Exhibit 10.2
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INVESTMENT AGREEMENT
dated as of _________, 2002
by and among
PXRE GROUP LTD.
and
THE INVESTORS NAMED ON EXHIBIT A HERETO
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................................................1
1.1 Definitions.............................................................................................1
ARTICLE II RESTRICTIONS ON TRANSFER............................................................................6
2.1 Restrictions on Transfer................................................................................6
2.2 Involuntary Transfer....................................................................................7
ARTICLE III STANDSTILL AGREEMENT................................................................................7
3.1 Standstill Restrictions.................................................................................7
ARTICLE IV REGISTRATION RIGHTS.................................................................................9
4.1 Requests for Registration...............................................................................9
4.2 Long-Form Registrations................................................................................10
4.3 Short-Form Registrations...............................................................................10
4.4 Priority on Demand Registrations.......................................................................11
4.5 Other Registration Rights..............................................................................11
4.6 Blackout Events........................................................................................11
4.7 Right to Piggyback.....................................................................................12
4.8 Piggyback Expenses.....................................................................................12
4.9 Holdback...............................................................................................12
4.10 Selection of Underwriters..............................................................................12
4.11 Registration Procedures................................................................................13
4.12 Fees Generally.........................................................................................15
4.13 Number of Registration Requests........................................................................15
ARTICLE V INDEMNIFICATION....................................................................................15
5.1 Indemnification by the Company.........................................................................15
5.2 Indemnification by a Holder............................................................................16
5.3 Contribution by Indemnifying Party.....................................................................17
5.4 Indemnification Procedure..............................................................................17
5.5 Underwriting Agreement.................................................................................18
5.6 Financial Assistance...................................................................................18
ARTICLE VI MISCELLANEOUS......................................................................................18
6.1 Specific Performance...................................................................................18
6.2 Amendments.............................................................................................19
6.3 Successors and Assigns.................................................................................19
6.4 Notices................................................................................................19
6.5 Rule 144...............................................................................................21
6.6 Headings; Certain Conventions..........................................................................21
6.7 Invalid Provisions.....................................................................................21
6.8 Governing Law..........................................................................................21
6.9 Waiver of Jury Trial...................................................................................22
6.10 Jurisdiction...........................................................................................22
6.11 Counterparts...........................................................................................22
6.12 Entire Agreement.......................................................................................22
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This INVESTMENT AGREEMENT (as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof, this "Investment
Agreement"), dated as of _________, 2002, is made by and among PXRE Group Ltd.,
a Bermuda company (the "Company"), and each of the Investors named in the
signature page hereto (each an "Investor" and collectively, the "Investors").
RECITALS
WHEREAS, the Company and the Investors have entered into that certain
Purchase Agreement, dated as of December 10, 2001 (as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, the "Purchase Agreement"), pursuant to which, among other things,
the Investors are acquiring newly issued shares of Series A Convertible Voting
Preferred Shares, par value $1.00 per share, Series B Convertible Voting
Preferred Shares, par value $1.00 per share and Series C Convertible Voting
Preferred Shares, par value $1.00 per share, of the Company (collectively, the
"Preferred Shares"); and
WHEREAS, the Purchase Agreement, among other things, provides that the
execution and delivery of this Investment Agreement is a condition to the
consummation of the other transactions contemplated by the Purchase Agreement.
NOW THEREFORE, in connection with the Purchase Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following defined terms, when used in this
Investment Agreement, shall have the respective meanings set forth below
(such definitions to be equally applicable to both singular and plural
forms of the terms defined):
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with, that
Person; provided, however, that with respect to Capital Z, CZI shall not be
considered an Affiliate. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled by",
and "under common control with") as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through ownership of voting
securities or by contract or otherwise.
"Allowed Hedging Transactions" has the meaning ascribed to it in
Section 3.1(d).
"Blackout Event" has the meaning ascribed to it in Section 4.6.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of New York are authorized or obligated to
close.
"Capital Z" means Capital Z Financial Services Fund II, L.P. and
Capital Z Financial Services Private Fund II, L.P., collectively.
"Capital Z Holders" means for so long as such Person owns Registrable
Securities, Capital Z, any Affiliate thereof and any Person acquiring or
otherwise receiving, directly or indirectly, Registrable Securities from Capital
Z or any Affiliate thereof in accordance with Article II hereof.
"Class A Common Shares" means the Class A Convertible Voting Common
Shares of the Company, par value $1.00 per share.
"Class B Common Shares" means the Class B Convertible Voting Common
Shares of the Company, par value $1.00 per share.
"Class C Common Shares" means the Class C Convertible Voting Common
Shares of the Company, par value $1.00 per share.
"Closing" has the meaning ascribed to it in the Purchase Agreement.
"Closing Date" has the meaning ascribed to it in the Purchase
Agreement.
"Code" means the Internal Revenue Code of 1986 of the United States of
America, as amended.
"Commission" means the United States Securities and Exchange
Commission.
"Common Shares" means common shares of the Company, par value $1.00 per
share, excluding however the Convertible Common Shares.
"Company" has the meaning ascribed to it in the introductory paragraph
of this Investment Agreement.
"Company Securities" means the Preferred Shares, the Convertible Common
Shares and the Common Shares issuable upon conversion of the Convertible Common
Shares.
"Convertible Common Shares" means the Class A Common Shares, the Class
B Common Shares and the Class C Common Shares.
"CZI" means Capital Z Investments, L.P. and Capital Z Investments II,
L.P.
"Demand Registration" means any Long-Form Registration or Short-Form
Registration requested in accordance with Section 4.1(a).
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"Exchange Act" means the Securities Exchange Act of 1934 of the United
States of America, as amended, and the rules and regulations of the Commission
issued thereunder.
"Fair Market Value" with respect to Common Shares, on any date, shall
be deemed to be the average of the reported closing prices for each of the five
(5) consecutive trading days ending on the trading day before such date of
determination. The reported closing price for each day shall be the reported
closing price on the principal national securities exchange or automated
quotation system on which the Common Shares are then listed or admitted to
trading. With respect to the Convertible Common Shares, the Fair Market Value
shall equal the Fair Market Value of the Common Shares into which such
Convertible Common Shares are Convertible. In the case of the Preferred Shares,
and with respect to the Common Shares if they are not then listed or admitted to
trading on any national securities exchange or automated quotation system or if
the closing price cannot be so determined, the Fair Market Value shall be
determined by (x) the written agreement of the Company and the respective holder
of Company Securities being valued and (y) in the event that no such agreement
is reached within twenty (20) days after the date of the event giving rise to
the need to determine the Fair Market Value, (A) by an appraiser of recognized
standing selected by the respective holder of Company Securities and the Company
or (B) if the respective holder of Company Securities and the Company cannot
agree on an appraiser within twenty (20) days after the date of the event giving
rise to the need to determine the Fair Market Value, each shall select an
appraiser of recognized standing and the two appraisers shall designate a third
appraiser of recognized standing, whose appraisal shall be determinative of such
value. The cost of such appraisal shall be borne by the Company. The Company
shall cooperate, and shall provide all necessary information and assistance, to
permit any determination under the preceding clauses (x) and (y).
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state,
country, city or other political subdivision.
"Hedging Contracts" means with respect to the Common Shares (or any
shares convertible into Common Shares), any interest rate contracts, foreign
exchange contracts, currency swaps or option agreements, forward contracts,
commodity swaps, purchase or option agreements, other commodity price hedging
arrangements and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Holder" means any Person owning Registrable Securities who is a party
to this Investment Agreement or any transferee obtaining Registrable Securities
in accordance with Article II hereof for so long as such Person shall hold
Registrable Securities.
"Investment Agreement" has the meaning set forth in the forepart
hereof.
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"Investors" has the meaning ascribed to it in the introductory
paragraph of this Investment Agreement.
"Involuntary Transfer" means any involuntary Transfer or Transfer by
operation of law of Company Securities by or in which the owner of such Company
Securities shall be deprived or divested of any right, title or interest in or
to Company Securities, including, without limitation, by seizure under levy of
attachment or execution or by foreclosure upon a pledge, pursuant to any statute
pertaining to escheat or abandoned property, upon or occasioned by the legal
incompetence of a legal representative of any owner of Company Securities.
Notwithstanding the foregoing, Involuntary Transfer shall not include the
Transfer of Company Securities in a Permitted Transfer, provided that the
transferee is a party hereto or executes a Joinder Agreement and becomes a party
to this agreement.
"Joinder Agreement" means a Joinder Agreement in form and substance
reasonably satisfactory to the Company.
"Law" or "Laws" means, the common law and all federal, state, local and
foreign laws, rules and regulations, orders, judgments, decrees and other
determinations of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision or of any
Governmental or Regulatory Authority.
"Long-Form Registration" has the meaning ascribed to it in Section
4.1(a).
"Permitted Transfer" means any Transfer (i) in accordance with Bermuda
Law and the Bye-laws of the Company and (ii) pursuant to a registered public
offering, in accordance with Rule 144 or pursuant to another available exemption
under the Securities Act, which meets the following conditions:
(a) such Transfer (i) does not result in any Person
"controlling" (as such term is defined in ss.38a-129(3) of the
Connecticut Insurance Law) the Company, (ii) is approved by
the Connecticut Department of Insurance prior to effecting
such Transfer or entering into any agreement to effect any
such Transfer or (iii) the Connecticut Department of Insurance
has consented to a Disclaimer of Affiliation (as defined by
applicable Connecticut insurance regulations) relating to such
Transfer; and
(b) such Transfer does not result in the Company or
any Subsidiary of the Company being deemed a controlled
foreign corporation, for any purposes other than the inclusion
of Related Person Insurance Income, under the Code, and does
not result in the transferring Person or any other Person
being considered a United States Shareholder within the
meaning of Section 951(b) of the Code, without regard to
Section 953(c) of the Code and without application of Bye-law
20(4) of the Company's Bye-Laws; provided, however, that this
subsection (b)
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shall not be a condition to a Permitted Transfer if the Board
of Directors agrees, prior to any Transfer, to waive such
condition.
"Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company or partnership, proprietorship,
other business organization, trust, union, association or Governmental or
Regulatory Authority.
"Piggyback Holders" has the meaning ascribed to it in Section 4.7.
"Preferred Shares" has the meaning ascribed to it in the recitals
hereto.
"Purchase Agreement" has the meaning ascribed to it in the recitals
hereto.
"Rainwater" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual.
"Rainwater Holder" means for so long as such Person owns Registrable
Securities, Rainwater, any Affiliate thereof and any Person acquiring or
otherwise receiving, directly or indirectly, Registrable Securities from
Rainwater or any Affiliate thereof in accordance with Article II hereof.
"Registrable Securities" means, at any time, the Common Shares issued
or issuable upon the conversion of the Convertible Common Shares; provided,
however, that "Registrable Securities" shall not include any Common Shares or
other securities obtained or transferred pursuant to an effective registration
statement under the Securities Act.
"Registration Expenses" has the meaning ascribed to it in Section
4.12(a).
"Registration Statement" has the meaning ascribed to it in Section
4.11(a).
"Requesting Holders" means, with respect to any Demand Registration,
the Capital Z Holders, if Capital Z Holders have requested such Demand
Registration, the Reservoir Holders, if Reservoir Holders have requested such
Demand Registration, and the Rainwater Holders, if Rainwater Holders have
requested such Demand Registration.
"Required Capital Z Holders" means, as of the date of any determination
thereof, Capital Z Holders which then hold Registrable Securities representing
at least a majority (by number of shares) of the Registrable Securities then
held by all Capital Z Holders.
"Required Rainwater Holders" means, as of the date of any determination
thereof, Rainwater Holders which then hold Registrable Securities representing
at least a majority (by number of shares) of the Registrable Securities then
held by all Rainwater Holders.
"Required Reservoir Holders" means, as of the date of any determination
thereof, Reservoir Holders which then hold Registrable Securities representing
at least a majority (by number of shares) of the Registrable Securities then
held by all Reservoir Holders.
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"Reservoir" means, collectively, Reservoir Capital Partners, L.P. and
Reservoir Capital Master Fund, L.P.
"Reservoir Holder" means for so long as such Person owns Registrable
Securities, Reservoir, any Affiliate thereof and any Person acquiring or
otherwise receiving, directly or indirectly, Registrable Securities from
Reservoir or any Affiliate thereof in accordance with Article II hereof.
"Securities Act" means the Securities Act of 1933, as amended, of the
United States of America and the rules and regulations of the Commission issued
thereunder.
"Selling Expenses" has the meaning ascribed to it in Section 4.12(a).
"Short-Form Registration" has the meaning ascribed to it in Section
4.1(a).
"Subsidiary" means any Person in which the Company, directly or
indirectly through Subsidiaries or otherwise, beneficially owns at least 50% of
either the equity interest in, or the voting control of, such Person, whether or
not existing on the date hereof.
"Transfer" means, directly or indirectly, any sale, transfer,
assignment, hypothecation, pledge or other disposition of any Company Securities
or any interests therein.
"Violation" has the meaning ascribed to it in Section 5.1.
ARTICLE II
RESTRICTIONS ON TRANSFER
2.1 Restrictions on Transfer. Each of Capital Z, Reservoir,
Rainwater and any transferee receiving Company Securities covenants and
agrees with the Company that it will not Transfer any Preferred Shares (or
Convertible Common Shares or any Common Shares into which the Convertible
Common Shares have been converted) held by such Person unless (i) such
Transfer is a Permitted Transfer and (ii) the transferee in any such
Permitted Transfer executes a Joinder Agreement and thereby becomes a party
to this Investment Agreement; provided, however, that any Person receiving
Company Securities registered in a public offering or in a sale under Rule
144 of the Securities Act shall not be obligated to execute a Joinder
Agreement.
2.2 Involuntary Transfer.
(a) Upon the occurrence of any event that would cause any
Company Securities to be Transferred by Involuntary Transfer, the holder of
such Company Securities subject to such Involuntary Transfer (or the legal
representative or successor thereof) shall give the Company written notice
thereof stating the terms of such Involuntary Transfer, the identity of the
transferee or proposed transferee, the
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price or other consideration, if readily determinable, for which the
Company Securities are proposed to be or have been Transferred and the
number of Company Securities which are the subject of such Transfer. Upon
the receipt of such notice, the Company shall have the right and option to
purchase all (but not less than all) of such Company Securities, which
right shall be exercised by written notice given by the Company to the
transferor (or transferee following occurrence of the Involuntary Transfer)
within a period of forty-five (45) days from the date by which the Company
receives such notice.
(b) If the Company otherwise obtains actual knowledge of an
Involuntary Transfer as to which written notice pursuant to Section 2.2(a)
has not been given, the Company shall have the right and option to purchase
all (but not less than all) of such Company Securities, which right shall
be exercised by written notice given by the Company to the transferor (or
transferee following the occurrence of the Involuntary Transfer) within
forty-five (45) days following the later of (i) the Company's obtaining
actual knowledge of such proposed or completed Transfer and (ii) the date
of such Involuntary Transfer.
(c) Any purchase pursuant to this Section 2.2 shall be at the
price and on the terms applicable to such Involuntary Transfer. If the
nature of the event giving rise to such Involuntary Transfer is such that
no readily determinable consideration is to be paid for or assigned to the
Transfer of the Company Securities, the price to be paid by the Company for
each of the Company Securities shall be the Fair Market Value thereof as of
the date of Transfer. The closing of the purchase and sale of such Company
Securities pursuant to this Section 2.2 shall be held at the place and on
the date established by the Company, which in no event shall be less than
ten (10) nor more than thirty (30) days from the date on which the Company
gives notice of its election to purchase such Company Securities, and shall
be in accordance with the procedures set forth in this Section 2.2.
ARTICLE III
STANDSTILL AGREEMENT
3.1 Standstill Restrictions.
(a) During a period of five years following the Closing Date,
Capital Z, Reservoir, Rainwater and any transferee receiving Company
Securities covenant and agree that, without the prior affirmative vote of a
majority of the members of the Board of Directors in a specific resolution
to that effect adopted prior to the taking of such action, they shall not,
and they shall not permit any of their respective Affiliates to, directly
or indirectly acquire, agree to acquire, propose to acquire (or publicly
announce or otherwise disclose an intention to propose to acquire) or offer
to acquire or become the beneficial owner of, or obtain any rights in
respect of, by purchase or otherwise, any (x) material asset of the Company
or any Subsidiary or (y) additional Common Shares or other capital shares
of the Company
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(provided that holders of Company Securities shall be permitted to convert
their Preferred Shares and Convertible Common Shares in accordance with the
terms thereof) and it being understood and agreed that neither Capital Z
nor Reservoir shall be deemed to beneficially own any capital shares or
assets of the Company held by their limited partners or held by investment
partnerships or funds in which Reservoir, Capital Z or Rainwater or their
respective Affiliates have invested, in each case provided that such
limited partner, investment partnership or investment fund is not an
Affiliate of Capital Z or Reservoir, as applicable.
(b) So long as Capital Z, Reservoir, Rainwater and any
transferee receiving Company Securities own any Preferred Shares or
Convertible Common Shares, Capital Z, Reservoir, Rainwater and any
transferee receiving Company Securities covenant and agree that without the
prior affirmative vote of a majority of the members of the Board of
Directors in a specific resolution to that effect adopted prior to the
taking of such action, they shall not, and they shall not permit any of
their respective Affiliates to, directly or indirectly:
(i) sell short any Common Shares or other capital shares of
the Company except as provided below in Section 3.1(d);
(ii) engage in any Hedging Transactions except as provided
below in Section 3.1(d);
(iii) propose (or publicly announce or otherwise disclose an
intention to propose), solicit, offer, seek to effect, negotiate with
or provide any confidential information relating to the Company or its
business to any other Person with respect to, any tender or exchange
offer, merger, amalgamation, consolidation, share exchange, business
combination, restructuring, recapitalization or similar transaction
involving the Company;
(iv) make, or in any way participate in, or assist any
Person in, any "solicitation" of "proxies" to vote (as such terms are
defined in Rule 14a-1 under the Exchange Act), solicit any consent
with respect to the voting of any Company Securities or become a
"participant" (as such term is defined in Item 4, Instruction 3 of
Schedule 14A to the Exchange Act) in any solicitation subject to Rule
14a-12(c) under the Exchange Act with respect to the Company;
(v) initiate, propose or otherwise solicit shareholders for
the approval of one or more shareholder proposals with respect to the
Company as described in Rule 14a-8 under the Exchange Act, or induce
or attempt to induce any other Person to initiate any shareholder
proposal;
(vi) except to the extent contemplated by this Investment
Agreement, form, join or in any other way participate in any
partnership, pooling agreement, syndicate, voting trust or other
"group" with respect to the Company Securities or otherwise act in
concert with any third Person for the purpose of (x)
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acquiring any Company Securities or (y) holding or disposing of
Company Securities for any purpose otherwise prohibited by this
Section 3.1;
(vii) except as specifically provided for in the Bye-Laws of
the Company, deposit any Company Securities into a voting trust or
subject any Company Securities to any arrangement or agreement with
respect to the voting thereof;
(viii) call or seek to have called any meeting of the
shareholders of the Company for any purpose otherwise prohibited by
this Section 3.1;
(ix) take any other action to seek control of the Company;
or
(x) agree to do any of the foregoing, or advise, assist,
encourage or persuade any Person to take any action with respect to
any of the foregoing.
(c) Each holder of Company Securities agrees that it will notify
the Company promptly if any written inquiries or written proposals are
received by, any written information is exchanged with respect to, or any
substantive negotiations or discussions are initiated or continued with,
any Purchaser or any of their respective Affiliates regarding any matter
described in this Section 3.1.
(d) Notwithstanding the restrictions set forth above in Section
3.1(a) or (b), with respect to any or all Company Securities, from and
after the first anniversary of the Closing, the holders of Company
Securities may (i) effect prepaid forward contracts, zero premium collars,
call sales, and capped call spread forwards and (ii) engage in similar
newly created hedging transactions (collectively, "Allowed Hedging
Contracts").
ARTICLE IV
REGISTRATION RIGHTS
4.1 Requests for Registration. (a) On or after the first
anniversary of the Closing, the Capital Z Holders (collectively), the
Reservoir Holders (collectively) and the Rainwater Holders (collectively)
may each request in writing that the Company register under the Securities
Act all or part of the Registrable Securities owned by them (x) on Form S-1
or any similar long-form registration statement (any such registration, a
"Long-Form Registration") or (y) on Form S-3 or any similar short-form
registration statement (any such registration, a "Short-Form
Registration"), if the Company qualifies to use such short form, and any
such written notice shall specify the number of Registrable Securities to
be registered. Thereafter, the Company shall use its best efforts to effect
the registration under the Securities Act and to include in such
registration (x) all Registrable Securities which such Requesting Holders
have so requested to be included therein and (y) all other Registrable
Securities to be included pursuant to this Article IV.
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(b) Any Requesting Holders that request a Demand Registration pursuant
to Section 4.1(a) may, at any time prior to the effective date of the
registration statement relating to such Demand Registration, revoke such request
by providing written notice to the Company; provided, however, that
notwithstanding such revocation, such Demand Registration shall be deemed a
request for purposes of Section 4.2 unless such Requesting Holders agree to pay
for all of the Registration Expenses incurred by the Company with respect to
such revoked Demand Registration.
(c) With respect to any Demand Registration where the number of
securities covered by the applicable registration statement is less than 50% of
the Registrable Securities requested by the Requesting Holders to be included in
such Demand Registration, the Requesting Holders may decide (x) to proceed with
such Demand Registration, provided, however, that such Demand Registration shall
not be deemed a request for purposes of Section 4.2 or (y) to abandon such
Demand Registration, in which case the Company shall reimburse the Requesting
Holders for all reasonable expenses (not limited to Selling Expenses) incurred
in connection with such abandoned Demand Registration and such Demand
Registration shall not be deemed a request for purposes of Section 4.2.
4.2 Long-Form Registrations. The Company shall be obligated to
effect up to two Long-Form Registrations for each of (a) the Capital Z
Holders (as a group) and (b) the Reservoir Holders and the Rainwater
Holders (as a group); provided, however, that the Company shall have no
obligation to file such Long-Form Registration unless the request for such
registration has been made by (x) in the case of the Capital Z Holders, the
holders of a majority of Company Securities held by the Capital Z Holders
on the date of such request and (y) in the case of the Reservoir Holders
and Rainwater Holders, the holders of a majority of Company Securities held
by the Reservoir Holders and Rainwater Holders on the date of such request;
and provided, further, that the Company shall have no obligation to file
such Long-Form Registration unless the reasonable anticipated aggregate
offering price for the Registrable Securities covered by such Long-Form
Registration would exceed $22,500,000. The Company shall pay all
Registration Expenses and the Requesting Holders shall pay all Selling
Expenses in connection with such Long-Form Registration. All Long-Form
Registrations (unless otherwise requested by the relevant Requesting
Holders) shall be underwritten registrations.
4.3 Short-Form Registrations. In addition to the Long-Form
Registrations contemplated by Section 4.2, Capital Z Holders, Reservoir
Holders and Rainwater Holders shall be entitled to request an unlimited
number of Short-Form Registrations, with respect to which the Company shall
pay all Registration Expenses and the Requesting Holders shall pay all
Selling Expenses; provided, however, that the Company shall have no
obligation to file such Short-Form Registration unless the reasonable
anticipated aggregate offering price would exceed $2,000,000. Demand
Registrations will be Short-Form Registrations whenever the Company is
qualified to use Form S-3 or any similar short form registration statement.
The Company shall
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not be required to effect more than two Short-Form Registrations in any
consecutive 12 month period.
4.4 Priority on Demand Registrations. If a Demand Registration
is an underwritten offering and the managing underwriters advise the
Company in writing that in their opinion the number of Registrable
Securities requested to be included exceeds the number of Registrable
Securities which can be sold in such offering without adversely affecting
the marketability of such offering, the Company shall include any
securities to be sold in such Demand Registration in the following order:
(i) first, the Registrable Securities requested to be included in such
registration by the Requesting Holders and by the Piggyback Holders
(pursuant to Section 4.7(a)), pro rata, based upon their total ownership,
on a fully diluted basis; (ii) second, the securities which the Company
proposes to sell; and (iii) third, any securities other than Registrable
Securities to be sold by Persons other than the Company included pursuant
to Section 4.5.
4.5 Other Registration Rights. Except as provided in this
Investment Agreement, without the written consent of a majority (by number
of shares) of the holders of the Preferred Shares, the Company will not
grant to any Person the right to request the Company to register any equity
securities of the Company, or any securities convertible, exchangeable or
exercisable for or into such securities, other than registration rights
which are junior in all instances to the rights granted to the Holders in
this Article IV.
4.6 Blackout Events. If, in the reasonable good faith judgment
of the Company, any pending bankruptcy or insolvency, pending material
merger, amalgamation, acquisition, corporate reorganization, other material
transaction or other event or circumstance involving the Company or any of
its Affiliates makes it imprudent for the Company to file a registration
statement or to be in registration (any such event, circumstance or
transaction, a "Blackout Event"), the Company shall not be obligated to
effect (whether by filing a registration statement, seeking effectiveness
of a registration statement or otherwise) any registration requested by the
Capital Z Holders, the Reservoir Holders or the Rainwater Holders;
provided, however, that the Company may only refuse to effect such
registration twice in any twelve month period. If the Company determines
that a Blackout Event exists, any registration requested by Capital Z
Holders, Reservoir Holders or Rainwater Holders shall be postponed until
the Blackout Event no longer exists; provided, further, that no such
postponement shall exceed 90 days. In the event a Blackout Event exists and
the Company has elected to postpone any registration, in the case of a
Demand Registration, the Requesting Holders may choose to withdraw their
request for registration and such withdrawn request shall not be deemed a
request for purposes of Section 4.2 and the Company shall reimburse the
Requesting Holders and any Piggyback Holders for all reasonable expenses
(not limited to Selling Expenses) incurred with such abandoned
registration.
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4.7 Right to Piggyback. (a) Whenever the Company proposes to
register any of its equity securities under the Securities Act on behalf of
the Company or otherwise (including pursuant to Section 4.1(a)) (other than
on Forms S-4 or S-8 or any successor forms), the Company shall give written
notice to all Holders (or holders of Preferred Shares if all such Shares
have not yet been converted) (the "Piggyback Holders"). If any Piggyback
Holders so request in writing within thirty (30) days after delivery of
such notice by the Company, the Company shall include in any such
registration statement the Registrable Securities held by such Piggyback
Holder and requested to be included in such registration. Any such written
request by the Piggyback Holders shall contain an undertaking on the part
of each Piggyback Holder to provide all such information and materials
concerning such Piggyback Holder and the distribution proposed by such
Piggyback Holder as the Company may reasonably request in order to comply
with all applicable requirements in connection with such registration.
(b) If such registration is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included exceeds the number of securities which can
be sold in such offering without adversely affecting the marketability of such
offering, the Company shall include any securities to be sold in such
registration in the following order: (i) first, in the case where such
registration is not a Demand Registration, the securities requested to be
included in such registration by the Company (if such registration is a
registration initiated by the Company) or any other Person (if such registration
is not a registration initiated by the Company) who, subject to Section 4.5, can
request such registration; (ii) second, the securities requested to be included
by the Piggyback Holders; and (iii) third, any securities to be sold by any
other Person or the Company (if such shares are not included pursuant to clause
(i) above). Notwithstanding the foregoing, with respect to any Demand
Registration, the priorities set forth in Section 4.4 shall control such Demand
Registration.
4.8 Piggyback Expenses. In all Piggyback Registrations, (a) the
Registration Expenses of the Holders of the Registrable Securities shall be
paid by the Company and (b) the Selling Expenses applicable to the
Registrable Securities shall be borne by the Piggyback Holders thereof in
proportion to the number of Registrable Securities sold by such Piggyback
Holder pursuant to such registration.
4.9 Holdback. Each Holder of Registrable Securities agrees, so
long as every director and officer also agrees, not to effect any public
sale or distribution of Registrable Securities, or any securities
convertible, exchangeable or exercisable for or into Registrable
Securities, during the seven days prior to, and the 90-day period beginning
on, the effective date of any underwritten offering (unless the managing
underwriters of such underwritten offering otherwise agree).
4.10 Selection of Underwriters. In connection with any
registration pursuant to Section 4.1(a), the Holders requesting such
registration may effect the
12
offer and sale of Registrable Securities pursuant to an underwritten
offering with underwriters selected by such Holders and reasonably
acceptable to the Company.
4.11 Registration Procedures. If and whenever the Company is
required by the provisions of this Agreement to use its best efforts to
effect the registration of any of the Registrable Securities under the
Securities Act, the Company shall:
(a) prepare and file with the Commission a registration
statement (the "Registration Statement") with respect to such Registrable
Securities and use commercially reasonable efforts to cause that
Registration Statement to become and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided);
(b) prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus in connection
therewith as may be necessary to keep the Registration Statement effective
until the earliest of (i) the period of time required by the Commission,
(ii) 180 days from the effective date and (iii) the sale of all Registrable
Securities covered thereby; provided that the Company may discontinue any
registration of its securities that are not Registrable Securities (and,
under the circumstances specified in Section 4.6, its securities that are
Registrable Securities) at any time prior to the effective date of such
Registration Statement;
(c) furnish to each selling Holder such reasonable number of
copies of the prospectus, including each preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as the selling Holder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Securities owned by the selling Holder;
(d) use commercially reasonable efforts to register or qualify
the Registrable Securities covered by the Registration Statement under the
securities or blue sky laws of such states as the selling Holders shall
reasonably request, and do any and all other acts that may be reasonably
necessary to enable the selling Holders to consummate the public sale or
other disposition in such states of the Registrable Securities owned by the
selling Holder; provided, however, that the Company shall not be required
in connection with this Section 4.11(d) to qualify as a foreign corporation
or execute a general consent to service of process in any jurisdiction;
(e) in connection with any underwritten offering, obtain a
comfort letter from the Company's independent public accountants who have
certified the Company's financial statements included in such Registration
Statement in customary form and covering such matters of the type
customarily covered by comfort letters and an opinion from the Company's
counsel in customary form and covering such matters of the type customarily
covered in public issuances of securities;
13
(f) notify each Holder of Registrable Securities covered by the
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event of which the Company has knowledge 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 a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. Each Holder of Registrable Securities agrees upon receipt of such
notice forthwith to cease making offers and sales of Registrable Securities
pursuant to such Registration Statement or deliveries of the prospectus
contained therein for any purpose until the Company has prepared and
furnished such amendment or supplement to the prospectus as may be
necessary so that, as thereafter delivered to purchasers of such
Registrable 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 then existing;
(g) if the offering is underwritten and at the request of any
Holders of Registrable Securities, use commercially reasonable efforts to
furnish on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration: (i) an opinion dated
such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such Holder, covering
such matters as are customarily covered in opinions of issuer's counsel
delivered to the underwriters in connection with underwritten public
offerings and (ii) a letter dated such date from the independent certified
public accountants retained by the Company, addressed to the underwriters
and to such Holder, stating that they are independent certified public
accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements of the Company
included in the Registration Statement or the prospectus, or any amendment
or supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, and such letter
shall additionally cover such other financial matters (including
information as to the period ending no more than five Business Days prior
to the date of such letter) with respect to such registration as such
underwriters reasonably may request;
(h) make available for inspection upon reasonable notice during
the Company's regular business hours by each Holder of Registrable
Securities, any underwriter participating in any distribution pursuant to
such registration statement, and any attorney, accountant or other agent
retained by such Holder or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney, accountant
or agent in connection with such Registration Statement; provided, however,
that there shall be no obligation to provide any such information unless
and
14
until any recipient of such information has executed a confidentiality
agreement in form and substance reasonably satisfactory to the Company; and
(i) provide a CUSIP number for all Registrable Securities
covered by such Registration Statement not later than the effective date of
such Registration Statement and, if applicable, provide the Company's
transfer agent with printed certificates for such Registrable Securities
which are in a form eligible for deposit with the Depositary Trust Company.
In connection with each registration hereunder, each Holder of
Registrable Shares shall (a) provide such information and execute such documents
as may reasonably be required in connection with such registration, (b) agree to
sell Registrable Shares on the basis provided in any underwriting arrangements
and (c) complete and execute all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements, which arrangements shall not be
inconsistent herewith.
4.12 Fees Generally. (a) All expenses incident to the Company's
performance of or compliance with this Article IV, including without
limitation internal expenses (including without limitation all salaries and
expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit or quarterly review, the expense
of any liability insurance, the expenses and fees for listing securities on
one or more securities exchanges, all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), printing expenses, messenger
and delivery expenses, and fees and disbursements of counsel for the
Company and all independent certified public accountants, underwriters
(excluding underwriting fees, discounts and commissions) and other Persons
retained by the Company (all such expenses being herein called
"Registration Expenses") shall be borne by the Company, except that each
Holder shall pay any underwriting fees, discounts or commissions
attributable to the sale of its Registrable Securities (all such expenses
being herein called "Selling Expenses").
(b) In connection with each Demand Registration and Piggyback
Registration, the Company shall reimburse the Requesting Holders and Piggyback
Holders, respectively, for the reasonable fees and disbursements of one counsel
selected by the Requesting Holders.
4.13 Number of Registration Requests. For the avoidance of doubt,
the rights granted pursuant to Sections 4.1 and 4.2 inure to the benefit of
the Capital Z Holders collectively on the one hand, and the Reservoir
Holders and the Rainwater Holders collectively, on the other hand.
15
ARTICLE V
INDEMNIFICATION
5.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder and the Affiliates of such Holder,
and their respective directors, officers, general and limited partners,
agents and representatives, and each other person, if any, who controls
such Holder within the meaning of the Securities Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations: (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus (but only if such statement
is not corrected in the final prospectus) contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading (but only if such omission is
not corrected in the final prospectus) or (iii) any violation or alleged
violation by the Company in connection with the registration of Registrable
Securities under the Securities Act, the Exchange Act, any state securities
law or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any state securities law (each a "Violation"); and the
Company will pay to each such Holder, Affiliate or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this Section 5.1 shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use in
connection with such registration by any such Holder or controlling person.
Each indemnified party shall furnish such information regarding itself or
the claim in question as an indemnifying party may reasonably request in
writing and as shall be reasonably required in connection with defense of
such claim and litigation resulting therefrom.
5.2 Indemnification by a Holder. To the extent permitted by law,
each selling Holder (including without limitation Piggyback Holders) will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, any
underwriter, any other Holder selling securities in such registration
statement and any controlling person of any such underwriter or other
Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject, under
the Securities Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages or
16
liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent that such Violation occurs in
reliance upon and in conformity with written information furnished (and not
subsequently corrected prior to the Company's request that the registration
statement be declared effective) by such Holder expressly for use in
connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person
intended to be indemnified pursuant to this Section 5.2 in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 5.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without
the consent of such Holder, which consent shall not be unreasonably
withheld; provided that in no event shall any indemnity under this Section
5.2 exceed the net proceeds from the offering received by such Holder.
5.3 Contribution by Indemnifying Party. (a) If the
indemnification provided for in this Article V from the indemnifying party
is unavailable to an indemnified party hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(b) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.3 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
5.4 Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 5.4 of notice of the commencement of
any action (including any governmental action), such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 5.4, deliver to
17
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties. The failure to deliver
written notice to the indemnifying party within a reasonable time after the
commencement of any such action, if materially prejudicial to its ability
to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5.4 to the extent of
such prejudice, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 5.4. The
indemnified party shall have the right, but not the obligation, to
participate in the defense of any action referred to above through counsel
of its own choosing and shall have the right, but not the obligation, to
assert any and all separate defenses, cross claims or counterclaims which
it may have, and the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of such counsel
has been specifically authorized in advance by the indemnifying party, (ii)
there is a conflict of interest that prevents counsel for the indemnifying
party from adequately representing the interests of the indemnified party
or there are defenses available to the indemnified party that are different
from, or additional to, the defenses that are available to the indemnifying
party, (iii) the indemnifying party does not employ counsel that is
reasonably satisfactory to the indemnified party within a reasonable period
of time or (iv) the indemnifying party fails to assume the defense or does
not reasonably contest such action in good faith, in which case, if the
indemnified party notifies the indemnifying party that it elects to employ
separate counsel, the indemnifying party shall not have the right to assume
the defense of such action on behalf of the indemnified party and the
reasonable fees and expenses of such separate counsel shall be borne by the
indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm (in addition to one firm acting as local counsel) for all
indemnified parties.
5.5 Underwriting Agreement. Notwithstanding the foregoing, to
the extent that the provisions on indemnification and contribution
contained in the underwriting agreement (if any) entered into in connection
with any underwritten public offering of the Registrable Securities are in
conflict with the foregoing provisions, the provisions in such underwriting
agreement shall control.
5.6 Financial Assistance. The Company shall have no obligation
under the provisions of Article IV and V unless and until the requirements
of any of the exclusions or exemptions applicable to the provisions of
Section 39 of the Companies Act of 1981 in Bermuda, as amended, are
satisfied so as to provide compliance with that section. Each Holder shall
waive or may approve, where formal meetings or written resolutions of
shareholders or other action may be appropriate to waive or approve, the
financial assistance as described in Section 39 and related
18
provisions. The provisions of Article V and VI hereof shall be subject to
this Article 5.6.
ARTICLE VI
MISCELLANEOUS
6.1 Specific Performance. In the event of a breach by any party
to this Investment Agreement of its obligations under this Investment
Agreement, any party injured by such breach, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Investment
Agreement. The parties agree that the provisions of this Investment
Agreement shall be specifically enforceable, it being agreed by the parties
that the remedy at law, including monetary damages, for breach of any such
provision will be inadequate compensation for any loss and that any defense
in any action for specific performance that a remedy at law would be
adequate is waived.
6.2 Amendments. This Agreement may be amended, supplemented or
modified only by a written agreement signed by the Company, the Required
Capital Z Holders, the Required Reservoir Holders and the Required
Rainwater Holders.
6.3 Successors and Assigns. This Investment Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns of the parties hereto;
provided, however, that the benefits of this Investment Agreement shall
inure to and be enforceable by any transferee of Registrable Securities
only if such transferee shall have executed a Joinder Agreement.
6.4 Notices. (a) All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given if
delivered personally against written receipt or by facsimile transmission
against facsimile confirmation or mailed by prepaid first class certified
mail, return receipt requested or mailed by nationally recognized overnight
courier prepaid, to the parties at the following addresses or facsimile
numbers:
If to any Capital Z Holder, to:
Capital Z Financial Services Fund II, L.P.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
19
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
If to any Reservoir Holder, to:
Reservoir Capital Partners, L.P.
c/o Reservoir Capital Group, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
with a copy to:
Reservoir Capital Partners, L.P.
c/o Reservoir Capital Group, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
with a second copy to:
Reservoir Capital Partners, L.P.
c/o Reservoir Capital Group, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to any Rainwater Holder:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
20
with a copy to:
▇▇▇▇▇▇▇▇ & Knight L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Company, to:
PXRE Group Ltd.
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
(b) All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section 6.4, be deemed
given upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided in this Section 6.4, be deemed given upon facsimile
confirmation, and (iii) if delivered by mail in the manner described above to
the address as provided in this Section 6.4, be deemed given on the earlier of
the third Business Day following mailing or upon receipt and (iv) if delivered
by overnight courier to the address as provided in this Section 6.4, be deemed
given on the earlier of the first Business Day following the date sent by such
nationally recognized overnight courier or upon receipt. Any party hereto may
from time to time change its address, facsimile number or other information for
the purpose of notices to such party by giving notice specifying such change to
the other parties hereto.
6.5 Rule 144. So long as Company is subject to the reporting
requirements under the Exchange Act, it shall comply with such requirements
so as to permit sales of Registrable Securities by the holders thereof
pursuant to Rule 144 under the Securities Act.
6.6 Headings; Certain Conventions. The headings used in this
Investment Agreement are for convenience of reference only and shall not
define or limit the provisions hereof.
6.7 Invalid Provisions. If any provision of this Investment
Agreement is held to be illegal, invalid or unenforceable under any present
or future law, and if
21
the rights or obligations of any party hereto under this Investment
Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Investment Agreement will be
construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions
of this Investment Agreement will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable provision or by
its severance therefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of
this Investment Agreement a legal, valid and enforceable provision as
similar in terms to such illegal, invalid or unenforceable provision as may
be possible.
6.8 Governing Law. This Investment Agreement shall be governed
by and construed in accordance with the domestic laws of the State of New
York, without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
State of New York.
6.9 Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES),
THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE
OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT, THE OPERATIVE
AGREEMENTS OR ANY DOCUMENTS RELATED HERETO.
6.10 Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state courts of the State of New York located
in New York County and the United States Federal District Court of the
Southern District of New York for the purpose of any suit, action or other
proceeding arising out of or based upon this Agreement or the subject
matter hereof and agrees that any such action, suit or proceeding shall be
brought only in such court (and waives any objection based on forum non
conveniens or any other objection to venue therein); provided however, that
such consent to jurisdiction is solely for the purpose referred to in this
Section 6.10 and shall not be deemed to be a general submission to the
jurisdiction of said Courts other than for such purpose.
6.11 Counterparts. This Investment Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but
all of which together will constitute one and the same instrument.
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6.12 Entire Agreement. This Investment Agreement supersedes all
prior discussions and agreements between the parties with respect to the
subject matter hereof and contains the sole and entire agreement among the
parties hereto with respect to the subject matter hereof, and in the event
of any conflict between this Agreement and the Bye-Laws of the Company,
this Agreement shall govern.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Investment Agreement
as of the date first written above.
PXRE GROUP LTD.
By:
---------------------------------------
Name:
Title:
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.
By: Capital Z Partners, L.P.,
its general partner
By: Capital Z Partners, Ltd.,
its general partner
By:
---------------------------------------
Name:
Title:
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND
II, L.P.
By: Capital Z Partners, L.P.,
its general partner
By: Capital Z Partners, Ltd.,
its general partner
By:
---------------------------------------
Name:
Title:
RESERVOIR CAPITAL PARTNERS, L.P.
By: Reservoir Capital Group, L.L.C.,
its sole general partner
By:
------------------------------------
Name:
Title:
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RESERVOIR CAPITAL MASTER FUND, L.P.
By: Reservoir Capital Group, L.L.C.,
its sole general partner
By:
------------------------------------
Name:
Title:
------------------------------
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