EXHIBIT 1.4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, (this "Agreement"), dated as of March 13,
1996, among the Rightholders (as such term and certain other capitalized terms
not otherwise defined herein are defined in Article II hereof) and IPC HOLDINGS,
LTD., a company incorporated under the laws of Bermuda (the "Company").
W I T N E S S E T H
WHEREAS, each of the Rightholders are parties to the Shareholders'
Agreement, dated as of June 29, 1993 (the "Shareholders' Agreement"), among the
Company and its shareholders specified therein, relating to the Voting Common
Stock, par value U.S.$200 per share, and the Non-Voting Common Stock, par value
U.S.$200 per share, of the Company (together "Common Stock");
WHEREAS, pursuant to a recapitalization of the Company, each outstanding
share of Common Stock shall be converted into 25,000 Common Shares, par value
U.S.$.01 per share, of the Company ("Common Shares");
WHEREAS, the Company will permit its shareholders so electing to effect
an initial public offering of certain Common Shares pursuant to a Registration
Statement on Form S-1 (File No. 333-00088) (the "IPO");
WHEREAS, the Company has agreed to provide certain registration rights
to the Rightholders following the IPO and the Company and the Rightholders are
entering into this Agreement to set forth the terms and conditions applicable to
the grant and exercise of such registration rights;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged by the parties hereto, the Company and the
Rightholders hereby agree as follows:
ARTICLE I
REGISTRATION RIGHTS
1.1. DEMAND RIGHTS. (a) At any time on and after the 180th day following
the date of the prospectus relating to the IPO (the "IPO Lock-Up Date") (unless
the Company consents to an earlier date), each Rightholder shall have the right
on one occasion or, in the case of AIG, on two occasions, to require the Company
to file a registration statement on Form X-0, X-0 or S-3 (or Form F-1, F-2 or
F-3) under the Securities Act for a public offering of all or any number of the
Registrable Shares held by its Rightholder Group or, in the case of AIG, for any
number of Registrable Option Shares, by delivering to the Company written notice
stating that such right is being exercised, naming the members of its
Rightholder Group whose Registrable Shares are to be included in such
registration (collectively, the "Demanding Shareholders"), specifying the number
of each such Demanding Shareholder's Registrable Shares or Registrable Option
Shares to be included in such registration and describing the intended method of
distribution thereof (a "Demand Request"); provided, however, in the event the
AIG Option becomes exercisable prior to the IPO Lock-Up Date, AIG may of right
demand one registration at such time for any number of Registrable Option Shares
either (i) in connection with the merger or consolidation of the Company out of
existence or the sale or lease of substantially all of the assets of the Company
or (ii) if necessary, in the judgment of AIG, to comply with its obligation to
dispose of any shares obtained pursuant to exercise of the AIG Option that would
result in AIG becoming a "United States 25% Shareholder" as defined in the AIG
Option (an "Inter Lock-Up AIG Request"). Two or more Rightholders may join
together in making a joint Demand Request. The Company shall give prompt written
notice of a Demand Request (a "Notice of Demand Request") to each Rightholder
that is not making the Demand Request. Other than with respect to an Inter
Lock-Up AIG Request, each such other Rightholder shall have the right to require
that all or any number of the Registrable
Shares or Registrable Option Shares held by its Rightholder Group be included in
such registration, by delivering to the Company a written notice stating that
such right is being exercised, naming the members of its Rightholder Group whose
Registrable Shares or Registrable Option Shares are to be included in such
registration (collectively, the "Joining Shareholders") and specifying the
number of each such Joining Shareholder's Registrable Shares or Registrable
Option Shares to be included in such Registration Statement (a "Joining
Request"). To be effective, a Joining Request must be given on or before the
fifteenth (15th) day after the Notice of Demand Request is given by the Company.
In the event that AIG delivers a Demand Request or a Joining Request with
respect to Registrable Option Shares, such Demand Request or Joining Request
shall, in addition to the matters set forth above, indicate AIG's intention to
exercise the AIG Option and the number of Registrable Option Shares to be
purchased upon such exercise and to be included in the registration to which
such request relates; provided, however, that the exercise of the AIG Option
shall be effective only immediately prior to, and contingent upon, the closing
of the public offering to which the requested registration relates. Upon receipt
of a Demand Request, the Company shall use its reasonable efforts to effect the
registration under the Securities Act of the Registrable Shares or Registrable
Option Shares included in the Demand Request and the Registrable Shares or
Registrable Option Shares included in any Joining Request, all to the extent
necessary to permit the Demanding Shareholders and the Joining Shareholders
(collectively, the "Sellers") to sell or otherwise dispose of their respective
Registrable Shares or Registrable Option Shares included in the registration in
accordance with the intended method of distribution. The rights and obligations
of the parties listed under this Section 1.1(a) are subject to the other
provisions of this Agreement.
(b) The Company's obligations pursuant to Section 1.1(a) above are
subject to the following limitations and conditions:
(i) the Company shall not be obligated to fulfill a Demand
Request unless the aggregate number of Registrable Shares and
Registrable Option Shares to be included in such registration pursuant
to any Demand Request equals or exceeds 2,500,000 Common Shares;
provided, however, the Company shall be obligated to fulfill, in
aggregate, one Demand Request submitted by one or more Over-allotment
Remaining Shareholders provided the number of Registrable Shares to be
included in such registration pursuant to such Demand Request equals or
exceeds 500,000 Common Shares;
(ii) the Company will, if requested, use reasonable efforts to
participate in and assist with a "road show" and other customary
marketing efforts in connection with the sale of Registrable Shares or
Registrable Option Shares pursuant to such registration, at such times
and in such manner as the Company and the Rightholders making such
Demand Request and any related Joining Request mutually may determine
(and as do not unreasonably interfere with the Company's operations);
(iii) the Company shall not be obligated to fulfill a Demand
Request made by a Rightholder (other than AIG) if such Rightholder has
made a prior Demand Request and either (A) the Company has filed a
Securities Act registration covering Registrable Shares or Registrable
Option Shares pursuant to such Demand Request, such registration was
declared or ordered effective, such effectiveness was not suspended or
stopped by any governmental or judicial authority and such Demand
Request was not withdrawn pursuant to Section 1.1(d) below; or (B) such
Demand Request was withdrawn other than pursuant to Section 1.1(d); the
Company shall not be obligated to fulfill a Demand Request made by AIG
if AIG has made two prior Demand Requests to which either clause (A) or
(B) above is applicable;
(iv) the Common Shares to be offered in a public offering
pursuant to any Demand Request and related Joining Request shall not
exceed the number which the managing underwriter for the offering (or,
if there is none, a nationally recognized investment banking firm acting
as financial advisor to the Company) determines in good faith to be
appropriate based on market conditions and other relevant factors,
including pricing (the "Maximum Number"), and Common Shares shall be
allocated to give effect to this clause (iv) as provided in Section 1.3.
(v) the Company shall not be obligated to fulfill the
requirements herein with regard to any registration relating to a Demand
Request (A) during any period of time (not to exceed ninety (90)
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days in the aggregate during any period of twelve (12) consecutive
months) after the Company has determined to proceed with a Securities
Act registration of any of its securities and is diligently proceeding
to complete such registration or any offering of securities pursuant
thereto (whether for its own account or that of any shareholder but
excluding any registration on Form S-8 under the Securities Act or any
similar or successor form) if, in the judgment of a nationally
recognized investment banking firm (which may be acting as managing
underwriter for any such offering or as financial advisor to the
Company), the fulfillment of such requirements or such filing would have
an adverse effect on the offering, (B) during any period of time (not to
exceed ninety (90) days during any period of twelve (12) consecutive
months) when the Company is in possession of material, non-public
information that the Company would not be required to disclose publicly
in the absence of any Securities Act registration of its securities, (C)
during any period of time (not to exceed ninety (90) days during any
period of twelve (12) consecutive months) when the Company is engaged
in, or has determined to engage in and is proceeding diligently with,
any program for the purchase of, or any tender offer or exchange offer
for, its Capital Securities, and determines, on advice of independent
U.S. counsel, that such program or offer and the requested registration
may not proceed concurrently without violating Rule 10b-6 under the
Exchange Act or (D) during the 180-day period following (1) the
effectiveness of any Securities Act registration covering Capital
Securities (but excluding any registration on Form S-8 under the
Securities Act or any similar or successor form) or (2) the termination
of the Company's efforts to effect a Securities Act registration
pursuant to a prior Demand Request, if such termination was not due to
any fault of the Company;
(vi) the Company shall not be required to maintain the
effectiveness of a registration statement filed pursuant to Section
1.1(a) for a period in excess of 90 consecutive days and shall not be
required to file or maintain any registration statement that permits a
delayed or continuous offering to be made for more than 30 consecutive
days after such registration statement becomes effective;
(vii) the managing underwriter of any public offering effected
pursuant to this Article I shall agree to use its best efforts to avoid
selling Registrable Shares or Registrable Option Shares to any one
person or group of related persons (other than another dealer acting as
an underwriter or member of any selling group in connection with such
public offering) if, as a result of such sale, any such person would
become a United States 10% Shareholder or any such person would become a
United States 25% Shareholder; and
(viii) the Rightholder(s) making the Demand Request and any
Joining Shareholders, following agreement amongst themselves, shall be
entitled to designate any one lawful method of distribution permitted
pursuant to the registration statement (including a firm commitment
underwriting) to be the method of distribution for the registration
pursuant to this Section 1.1, and all Sellers will sell their
Registrable Shares or Registrable Option Shares included in the
registration in the designated method (and, in the case of any
underwriting, on the same terms and conditions); the intended method of
distribution shall be indicated in the Demand Request and, following
agreement amongst the Rightholder(s) making the Demand Request and any
Joining Shareholders, shall be finally determined prior to filing the
registration statement; the method of distribution and the terms and
conditions thereof shall be subject to the Company's prior approval,
which will not be unreasonably withheld, and in any distribution
involving an underwriter, the Rightholder(s) making the Demand Request
and any Joining Shareholders, following agreement amongst themselves,
shall be entitled (after consulting with the Company and with the
Company's approval, which will not be unreasonably withheld) to select
any nationally recognized investment banking firm to act as underwriter.
(c) Subject to Section 1.3, the Company may elect to include in any
registration statement filed pursuant to this Section 1.1 any Common Shares to
be issued by it or held by any of its subsidiaries or by any other shareholders
only to the extent such shares are offered and sold pursuant to, and on the
terms and subject to the conditions of, any underwriting agreement or
distribution arrangements entered into or effected by the Demanding
Shareholders.
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(d) A Rightholder may withdraw a Demand Request if (i) the Company is in
material breach of its obligation hereunder and has not cured such breach after
having received notice thereof and a reasonable opportunity to do so or (ii) the
withdrawal occurs during a period specified in Section 1.1(b)(v). A Demand
Request withdrawn pursuant to this Section 1.1(d) shall be deemed not to have
been made for purposes of Section 1.1 and, together with any related Joining
Request, shall be of no further effect.
1.2. "PIGGY-BACK" RIGHTS. If at any time the Company proposes to
register, for its own account or for the account of any shareholder, any Common
Shares on a registration statement on Form X-0, X-0 or S-3 (or Form F-1, F-2 or
F-3) under the Securities Act for purposes of a public offering of such Common
Shares, other than pursuant to a Demand Request, each Rightholder shall have the
right on one occasion to include Registrable Shares held by it or, in the case
of AIG, any Registrable Option Shares in such registration. The Company shall
give prompt written notice of any such proposal, including the intended method
of distribution of such Common Shares, to each Rightholder that has not
previously exercised its rights under this Section 1.2. Subject to Section 1.3,
upon the written request (a "Piggy-Back Request") of any such Rightholder, given
within fifteen (15) calendar days after the transmittal of any such written
notice, the Company will use its reasonable efforts to include in such public
offering any or all of the Registrable Shares or Registrable Option Shares then
held by the Rightholder Group of which such Rightholder is a member to the
extent necessary to permit the sale of such Registrable Shares pursuant to the
intended method of distribution; provided that any participation in such public
offering by a Rightholder shall be on substantially the same terms as the
Company's and each other shareholder's participation therein; and provided
further, that the total number of Common Shares to be included in any such
public offering shall not exceed the Maximum Number, and Common Shares shall be
allocated to give effect to this proviso as provided in Section 1.3. To the
extent the number of Registrable Shares of a Rightholder to be included in a
public offering shall be reduced as set forth in the second proviso of the prior
sentence, such Rightholder shall retain a piggy-back right with respect to the
number of Registrable Shares included in its Piggy-Back Request but not publicly
offered. Any Rightholder shall have the right to withdraw a Piggy-Back Request
by giving written notice to the Company of its election to withdraw such request
at least five (5) days prior to the proposed filing date of such registration
statement and such a withdrawn Piggy-Back Request shall not be counted as the
exercise of such Rightholder's one piggy-back right hereunder. Each Piggy-Back
Request by a Rightholder shall specify the members of its Rightholder Group
whose Registrable Shares or Registrable Option Shares are to be included in the
registration and the number of such shares for each such member. The Company
shall be entitled to select any underwriter in a registration pursuant to this
Section 1.2.
1.3. ALLOCATION OF SECURITIES INCLUDED IN A PUBLIC OFFERING. If the
managing underwriter or placement agent for any public offering effected
pursuant to Section 1.1 or Section 1.2 (or, if there is none, a nationally
recognized investment banking firm acting as financial advisor to the Company)
shall advise the Company and the Sellers in writing that the number of Common
Shares sought to be included in such public offering (including those sought to
be offered by the Company and those sought to be offered by the Sellers) exceeds
the Maximum Number, the Company shall allocate Common Shares to be included in
such public offering up to the Maximum Number as follows:
(a) in the case of any registration pursuant to Section 1.1,
first to the Demanding Shareholders, subject to allocation below the
Maximum Number in such manner as they may agree among themselves; then
to the Joining Shareholders, subject to allocation below the Maximum
Number pro rata according to the number of Registrable Shares or
Registrable Option Shares held by the Rightholder Group of which such
Joining Shareholder is a member; then, as to any excess, to the Company;
and
(b) in the case of any registration pursuant to Section 1.2,
first to the Company for its own account; then to each Rightholder
making a Piggy-Back Request and each other shareholder designated by the
Company, subject to allocation below the Maximum Number pro rata
according to the number of Registrable Shares or Registrable Option
Shares held by the Rightholder Group of which such Rightholder is a
member or by such other shareholder, as the case may be.
Each Rightholder may allocate any allocation made to it pursuant to this Section
1.3 among the members of its Rightholder Group as it wishes. The Company may
allocate any allocation made to it pursuant to
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Section 1.3(a) among itself, its subsidiaries and its shareholders as it wishes,
and may allocate any allocation made to it for its own account pursuant to
Section 1.3(b) among itself and its subsidiaries as it wishes.
1.4. INDEMNIFICATION. (a) The Company shall indemnify, to the extent
permitted by law, and hold harmless each Selling Shareholder against any losses,
claims, damages or liabilities, joint or several, or actions in respect thereof
("Claims"), to which such indemnified party may become subject, under the
Securities Act of 1933 ("Securities Act") or otherwise, insofar as such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the registration statement, in any prospectus
or preliminary prospectus included in such registration statement or in any
amendment or supplement thereto filed with the United States Securities and
Exchange Commission ("SEC") (collectively, "Registration Documents") or insofar
as such Claims arise out of or are based upon the omission or alleged omission
to state in any Registration Document a material fact required to be stated
therein or necessary to make the statements made therein not misleading, and
will reimburse any such indemnified party for any legal or other expenses
reasonably incurred by such indemnified party in investigating or defending any
such Claim as such expenses are incurred; provided that the Company shall not be
liable in any such case to the extent that any such Claim arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Document in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party or an underwriter specifically for use in the preparation
of such Registration Document; and provided further, that the Company shall not
be liable to any underwriter for such indemnification with respect to any
preliminary prospectus to the extent that any such Claim results from the fact
that such underwriter sold securities to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the prospectus and any amendment or
supplement thereto in any case where such delivery is required by the Securities
Act if the Company has previously furnished copies thereof in sufficient
quantity to such underwriter and the Claim to which such underwriter is subject
results from an untrue statement or omission of a material fact contained in the
preliminary prospectus that was identified in writing at such time to such
underwriter and corrected in such prospectus or such amendment or supplement
thereto.
(b) In connection with any registration in which any Seller is
participating, each Seller, severally and not jointly, shall indemnify, to the
extent permitted by law, and hold harmless the Company and each other Seller and
each underwriter against any Claims to which each such indemnified party may
become subject under the Securities Act or otherwise, insofar as such Claims
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Document, or insofar as any
claims arise out of or are based upon the omission or alleged omission to state
in any Registration Document a material fact required to be stated therein or
necessary to make the statements made therein not misleading; provided, however,
that such indemnification shall be payable only if, and to the extent that, any
such Claim arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Registration Document in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Seller specifically for use in the preparation
thereof.
(c) Any person entitled to indemnification under Section 1.4(a) or (b)
above shall notify promptly the indemnifying party in writing of the
commencement of any Claim if a claim for indemnification in respect thereof is
to be made against an indemnifying party under this Section 1.4, but the
omission of such notice shall not relieve the indemnifying party from any
liability which it may have to any indemnified party otherwise than under
Section 1.4(a) or (b). In case any action is brought against an indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it chooses, to assume the defense thereof with counsel satisfactory to the
indemnified party, who may be counsel for the indemnifying party unless the
indemnified party reasonably concludes such counsel would have a conflict of
interest in representing both indemnified and indemnifying parties (provided
that the Company shall not be responsible for the fees and expenses of more than
one counsel for all indemnified parties with respect to any Claim or group of
Claims alleged to have arisen from similar facts); and, after notice from the
indemnifying party to the indemnified party that it so chooses, the indemnifying
party shall not be liable for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
reasonable costs of investigation. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written
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consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) If for any reason the foregoing indemnity is unavailable to, or is
insufficient to hold harmless, an indemnified party in respect of any Claim, (i)
if the indemnified party is an underwriter, then each indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
any Claim in such proportion as is appropriate to reflect the relative benefits
received by the Sellers and the Company, on the one hand, and the indemnified
party, on the other, from the offering of securities to which such Registration
Documents relate, (ii) as between the Company and each Seller, the indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of any Claim in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and the indemnified
party, on the other, in connection with the statements or omissions that
resulted in such Claims, as well as any other relevant equitable considerations.
If, however, the allocation provided in clause (i) of the immediately preceding
sentence is not permitted by applicable law, or if the indemnified party failed
to give the notice required by clause (c) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect both the relative benefits and the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions that resulted in such Claims as well as any
other relevant equitable considerations. The relative benefits received by the
Sellers and the Company, on the one hand, and by the underwriters, on the other,
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the securities (before deducting expenses) received by the Sellers
and the Company, on the one hand, bear to the total underwriting discounts and
commissions received by the underwriters, on the other hand, in connection with
such offering. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable in
respect of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such Claim. 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.
(e) As a condition to their obligations under this Section 1.4, each of
the Company and the Sellers shall have received from each underwriter of
Registrable Shares included in a registration statement filed under the
Securities Act pursuant to Section 1.1 or 1.2 an undertaking to indemnify, to
the extent permitted by law, and hold harmless the Company and the Sellers
against (or if such indemnity is unavailable or is insufficient to hold harmless
an indemnified party, to provide contribution, on substantially the same basis
provided to such underwriter in accordance with Section 1.4(d), in respect of)
any Claims to which each such indemnified party may become subject under the
Securities Act or otherwise, insofar as such Claims arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Document, or insofar as any claims arise out of or
are based upon the omission or alleged omission to state in any Registration
Document a material fact required to be stated therein or necessary to make the
statements made therein not misleading; provided, however, that such
indemnification (or contribution, as the case may be) shall be payable only if,
and to the extent that, any such Claim arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Registration Document in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such underwriter
specifically for use in the preparation thereof. Notwithstanding the foregoing,
no underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Shares underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages which such underwriter otherwise has been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. The obligation of any underwriters to provide indemnification (or
contribution, as the case may be) pursuant to this paragraph (e) shall be
several in proportion to their respective underwriting commitments and not
joint.
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(f) The maximum liability of any Selling Shareholder to indemnify or
contribute payments pursuant to this Section 1.4 shall not exceed the aggregate
net proceeds from the sale of Common Shares (including the sale of Common
Shares, if any, pursuant to the exercise of an overallotment option) by such
Selling Shareholder in such registration.
(g) The obligations of the Company pursuant to this Section 1.4 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director and
general partner of any underwriter or Seller and to each person, if any, who
controls any underwriter or Seller within the meaning of the Securities Act. The
obligations of each Seller pursuant to this Section 1.4 shall be in addition to
any liability which such Seller may otherwise have and shall extend, upon the
same terms and conditions, to each officer, director and general partner of the
Company, any underwriter or any other Seller and to each person, if any, who
controls the Company, any underwriter or any other Seller within the meaning of
the Securities Act. The obligations of any underwriter pursuant to this Section
1.4 shall be in addition to any liability which such underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each officer,
director and general partner of the Company or any Seller and to each person, if
any, who controls the Company or any Seller within the meaning of the Securities
Act.
1.5. REQUIREMENTS WITH RESPECT TO REGISTRATION. If and whenever the
Company is required by the provisions hereof to use its reasonable efforts to
register any Registrable Shares or Registrable Option Shares under the
Securities Act, the Company shall, as promptly as practicable:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Shares or Registrable Option Shares and use
its reasonable efforts to cause such registration statement to become
and remain effective.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement current and to comply with the provisions of the Securities
Act and any regulations promulgated thereunder with respect to the sale
or other disposition of such Registrable Shares or Registrable Option
Shares, for as long as a prospectus relating to any such Registrable
Shares or Registrable Option Shares is required to be delivered under
the Securities Act, subject to the limitation in Section 1.1(b)(vi).
(c) Furnish to the Sellers participating in the offering copies
(in reasonable quantities) of summary, preliminary, final, amended or
supplemented prospectuses, in conformity with the requirements of the
Securities Act and any regulations promulgated thereunder, and other
documents as reasonably may be required in order to facilitate the
disposition of such Registrable Shares or Registrable Option Shares, but
only while the Company is required under the provisions hereof to keep
the registration statement current.
(d) Use its reasonable efforts to register or qualify the
Registrable Shares or Registrable Option Shares covered by such
registration statement under such other securities or blue sky laws of
such jurisdictions in the United States as the managing underwriter or
placement agent (or, if none, the Rightholders participating in the
offering) shall reasonably request, and do any and all other acts and
things which may be reasonably necessary to enable each participating
Seller or underwriter to consummate the disposition of the Registrable
Shares or Registrable Option Shares in such jurisdictions; provided,
however, that in no event shall the Company be required to qualify to do
business as a foreign corporation in any jurisdiction where it is not so
qualified; to execute or file any general consent to service of process
under the laws of any jurisdiction; to take any action that would
subject it to service of process in suits other than those arising out
of the offer and sale of the securities covered by the registration
statement; or to subject itself to taxation in any jurisdiction where it
has not theretofore done so unless the Company shall have received a
reasonably satisfactory indemnity in respect thereto; or to subject
itself to any insurance regulation in any jurisdiction in which it has
not theretofore been so subject.
(e) Notify each Seller selling Registrable Shares or Registrable
Option Shares, at any time when a prospectus relating to any such
Registrable Shares or Registrable Option Shares covered by
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such registration statement is required to be delivered under the
Securities Act, of the Company's becoming aware that the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing,
and, subject to the limitation in Section 1.1(b)(vi), promptly prepare
and furnish to each such Seller selling Registrable Shares or
Registrable Option Shares and each underwriter a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable Shares or Registrable
Option Shares, 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.
(f) As soon as practicable after the effective date of such
registration statement, and in any event within eighteen (18) months
thereafter, make generally available to Sellers participating in the
offering an earnings statement (which need not be audited) covering a
period of at least twelve (12) consecutive months beginning after the
effective date of the registration statement, which earning statement
shall satisfy the provisions of Section 11(a) of the Securities Act,
including at the Company's option, Rule 158 thereunder.
(g) Deliver promptly to each Rightholder that is, or any of
whose Affiliates is, a Seller participating in the offering, upon such
Rightholder's written request, copies of all correspondence between the
SEC and the Company, its counsel or auditors and all memoranda relating
to discussions with the SEC or its staff with respect to the
registration statement and permit each such Rightholder to do such
investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the registration statement as
it deems reasonably necessary. Each such Rightholder agrees that it will
use its best efforts not to interfere unreasonably with the Company's
business when conducting any such investigation.
(h) Obtain "cold comfort" letters from the Company's independent
public accountants (including one letter when such registration
statement goes effective and one at the closing) in customary form and
covering such matters of the type customarily covered by such "cold
comfort" letters.
1.6. EXPENSES. The Company shall be obligated to pay Registration
Expenses incurred in connection with any Demand Request, other than a Demand
Request that is withdrawn by the Rightholder other than pursuant to Section
1.1(d), in which case such Registration Expenses shall be paid by the proposed
Sellers on a joint and several basis or pursuant to such other arrangements as
the Company and the Sellers may agree. The Company shall also be obligated to
pay Registration Expenses in connection with any Piggy-Back Request, except that
those expenses set forth in clauses (a), (b) and (c) of the definition of
Registration Expenses shall be borne by the Company and each Seller (other than
an Over-allotment Remaining Shareholder) pro rata on the basis of the number of
shares being offered on behalf of the Company and each Seller (other than an
Over-allotment Remaining Shareholder).
1.7. CERTAIN SELLERS' OBLIGATIONS. Each Seller shall provide such
information to the Company as the Company may reasonably request in connection
with any registration hereunder of Registrable Shares or Registrable Option
Shares for such Seller's account and shall dispose of any such Registrable
Shares or Registrable Option Shares pursuant to any registration hereunder in
the manner contemplated thereby. Each Rightholder shall cause the members of its
Rightholder Group to perform their respective obligations under this Agreement.
1.8. TRANSFER OF AIG OPTION. In the event AIG transfers the AIG Option
to one or more transferees pursuant to Section 5(c) thereof, following execution
by any such transferee and delivery to the Company of an instrument reasonably
acceptable to the Company acknowledging that such transferee has become a party
to this Agreement and assumed its rights and obligations hereunder, all
references herein to AIG with respect to Registrable Option Shares shall be
deemed to apply (i) in the case of a transfer of the AIG Option in whole, solely
to the transferee of the AIG Option and (ii) in the case of a transfer of the
AIG Option in part, collectively either to the transferees of the AIG Option or,
if AIG has retained a portion of the AIG
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Option, to AIG and such transferee(s). The Company shall be entitled to rely
solely upon the instructions of AIG or the transferee of the AIG Option
designated in writing by AIG with respect to any rights granted hereunder to the
holders of Registrable Option Shares. The number of demand and piggy back
registration rights afforded AIG hereunder shall apply in aggregate to AIG and
any and all said transferees, without any increase in the number of said demand
and piggy back registration rights. There are no registration rights with
respect to the AIG Option itself.
ARTICLE II
DEFINITIONS
2.1. DEFINED TERMS. As used in this Agreement, the following capitalized
terms have the respective meanings set forth below:
"Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such person and with respect to
Quantum Industrial Partners LDC shall include, without limitation, one or more
of Xxxxxx Xxxxx, Xxxx Xxxxx or Xxxxx Fund Management or affiliates thereof, and
any person or entity for which any such person or entity acts as investment
adviser or investment manager.
"AIG" shall mean American International Group, Inc., a Delaware
corporation.
"AIG Option" shall mean the Amended and Restated Option Agreement, dated
March __, 1996, between the Company and AIG, as the same may be further amended
from time to time.
"Bye-laws" shall mean the Amended and Restated Bye-laws of the Company,
as the same may be further amended from time to time.
"Capital Securities" shall mean all shares of each class in the capital
stock of the Company and all securities convertible into or exchangeable or
exercisable for any such shares.
"Closing" shall mean the closing of the IPO pursuant to an effective
registration statement under the Securities Act, and the day on which the
Closing occurs shall be the day confirmed as such by a director or officer of
the Company in the records maintained by the Company.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934.
"person" shall mean any individual, corporation, company, partnership,
joint venture, trust, association, government or governmental body or other
entity.
"Registrable Option Shares" shall mean the Common Shares obtained or
obtainable on exercise of the AIG Option.
"Registrable Shares" shall mean, at any time, all Common Shares then
outstanding, other than shares that have ceased to be Registrable Shares. Common
Shares shall cease to be Registrable Shares (a) when a registration statement
with respect to the disposition of such shares shall have become effective under
the Securities Act (including the registration statement with respect to the
IPO) and such shares shall have been disposed of pursuant to such registration
statement (including in the IPO), or (b) when such shares shall have been sold
pursuant to Rule 144 under the Securities Act.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with the demand rights set forth in Section 1.1 and
piggy-back rights set forth in Section 1.2, including, without limitation, (a)
all SEC and stock exchange or National Association of Securities Dealers, Inc.
registration and filing fees, (b) all fees and expenses of complying with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Shares or Registrable Option Shares), (c) the cost of printing or
preparing
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any registration statement, prospectus, offering circular, agreement among
underwriters, underwriting agreement, blue sky memorandum, share certificates
and any other documents in connection with the offering, purchase, sale and
delivery of the Registrable Shares or Registrable Option Shares, (d) the costs
and charges of any transfer agent and registrar and any custodian or
attorney-in-fact appointed to act on behalf of the Sellers, (e) all messenger
and delivery expenses, (f) the fees and expenses of any qualified independent
underwriter and (g) the reasonable fees and disbursements of counsel for the
Company and the Company's independent public accountants, including the expenses
of any special audits and/or "cold comfort" letters required by or incident to
such performance and compliance; provided that each Seller shall pay the fees
and disbursements of its own counsel, if any, and all underwriting discounts,
commissions and transfer taxes, if any, relating to the sale or disposition of
such Sellers' Registrable Shares or Registrable Option Shares.
"Rightholders" shall mean, (i) American International Group, Inc., a
Delaware corporation, (ii) General Re Corporation, a Delaware corporation, (iii)
Quantum Industrial Partners LDC, (iv) Tivadar Charitable Lead Trust and (v) any
other shareholder of the Company immediately prior to the Closing who retains
any ownership of Common Shares owned by it at the time of the Closing following
the Closing solely by virtue of non- or incomplete exercise of the underwriters
over-allotment option with respect to the IPO (these latter shareholders being
referred to as the "Over-allotment Remaining Shareholders").
"Rightholder Group" means, as to any Rightholder at any time, such
Rightholder and its Affiliates (other than the Company) at such time.
"Rule 144" shall mean Rule 144 under the Securities Act.
"Securities Act" shall mean the U.S. Securities Act of 1933, as amended.
"SEC" shall mean the U.S. Securities and Exchange Commission or any
other U.S. federal agency at the time administering the Securities Act or the
Exchange Act.
"shareholder" shall mean, with respect to any Common Shares, the person
in whose name such shares are registered in the register of members maintained
by the Company in accordance with applicable law and the Bye-laws, and the terms
"hold," "held" and "holding" shall have meanings correlative to the foregoing.
"10% Shareholder" shall have the meaning set forth in the Bye-laws.
"United States 25% Shareholder" shall have the meaning set forth in the
Bye-laws.
2.2. GENERAL. Unless the context otherwise requires, references in this
Agreement to any "section" or "article" shall mean a section or article of this
Agreement, as the case may be, and the terms "hereof," "hereunder," "hereto" and
words of similar meaning shall mean this Agreement in its entirety and not any
particular provisions of this Agreement. Unless the context otherwise requires,
the terms defined herein include the singular as well as the plural.
Unless the context otherwise requires, each reference herein to the
Securities Act, the Exchange Act or Rule 144 (or any other rule, regulation or
form promulgated under either such statute) shall be deemed to mean, as of any
time, such statute, rule, regulation or form as then in effect, after all
amendments thereto, or, if not then in effect, any successor statute, rule,
regulation or form as then in effect, after all amendments thereto.
-10-
ARTICLE III
RULE 144
3.1. AVAILABILITY OF RULE 144. The Company shall use its best efforts to
ensure that the information requirement set forth in paragraph (c) of Rule 144
is satisfied so that the safe harbor provided by Rule 144 is available to the
Rightholders for all transfers of Registrable Shares or Registrable Option
Shares made after the 90th day after the Company becomes subject to the
reporting requirements of Section 13 of the Exchange Act. Upon request made by
any Rightholder at any time during such period, the Company will provide such
Rightholder with a written statement confirming that the Company has been
subject to and has complied with the reporting requirements as provided in said
paragraph (c), unless the Company shall have included such a statement in its
then-latest annual or quarterly report filed with the U.S. Securities and
Exchange Commission.
ARTICLE IV
MISCELLANEOUS
4.1. TERMINATION OF CERTAIN RIGHTS. The rights of any Rightholder to
make a Demand Request or a Joining Request pursuant to Section 1.1 or a
Piggy-Back Request pursuant to Section 1.2 shall terminate on June 29, 2003;
provided that, as to any Registrable Shares or Registrable Option Shares that
are subject to a Demand Request, Joining Request or Piggy-Back Request duly
delivered on or prior to such date, such termination shall be delayed until such
shares have been disposed of pursuant to such registration statement or such
offering has been completed or abandoned.
4.2. AMENDMENT. This Agreement may not be amended except in a written
instrument signed by the Company and each Rightholder whose rights hereunder
would be adversely affected thereby.
4.3. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed, unless otherwise specified
herein, to have been duly given if delivered or mailed, first class postage
prepaid, or transmitted by telex or facsimile, (a) if to any Rightholder, at its
address or telex or facsimile number appearing in the register of members of the
Company and (b) if to the Company, at its principal executive office.
4.4. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof.
4.5. BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto, and their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
4.6. ASSIGNABILITY. This Agreement shall not be assignable by any party
hereto.
4.7. HEADINGS. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
4.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
4.9. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York (without regard to
principles of conflict of laws).
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4.10. EFFECTIVENESS. This Agreement shall become effective upon the
Closing automatically and with no action on the part of any person. If the IPO
shall be abandoned in the manner and as evidenced as set forth in Section 1.1 of
the Termination Agreement, dated as of the date hereof, among the Company and
the Shareholders specified in Schedule 1 thereto, this Agreement shall be
abandoned and of no force or effect.
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IN WITNESS WHEREOF, the parties named below have hereto set their hands
as of the day and year first above written.
IPC HOLDINGS, LTD.
By /s/ Xxxx X. Xxxxxxx
-------------------------------
Title: President and Chief
Executive Officer
SHAREHOLDERS
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice Chairman - Finance
GENERAL RE CORPORATION
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: Vice President,
Corporate Development
QUANTUM INDUSTRIAL PARTNERS LDC
By /s/ Xxxxxxx X. Xxxx
-------------------------------------
Title: Attorney-in-Fact
TIVADAR CHARITABLE LEAD TRUST
dated September 30, 1982
By /s/ Xxxxxxx X. Xxxx
-------------------------------------
Title: Sole Trustee
THE LIFE INSURANCE COMPANY OF
VIRGINIA
By /s/ Xxxx X. Xxxx
-------------------------------------
Title: Executive Director,
Aon Advisers, Inc.
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EMPLOYERS REINSURANCE CORP.
By /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Title: Senior Vice President,
General Counsel and Secretary
FORD GENERAL RETIREMENT PLAN
By Alliance Capital Management, L.P.
Its Investment Adviser
By Alliance Capital Management Corp.
Its General Partner
By /s/ Xxxx X. Xxxxxx
-------------------------------------
Title: Assistant Secretary
CFG UK INTERNATIONAL CORP.
By /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
RIVERBEACH INVESTMENTS LIMITED
By /s/ Xxxx X. Xxxxxxx
-------------------------------------
Title: Attorney-in-Fact
NASSAU CAPITAL PARTNERS, L.P.
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Title: Member
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