Contract
Exhibit
4.1
Execution
Copy
NEITHER
THIS WARRANT NOR THE COMMON SHARES OF FLAGSTONE REINSURANCE HOLDINGS LIMITED
(THE “COMPANY”) ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. THE REGISTERED HOLDER OF THIS WARRANT HAS
AGREED THAT IT WILL NOT SELL, PLEDGE OR OTHERWISE TRANSFER THIS WARRANT EXCEPT
TO AFFILIATES AND THAT NO SALE, PLEDGE OR OTHER TRANSFER OF THE COMMON
SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE MADE WITHOUT REGISTRATION UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS THE HOLDER SHALL DELIVER TO
THE COMPANY AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO IT TO THE EFFECT THAT NO SUCH REGISTRATION IS REQUIRED.
IN
ADDITION, ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE HEREOF IS RESTRICTED BY,
AND THE RIGHTS ATTACHING TO THESE SECURITIES ARE SUBJECT TO, THE TERMS AND
CONDITIONS CONTAINED HEREIN AND IN THE MEMORANDUM OF ASSOCIATION AND BYELAWS OF
THE COMPANY AND THE SHAREHOLDERS’ AGREEMENT, AS THEY MAY BE AMENDED FROM TIME TO
TIME, WHICH ARE AVAILABLE FOR EXAMINATION AT THE REGISTERED OFFICE OF THE
COMPANY.
FLAGSTONE
REINSURANCE HOLDINGS LIMITED
AMENDED AND RESTATED
AMENDED AND RESTATED
COMMON
SHARE PURCHASE WARRANT
Warrant
No. 001
This
certifies that, for value received,
Haverford
(Bermuda) Ltd.
or its
permitted assigns, are entitled, subject to the terms and conditions hereinafter
set forth, to purchase the number of common shares, par value $0.01 per share
(the “Shares”), of Flagstone Reinsurance Holdings Limited, an exempted company
incorporated under the laws of Bermuda (the “Company”), set forth herein for the
purchase price per Share equal to the Exercise Price (as defined
herein).
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Upon
delivery of this amended and restated warrant (this “Warrant”) with the Purchase
Form attached hereto duly executed, together with payment of the Exercise Price
for the Shares thereby purchased, at the registered office of the Company or at
such other address as the Company may designate by notice in writing to the
registered holder hereof (the “Holder”), the Holder shall be entitled to be
registered on the Register of Members of the Company as the holder of the Shares
so purchased and to receive a Share certificate or Share certificates for the
Shares so purchased. All Shares issued upon the exercise of this
Warrant will, upon issuance, be fully paid and nonassessable and free from all
taxes, liens and charges with respect thereto.
This
Warrant is subject to the following terms and conditions:
Section
1. Underlying Shares; Exercise Price
1.1 Number of
Shares. Subject to adjustment in accordance with the
provisions of Section 8 hereof, this Warrant shall be exercisable for 8,585,747
Common Shares.
1.2 Exercise
Price. Subject to adjustment in accordance with the provisions
of Section 8 hereof, this Warrant shall be exercisable for a price of $14.80 per
Share.
1.3 Legend. The Shares
issuable upon exercise of the Warrant shall be in such form, and shall include
such legends and restrictions on transfer, as the Company shall deem necessary
or appropriate at the time of exercise in order to comply with the Company’s
Memorandum of Association and Bye-Laws, the Shareholders’ Agreement of the
Company dated as of December 20, 2005 as amended from time to time (the
“Shareholders’ Agreement”), and applicable law and regulation.
Section
2. Term of Warrant; Conditions on Exercise
2.1 Term. Subject to
the terms of this Warrant, the Holder shall have the right, at any time
during the period (such period, the “Term”) commencing on December 1,
2013 and ending at 5:00 p.m., New York time, on 31 December 2013 (the
“Termination Date”), to purchase from the Company the number of fully paid and
nonassessable Shares to which the Holder may at the time be entitled to purchase
pursuant to this Warrant, upon surrender, to the Company at its registered
office, of this Warrant certificate, together with the Purchase Form attached
hereto duly completed and signed, and upon payment to the Company of the
Exercise Price for the number of Shares in respect of which this Warrant is then
being exercised. Payment of the aggregate Exercise Price shall be
made on the date of exercise in cash, or by certified or cashier's check, or a
combination thereof. This Warrant shall terminate and expire to the
extent not fully exercised on or prior to the Termination Date.
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Section 3. Exercise of Warrant
3.1 Exercise. Upon
surrender of this Warrant and payment of the Exercise Price, and (if the Holder
shall not already be a party thereto) execution by the Holder of the
Shareholders’ Agreement , the Company shall cause the issue of the Shares to be
registered in the Register of Members of the Company and shall issue and cause
to be delivered with all reasonable dispatch, to or upon the written order of
the Holder and (subject to the restrictive legends on the first page of this
Warrant) in such name or names as the Holder may designate, a certificate or
certificates for the number of full Shares so purchased upon the exercise of
this Warrant, together with cash, as provided in Section 10 hereof, in respect
of any fractional Shares otherwise issuable upon such surrender. The
rights of purchase represented by this Warrant shall be exercisable, at the
election of the Holder, either in full or from time to time in part and, in the
event that this Warrant is exercised in respect of fewer than all of the Shares
at any time prior to the date of expiration of this Warrant, a new Warrant
certificate to purchase the remaining Shares will be issued.
Section
4. Transferability and Form of Warrant
4.1. Registration. This
Warrant is numbered and registered in the books of the Company. The
Company shall be entitled to treat the Holder as the sole owner of this Warrant
for all purposes and shall not be bound to recognize any equitable or other
claim to or interest in this Warrant on the part of any other person, and shall
not be liable for any registration of transfer of this Warrant which is to be
registered in the name of a fiduciary or the nominee of a fiduciary unless made
with actual knowledge that a fiduciary or nominee is committing a breach of
trust in requesting such registration of transfer.
4.2. Transfer. This
Warrant shall not be transferable by the Holder other than to an Affiliate (as
such term is defined in the Company’s Bye-laws). In addition, this
Warrant shall be transferable only in the books of the Company maintained at its
registered office and subject to the restrictive legends on the first page of
this Warrant and to the Memorandum of Association and Bye-Laws of the Company,
upon delivery of this Warrant either duly endorsed by the Holder or by the
Holder's duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment, or authority to transfer. In all
cases of transfer by an attorney, the original letter of attorney, duly
approved, or an official copy thereof, duly certified, shall be deposited and
remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Company in its discretion. Upon any
registration of transfer, the Company shall execute and deliver a new Warrant to
the person entitled thereto.
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Section
5. Payment of Taxes
The
Company will pay all documentary stamp duties and taxes, if any, attributable to
the initial issuance of Shares upon the exercise of this Warrant; provided that
the Company shall not be required to pay any tax or taxes which may be payable
in respect of any transfer involved in such issuance.
Section 6. Mutilated or
Missing Warrant
In case
the certificate evidencing this Warrant shall be mutilated, lost, stolen or
destroyed, the Company may, in its discretion, issue and deliver in exchange and
substitution for and upon cancellation of this certificate if it is mutilated,
or in lieu of and substitution for this certificate if it is lost, stolen or
destroyed, a new Warrant certificate of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of this Warrant and indemnity, if
requested, also satisfactory to the Company. Applicants for such
substitute Warrant certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may
prescribe.
Section
7. Purchase by the Company
The
Company shall have the right, except as limited by law, other agreements or
herein, to purchase or otherwise acquire this Warrant at such times, in such
manner and for such consideration as it may deem appropriate and as shall be
agreed with the Holder of this Warrant in its sole discretion.
Section
8. Adjustment of Exercise Price and Number of Shares
8.1 Adjustments. The
Exercise Price and the number and kind of Shares purchasable upon the exercise
of this Warrant shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
(a) In
case the Company shall (i) pay a dividend in Shares or make a distribution in
Shares, (ii) subdivide its issued Shares, (iii) consolidate its issued
Shares into a smaller number of Shares or (iv) issue by reclassification of
its Shares other securities of the Company, the number of Shares or other
securities of the Company purchasable upon exercise of this Warrant shall be
adjusted so that upon exercise of this Warrant the Holder of this Warrant shall
be entitled to receive the kind and number of Shares or other securities of the
Company which he would have owned or have been entitled to receive immediately
following any such event had he fully exercised this Warrant immediately prior
to any such event or any record date with respect thereto. An
adjustment made pursuant to this paragraph (a) shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
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(b) In
case the Company shall issue rights, options or warrants to all or substantially
all holders of its Shares, without any charge to such holders, entitling them to
subscribe for or purchase Shares at a price per share which is lower at the
record date mentioned below than the then current book value of the Company as
determined in accordance with the Company’s Memorandum of Association and
Bye-Laws (“Book Value”) per Common Share, the number of Shares thereafter
purchasable upon the exercise of this Warrant immediately prior thereto shall be
adjusted so that upon exercise of this Warrant the Holder of this Warrant shall
be entitled to receive the number of Shares determined by multiplying the number
of Shares theretofore purchasable upon exercise of this Warrant by a fraction,
of which the numerator shall be the number of Shares outstanding on the date of
issuance of such rights, options or warrants plus the number of additional
Shares offered for subscription or purchase, and of which the denominator shall
be the number of Shares outstanding on the date of issuance of such rights,
options or warrants plus the number of Shares which the aggregate offering price
of the total number of Shares so offered would purchase at such Book
Value. Such adjustment shall be made whenever such rights, options or
warrants are issued, and shall become effective retroactively immediately after
the record date for the determination of shareholders entitled to receive such
rights, options or warrants.
(c) In
case the Company shall distribute to all or substantially all holders of its
Shares evidences of its indebtedness or assets (excluding cash dividends or
distributions out of earnings) or rights, options or warrants or convertible
securities containing the right to subscribe for or purchase Shares (excluding
those referred to in paragraph (b) above), then in each such case the number of
Shares purchasable upon the exercise of this Warrant immediately prior thereto
shall be adjusted so that upon exercise of this Warrant the Holder of this
Warrant shall be entitled to receive, for the same aggregate exercise price, the
number of Shares determined by multiplying the number of Shares theretofore
purchasable upon exercise of this Warrant by a fraction, of which the numerator
shall be the then current Book Value of the Company on the date of such
distribution, and of which the denominator shall be such current Book Value of
the Company, less the then fair value (as determined by the Board of Directors
of the Company, whose determination shall be conclusive) of the assets or
evidences of indebtedness so distributed or of such subscription rights, options
or warrants, or of such convertible securities applicable. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
the determination of shareholders entitled to receive such
distribution.
(d) No
adjustment in the number of Shares purchasable hereunder shall be required
unless such adjustment would require an increase or decrease of at least 1
percent in the number of Shares purchasable upon the exercise of this Warrant;
provided that any adjustments which by reason of this paragraph (d) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
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(e) Whenever
the number of Shares purchasable upon the exercise of this Warrant is adjusted
as herein provided, the Exercise Price per Share payable upon exercise of this
Warrant shall be adjusted by multiplying such Exercise Price immediately prior
to such adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of this Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Shares so
purchasable immediately thereafter.
(f) When
the number of Shares purchasable upon the exercise of this Warrant or the
Exercise Price is adjusted as herein provided, the Company shall promptly mail
to the Holder by first class mail, postage prepaid, notice of such adjustment or
adjustments setting forth the number of Shares purchasable upon the exercise of
this Warrant and the Exercise Price of such Shares after such adjustment, a
brief statement of the facts requiring such adjustment and the computation by
which such adjustment was made.
(g) For
the purpose of this subsection 8.1, the term “Shares” shall mean (i) the
class of shares designated as the Shares of the Company on the date of this
Warrant, or (ii) any other class of shares resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value. In the event that at any time, as a result of an adjustment
made pursuant to this subsection 8.1, the Holder shall become entitled to
purchase any shares of the Company other than Shares, thereafter the number of
such other shares so purchasable upon exercise of this Warrant, and the Exercise
Price of such shares, shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Shares contained in paragraphs (a) through (f), inclusive, above,
and the provisions of Sections 2 and 3 and subsections 8.2 through 8.4,
inclusive, with respect to the shares shall apply on like terms to any such
other shares.
(h) Upon
the expiration of any rights, options, warrants or conversion privileges, if any
thereof shall not have been exercised, the number of shares purchasable upon
exercise of this Warrant and payment of the Exercise Price, to the extent this
Warrant shall not then have been exercised, shall, upon such expiration, be
readjusted and shall thereafter be such as they would have been had it been
originally adjusted (or had the original adjustment not been required, as the
case may be) on the basis of (1) the only Shares so issued were the Shares,
if any, actually issued or sold upon the exercise of such rights, options,
warrants or conversion rights and (2) such Shares, if any, were issued or sold
for the consideration actually received by the Company for the issuance, sale or
grant of all of such rights, options, warrants or conversion rights, whether or
not exercised; provided that no such readjustment shall have the effect of
increasing the Exercise Price by an amount in excess of the amount of the
adjustment initially made in respect of the issuance, sale or grant of such
rights, options, warrants or convertible rights.
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8.2. Adjustment for Cash
Dividends. In case the Company shall pay a dividend in cash or
make a distribution in cash, the Exercise Price per Share payable upon exercise
of this Warrant shall be adjusted and reduced by the amount of such dividend
payment. This section shall be effective as of the date this Warrant
was first issued. .
8.3. No Adjustment in
Certain Cases. No adjustments shall be made pursuant to this
Section 8, in connection with the issuance of any Shares (or securities
convertible into Shares) as consideration for the acquisition by the
Company of assets or equity interests in any business entity.
8.4. Preservation of
Purchase Rights upon Reclassification, Consolidation, etc. In
case of any consolidation of the Company with or amalgamation or merger of the
Company into another legal entity or in case of any sale or conveyance to
another legal entity of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing entity, as the case may be, shall execute an agreement with the
Holder that the Holder shall have the right thereafter upon payment of the
Exercise Price in effect immediately prior to such action to purchase upon
exercise of this Warrant the kind and amount of Shares and other securities and
property which he would have owned or have been entitled to receive after the
happening of such consolidation, amalgamation, merger, sale or conveyance had
this Warrant been exercised immediately prior to such action. Such
agreement shall provide for adjustments, which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section
8. The Company shall mail an executed copy of any such agreement by
first class mail, postage prepaid, to the Holder. The provisions of
this subsection 8.4 shall similarly apply to successive consolidations, mergers,
sales, or conveyances.
Section
9. Fractional Interests
The
Company shall not be required to issue fractional Shares on the exercise of this
Warrant. If any fraction of a Share would, except for the provisions
of this Section 9, be issuable on the exercise of this Warrant (or specified
portion thereof), the Company shall pay an amount in cash equal to the then
current net asset value per Share multiplied by such fraction.
Section
10. No Right to Vote as Shareholders; Notices to Holder
Nothing
contained in this Warrant shall be construed as conferring upon the Holder or
the Holder’s transferees the right to vote or to consent or to receive notice as
shareholders in respect of any meeting of shareholders for the election of
directors of the Company or any other matter, or any rights whatsoever as
shareholders of the Company. If, however, at any time prior to the
expiration of this Warrant and prior to its exercise, any of the following
events shall occur:
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(a)
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any
action which would require an adjustment pursuant to subsections 8.1 or
8.4, or
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(b)
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a
dissolution, liquidation, or winding up of the Company (other than in
connection with a consolidation, amalgamation, merger, or sale of all or
substantially all of its property, assets, and business as an entirety)
shall be proposed;
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the
Company shall in each such case give notice in writing of such event to the
Holder as provided in Section 11 hereof. Failure to publish or mail
such notice or any defect therein or in the publication or mailing thereof shall
not affect the validity of any such action.
Section
11. Notices
(a) Any
notice to the Company pursuant to this Warrant shall be in writing and shall be
deemed to have been duly given if delivered or mailed certified mail, return
receipt requested, to the Company at 00 Xxxxxx Xxxxxx Xxxxx 000 Xxxxxxxx,
Xxxxxxx XX00, and to Haverford (Bermuda) Ltd., Suite 224, 12 Church Street,
Xxxxxxxx, Bermuda, Attn: Xxxxxxx Xxxxxx. The Company may from time to time
change the address to which such notices are to be delivered or mailed hereunder
by notice to the Holder in accordance with paragraph (b) below.
(b) Any
notice pursuant to this Warrant by the Company to the Holder shall be in writing
and shall be deemed to have been duly given upon receipt by the Holder, if
mailed, or upon confirmation of delivery at the Holder’s address, in the books
of the Company if sent by courier.
Section
12. Supplements and Amendments
The
Company may from time to time supplement or amend this Warrant, without the
approval of the Holder, in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company may deem necessary or
desirable and which shall not be inconsistent with the provisions of this
Warrant and which shall not adversely affect the interest of the
Holder. Any other amendment to this Warrant may be made only by a
written instrument executed by the Company and the Holder.
Section
13. Successors
All the
covenants and provisions of this Warrant by or for the benefit of the Company or
the Holder shall bind and inure to the benefit of their respective successors
and permitted assigns hereunder.
Section
14. Applicable Law
This
Warrant shall be deemed to be a contract made under the laws of Bermuda and for
all purposes shall be construed in accordance with the laws
thereof.
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IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed as a
deed by its Director.
Date: 23
February, 2006
| Executed as a deed by | |
| FLAGSTONE REINSURANCE HOLDINGS LIMITED | |
| [Affix Seal] | |
| By: /s/ Xxxxxxx Xxxxxxx | |
| Name: Xxxxxxx Xxxxxxx | |
| Title: General Counsel |
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ATTEST:
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/s/
Xxxxx Xxxxx
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Name:
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Xxxxx
Xxxxx
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Title:
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Director,
Haverford (Bermuda) Ltd.
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FLAGSTONE
REINSURANCE HOLDINGS LIMITED
AMENDED
AND RESTATED
COMMON
SHARE PURCHASE WARRANT
PURCHASE
FORM
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
______________ shares (the “Shares”) provided for therein, and requests that
certificates for the Shares be issued in the name of:
(Please Print or Type Name, Address
and Social Security Number)
_____________________________________________
_____________________________________________
_____________________________________________
and, if
said number of Shares shall not be all the Shares purchasable hereunder, that a
new Warrant Certificate for the balance of the unpurchased Shares be registered
in the name of the undersigned Warrantholder as below indicated and delivered to
the address stated below:
(Please
Print)
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Dated: __________________________________________________
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Name of
Warrantholder:_____________________________________
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Address: ________________________________________________
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________________________________________________
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Signature:________________________________________________
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Note:
The above
signature must correspond with the name as written upon the face of this Warrant
Certificate in every particular, without alteration or enlargement or any change
whatever.
Signature
Guaranteed:_________________________________________
(Signature
must be guaranteed by a bank or trust company having an office or correspondent
in the United States or by a member firm of a registered securities exchange or
the National Association of Securities Dealers,
Inc.)
