EXHIBIT 3
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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
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TABLE OF CONTENTS
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PAGE
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.
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"Demand Registration" means any Long-Form Registration or
Short-Form Registration requested in accordance with Section 4.1(a).
"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.
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"Investment Agreement" has the meaning set forth in the
forepart hereof.
"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
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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) 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.
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"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.
"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.
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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 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,
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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 (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;
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(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) 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
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so requested to be included therein and (y) all other Registrable Securities to
be included pursuant to this Article IV.
(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
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Registrations whenever the Company is qualified to use Form S-3 or any similar
short form registration statement. The Company shall 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 offer and sale of Registrable Securities pursuant to
an underwritten offering with underwriters selected by such Holders and
reasonably acceptable to the Company.
12
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;
(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
13
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 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.
14
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.
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:
15
(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 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
16
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 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
17
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 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
18
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
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: ▇▇▇▇▇ ▇▇▇▇
19
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.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & Knight L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Company, to:
PXRE Group Ltd.
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
20
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 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.
21
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.
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]
22
IN WITNESS WHEREOF, the parties have executed this Investment
Agreement as of the date first written above.
PXRE GROUP LTD.
By:
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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:
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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:
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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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