the cost of all deliveries of certificates for such securities to the office
of such Investor (including the cost of insurance against loss or theft in an
amount satisfactory to the holders) upon any exchange provided for in this
Section 9.3.
9.4. Confidential Information. The Investor acknowledges that its
------------------------
receipt of material non-public information as a consequence of its exercise of
its rights under Section 9.1 may obligate it not to trade in securities of the
Company which it may hold so long as such information is not publicly disclosed
by the Company.
SECTION 10. INTERPRETATION OF THIS AGREEMENT
10.1. Terms Defined. As used in this Agreement, the following terms have
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the respective meanings set forth below or set forth in the Section hereof
following such term:
Affiliate: means any Person or entity, directly or indirectly,
controlling, controlled by or under common control with such Person or entity.
Business Day: shall mean a day other than a Saturday, Sunday or other day
on which banks in New York, New York and ▇▇▇▇▇▇ Town, Grand Cayman, Cayman
Islands are not required or authorized by law to close.
Closing: shall have the meaning set forth in Section 2.2.
Closing Date: shall have the meaning set forth in Section 2.2.
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended.
GAAP: at any time shall mean United States generally accepted accounting
principles at the time in effect.
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Investor: shall mean the Person executing this Agreement on the signature
page hereof and its successors and assigns as the holder of Shares, Warrants or
Ordinary Shares issuable upon exercise of the Warrants.
IPO Closing Date: shall mean the date of the consummation of the Public
Offering.
Material Adverse Effect: shall have the meaning set forth in Section 3.9.
Ordinary Shares: shall have the meaning set forth in Section 1.
Organizational Documents: shall mean the Company's Articles of
Association, Memorandum of Association and other constructive document as
amended through the date hereof.
Person: shall mean an individual, partnership, joint-stock company,
corporation, limited liability company, trust or unincorporated organization,
and a government or agency or political subdivision thereof.
Public Offering: shall mean the sale by the Company of its Ordinary Shares
to the underwriters as contemplated by the Registration Statement.
Registration Rights Agreement: shall have the meaning set forth in Section
6.7.
Registration Statement: shall mean the Registration Statement filed by the
Company with the SEC on Form S-1 (No. 333-57227) on June 19, 1998, as amended,
in the form it becomes effective under the Securities Act.
SEC: shall mean the Securities and Exchange Commission.
Securities Act: shall mean the Securities Act of 1933, as amended.
Shares: shall have the meaning set forth in Section 2.1.
Transaction Documents: shall mean this Agreement, the Registration Rights
Agreement and the Class A Warrants.
Warrants: shall have the meaning set forth in Section 1.
10.2. Directly or Indirectly. Where any provision in this Agreement
----------------------
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
10.3. Section Headings. The headings of the sections and subsections of
----------------
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
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SECTION 11. MISCELLANEOUS
11.1. Notices.
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(a) All communications under this Agreement shall be in writing
and shall be delivered by hand or facsimile or mailed by overnight courier or by
registered mail or certified mail, postage prepaid:
(1) if to the Investor, at: __________________________,
Facsimile: _________________, or
(2) if to the Company, at: ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ Town, Grand Cayman, Cayman Islands, British West Indies
(facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), marked for the attention of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, or at such other address as it may have furnished the
Investor in writing.
(b) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed by
courier, on the first business day following the date of such mailing; and if
mailed by registered or certified mail, on the third business day after the date
of such mailing.
11.2. Expenses and Taxes. The Company will pay, and save and hold the
------------------
Investor harmless from, any and all claims arising out of or relating to the
transactions contemplated by the Transaction Documents or the performance
thereof and all liabilities (including interest and penalties) with respect to,
or resulting from any delay or failure in paying, stamp and other taxes (other
than income taxes), if any, which may be payable or determined to be payable on
the execution and delivery or acquisition of the Shares, Warrants or the
Ordinary Shares issuable upon exercise of the Warrants.
11.3. Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by the
Investors on the Closing Date (except for certificates evidencing the Shares
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to the Investors, may be reproduced by the
Investors by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process and either Investor may destroy any
original document so reproduced. All parties hereto agree and stipulate that any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by an Investor in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
11.4. Termination and Survival. Unless the Closing has occurred prior
------------------------
thereto, this Agreement and, except as herein provided, all the rights of the
parties hereto, shall terminate on December 31, 1998 (unless such date is
extended by mutual written consent). Notwithstanding the foregoing, Section 11.2
hereof shall survive the termination of this Agreement. All warranties,
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representations, and covenants made by the Investor and the Company herein or in
any certificate or other instrument delivered by the Investor or the Company
under this Agreement shall be considered to have been relied upon by the Company
or the Investor, as the case may be, regardless of any investigation made by the
Investor and shall survive the Closing, all deliveries to the Investor of the
Shares and Warrants, or payment to the Company for such Shares and Warrants,
regardless of any investigation made by the Company or the Investor, as the case
may be, or on the Company's or the Investor's behalf. All statements in any such
certificate or other instrument shall constitute warranties and representations
by the Company hereunder, except that the Investor shall not be required to
purchase Shares or Warrants from any Person other than the Company.
11.5. Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and permitted assigns of each of the
parties.
11.6. Entire Agreement; Amendment and Waiver. This Agreement and the
--------------------------------------
agreements attached as Exhibits hereto constitute the entire understandings of
the parties hereto and supersede all prior agreements or understandings with
respect to the subject matter hereof among such parties. This Agreement may be
amended, and the observance of any term of this Agreement may be waived, with
(and only with) the written consent of the Company and the Investor.
11.7. Severability. In the event that any part or parts of this
------------
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.
11.8. Governing Law; Submission to Jurisdiction.
-----------------------------------------
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
(b) Each of the Company and the Investor (each a "Party")
irrevocably submits to the non-exclusive in personam jurisdiction of any New
York State or United States federal court sitting in the Borough of Manhattan,
The City of New York, over any suit, action or proceeding arising out of or
relating to the Transaction Documents. To the full extent it may effectively do
so under applicable law, each Party irrevocably waives and agrees not to assert,
by way of motion, as a defense or otherwise, any claim that it is not subject to
the in personam jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
(c) Each Party agrees, to the full extent it may effectively do
so under applicable law, that a final judgment in any suit, action or proceeding
of the nature referred to in paragraph (b) of this Section 11.8 brought in any
such court shall be conclusive and binding upon such Party, subject to rights of
appeal, and may be enforced in the courts of the United States or
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the State of New York (or any other courts to the jurisdiction of which such
Party is or may be subject) by a suit upon such judgment.
(d) Each Party consents to process being served in any suit,
action or proceeding of the nature referred to in paragraph (b) of this Section
11.8 by mailing a copy thereof by registered or certified mail, postage prepaid,
return receipt requested, to the address of such Party specified in Section 11.1
or at such other address of which the other Party shall then have been notified
pursuant to said Section. Without limiting the foregoing, the Company hereby
appoints, in the case of any such suit, action or proceeding brought in the
courts of or in the State of New York, CT Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, to receive, for it and on its behalf, service of process in the State
of New York with respect thereto. Each Party agrees that such service upon
receipt by it or its agent, as the case may be, (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the full extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to such
Party. Notices hereunder shall be conclusively presumed received as evidenced by
a delivery receipt furnished by the United States Postal Service or any
reputable commercial delivery service.
(e) Nothing in this Section 11.8 shall affect the right of any
Party to serve process in any manner permitted by law, or limit any right that
such Party may have to bring proceedings against the other Party in the courts
of any appropriate jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
(f) Each Party waives trial by jury in any action brought on or
with respect to the Transaction Documents or any other document executed in
connection therewith.
11.9. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first above written.
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
By: ________________________________________
Name: __________________________________
Title: _________________________________
[INVESTOR]
By: ________________________________________
Name: __________________________________
Title: _________________________________
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