Exhibit 4.2
CONFORMED COPY
SHAREHOLDERS AGREEMENT
BY AND AMONG
THE SHAREHOLDERS SIGNATORY HERETO
AND
ARCH CAPITAL GROUP LTD.
DATED AS OF NOVEMBER 20, 2001
CONFORMED TO REFLECT
AMENDMENT DATED JANUARY 3, 2001
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions.........................................2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company...............9
Section 2.2. Representations and Warranties of Warburg...................9
Section 2.3. Representations and Warranties of H&F......................10
Section 2.4. Representations and Warranties of GE.......................10
Section 2.5. Representations and Warranties of Trident..................10
Section 2.6. Representations and Warranties of Farallon.................11
ARTICLE III
VOTING; BOARD REPRESENTATION
Section 3.1. Board of Directors.........................................11
Section 3.2. Committees of the Board....................................13
Section 3.3. Investor Protection Matters................................14
Section 3.4. Voting.....................................................16
Section 3.5. Chairman of the Company....................................17
Section 3.6. Certain Transactions.......................................17
ARTICLE IV
REGISTRATION RIGHTS
Section 4.1. Demand Registrations.......................................17
Section 4.2. Shelf Registration.........................................20
Section 4.3. Piggy-Back Registration....................................20
Section 4.4. Allocation of Shares to be Registered......................20
Section 4.5. Registration Procedures....................................21
Section 4.6. Registration Expenses......................................25
Section 4.7. Indemnification; Contribution..............................25
ARTICLE V
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS;
RESTRICTIONS ON TRANSFER AND CONVERSION
Section 5.1. Tag-Along Rights; Drag-Along Rights........................27
Section 5.2. Restrictions on Transfer...................................29
Section 5.3. Restrictions on Conversion.................................29
ARTICLE VI
RESTRICTIONS ON DIVIDENDS AND SHARE REPURCHASES
ARTICLE VII
EFFECTIVENESS AND TERMINATION
Section 7.1. Effectiveness..............................................30
Section 7.2. Termination................................................30
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Injunctive Relief..........................................31
Section 8.2. Successors and Assigns.....................................31
Section 8.3. Amendments; Waiver.........................................32
Section 8.4. Notices....................................................32
Section 8.5. Applicable Law.............................................33
Section 8.6. Headings...................................................34
Section 8.7. Integration................................................34
Section 8.8. Severability...............................................34
Section 8.9. Consent to Jurisdiction....................................34
Section 8.10. Counterparts...............................................34
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SHAREHOLDERS AGREEMENT, dated as of November 20, 2001 (this "Agreement"),
by and among ARCH Capital Group Ltd., a company registered under the laws of
Bermuda (the "Company"), WARBURG PINCUS (BERMUDA) PRIVATE EQUITY VIII, L.P., a
limited partnership organized under the laws of Bermuda, WARBURG PINCUS
(BERMUDA) INTERNATIONAL PARTNERS, L.P., a limited partnership organized under
the laws of Bermuda, WARBURG PINCUS NETHERLANDS INTERNATIONAL PARTNERS I, C.V.,
an entity organized under the laws of the Netherlands, WARBURG PINCUS
NETHERLANDS INTERNATIONAL PARTNERS II, C.V., an entity organized under the laws
of the Netherlands (each, a "Warburg Purchaser," and collectively, "Warburg"),
HFCP IV (BERMUDA), L.P., a limited partnership organized under the laws of
Bermuda, H&F INTERNATIONAL PARTNERS IV-A (BERMUDA), L.P., a limited partnership
organized under the laws of Bermuda, H&F INTERNATIONAL PARTNERS IV-B (BERMUDA),
L.P., a limited partnership organized under the laws of Bermuda, and H&F
EXECUTIVE FUND IV (BERMUDA), L.P., a limited partnership organized under the
laws of Bermuda (each, a "H&F Purchaser," and collectively, "H&F," and together
with Warburg and such other Persons that are, or may hereafter become, parties
hereto (in either case for purposes of such provisions hereof as may be
indicated immediately above the signature of such other Persons) pursuant to the
terms of Section 8.2 hereof, the "Investors").
W I T N E S S E T H :
WHEREAS, the Company and certain of the Investors have entered into a
Subscription Agreement, dated as of October 24, 2001, as amended November 20,
2001 (the "Subscription Agreement"), pursuant to the terms of which, among other
things, the Company shall issue and sell to the Investors, and Investors shall
acquire from the Company, (1) Series A Convertible Preference Shares, par value
U.S. $0.01 per share, of the Company (the "Preference Shares"), and (2) Class A
Warrants to purchase common shares, par value U.S. $0.01 per share, of the
Company (the "Common Shares") (the "Class A Warrants," and together with the
Preference Shares, the "Purchased Securities") (such sale and purchase and the
other transactions contemplated by the Subscription Agreement or described in
the following recitals, the "Transactions");
WHEREAS, the Company and the purchasers named therein (the "Management
Purchasers") have entered into a Management Subscription Agreement, dated as of
October 24, 2001 (the "Management Subscription Agreement"), pursuant to the
terms of which, among other things, the Company shall issue and sell to the
Management Purchasers, and the Management Purchasers shall acquire from the
Company, Purchased Securities;
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WHEREAS, the Company, Warburg, H&F and Trident have entered into a letter
agreement, dated as of November 8, 2001, pursuant to the terms of which, among
other things, Warburg assigned to Trident its right, and Trident assumed from
Warburg its obligation, under the Subscription Agreement to purchase certain
Purchased Securities;
WHEREAS, the Company, Warburg, H&F and GE have entered into a letter
agreement, dated as of November 20, 2001, pursuant to the terms of which, among
other things, Warburg assigned to GE its right, and GE assumed from Warburg its
obligation, under the Subscription Agreement to purchase certain Purchased
Securities;
WHEREAS, the Company, Warburg, H&F and Farallon have entered into a letter
agreement, dated as of November 20, 2001, pursuant to the terms of which, among
other things, H&F assigned to Farallon its right, and Farallon assumed from H&F
its obligation, under the Subscription Agreement to purchase certain Purchased
Securities;
WHEREAS, the execution of this Agreement is a condition to the obligation
of the parties to consummate the Transactions; and
WHEREAS, the Company and Investors desire to establish in this Agreement
certain terms and conditions concerning the acquisition of Purchased Securities
and related provisions concerning the Investors' relationship with and
investment in the Company following the consummation of the Transactions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein 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
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions. In addition to other terms defined
elsewhere in this Agreement, as used in this Agreement, the following terms
shall have the meanings ascribed to them 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 first Person (including
with respect to individuals, any trusts, foundations, family limited
partnerships or similar entities); provided, however, that no portfolio
investment of either Warburg or H&F, or any of their respective Affiliates,
shall be
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deemed to be an Affiliate of Warburg or H&F, as the case may be; provided,
further, that none of the Farallon Purchasers or Farallon, or any of their
respective Affiliates, shall be deemed to be an Affiliate of H&F. As used in
this definition, "control" (including, with correlative meanings, "controlled
by" and "under common control with") shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).
"Agreement" shall have the meaning assigned to such term in the preamble
hereto.
"Approval Date" shall mean the later of the dates on which the Requisite
Shareholder Approval and the Requisite Regulatory Approval occur.
"Beneficially Own" shall mean, with respect to any securities, having
"beneficial ownership" of such securities for purposes of Rule 13d-3 or 13d-5
under the Exchange Act as in effect on the date hereof, and "Beneficial
Ownership" shall have the corresponding meaning.
"Blackout Period" shall have the meaning assigned in Section 4.1(c).
"Board" shall mean the duly elected Board of Directors of the Company in
office at the applicable time.
"Business Day" shall mean any day that is not a Saturday, Sunday or other
day on which the commercial banks in New York City are authorized or required by
law to remain closed.
"Bye-laws" shall mean the bye-laws of the Company.
"Claims" shall have the meaning assigned in Section 4.7(a).
"Class A Warrants" shall have the meaning assigned in the recitals hereto.
"Closing" shall mean the consummation of the Transactions pursuant to the
terms of the Subscription Agreement.
"Common Shares" shall have the meaning assigned in the recitals hereto.
"Company" shall have the meaning assigned in the preamble hereto.
"Demand Registration" shall mean any registration effected pursuant to a
Warburg Demand Request or a H&F Demand Request.
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"Director" shall mean any member of the Board.
"Effective Period" shall have the meaning assigned in Section 4.5(a)(3).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations that may from time to time be promulgated
thereunder.
"Existing Registration Rights" shall have the meaning assigned in Section
4.1(a) hereof.
"Farallon" shall mean Farallon Capital Partners, L.P., Farallon Capital
Institutional Partners II, L.P., Farallon Capital Institutional Partners III,
L.P. and RR Capital Partners, L.P., collectively, with each individually being a
"Farallon Purchaser".
"Farallon Permitted Transferee" shall mean, with respect to any Farallon
Purchaser, any Person or entity that directly or indirectly through one or more
intermediaries controls, or is controlled by or is under common control with
such Farallon Purchaser or an entity over which such Farallon Purchaser has
management rights.
"GE" shall mean Insurance Private Equity Investors, L.L.C. and Orbital
Holdings, Ltd., collectively, with each individually being a "GE Purchaser".
"GE Permitted Transferee" shall mean, with respect to any GE Purchaser, any
Person or entity that directly or indirectly through one or more intermediaries
controls, or is controlled by or is under common control with such GE Purchaser
or an entity over which such GE Purchaser has management rights, or any
successor trustees or trust (if applicable).
"H&F" shall have the meaning assigned in the preamble hereto.
"H&F Demand Request" shall have the meaning assigned in Section 4.1(b)
hereof.
"H&F Demand Shares" shall have the meaning assigned in Section 4.1(b)
hereof.
"H&F Directors" shall have the meaning assigned in Section 3.1(c) hereof.
"H&F Purchaser" shall have the meaning assigned the preamble hereto.
"H&F Registrable Shares" shall have the meaning assigned in Section 4.1(b)
hereof.
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"Independent Director" means a Director who is not an Affiliate of either
Warburg or H&F.
"Initial H&F Director" shall have the meaning assign in Section 3.1(b).
"Initial Investment" shall mean, with respect to any Investor, the total
number of Common Shares issuable (a) upon conversion of the Preference Shares
acquired by such Investor at the Closing, (b) upon conversion of any additional
Preference Shares acquired by such Investor with respect to the Preference
Shares referred to in clause (a) pursuant to the terms of the Subscription
Agreement (or the Management Subscription Agreement), (c) upon exercise for cash
of the Class A Warrants acquired by such Investor at Closing, (d) upon exercise
for cash of any additional Class A Warrants acquired by such Investor pursuant
to the terms of the Subscription Agreement (or the Management Subscription
Agreement) and (e) any other securities issued in respect of the securities
described in clauses (a) though (d) of this definition or into which such
securities shall be converted in connection with stock splits, reverse stock
splits, stock dividends or distributions, or combinations or similar
recapitalizations.
"Initial Shares" shall mean, with respect to any Investor, (a) the
Preference Shares acquired by such Investor at the Closing, (b) any additional
Preference Shares acquired by such Investor with respect to the Preference
Shares referred to in clause (a) pursuant to the terms of the Subscription
Agreement (or the Management Subscription Agreement), (c) the Class A Warrants
acquired by such Investor at Closing, (d) any additional Class A Warrants
acquired by such Investor pursuant to the terms of the Subscription Agreement
(or the Management Subscription Agreement) and (e) any other securities issued
in respect of the securities described in clauses (a) though (d) of this
definition or into which such securities shall be converted in connection with
stock splits, reverse stock splits, stock dividends or distributions, or
combinations or similar recapitalizations. References to the "the number of
Initial Shares" shall mean the number of Common Shares comprising the Initial
Shares (based, in the case of Preference Shares and Class A Warrants, upon the
number of Common Shares issuable upon conversion or exercise for cash thereof).
"Initial Warburg Director" shall have the meaning assigned in Section
3.1(b) hereof.
"Interested Party Transaction" shall mean any transaction between the
Company or any of its Subsidiaries and any officer or Director, or Affiliate of
any officer or Director, of the Company.
"Investors" shall have the meaning assigned in the preamble hereto.
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"Investor Shares" shall mean, at any time, any Common Shares issuable in
respect of Initial Shares acquired by an Investor and any Common Shares acquired
by an Investor after the Closing (and any Common Shares or other securities
issued in respect thereof or into which such Common Shares shall be converted in
connection with stock splits, reverse stock splits, stock dividends or
distributions, or combinations or similar recapitalizations).
"Management Purchasers" shall have the meaning set forth in the recitals
hereto.
"Management Subscription Agreement" shall have the meaning set forth in the
recitals hereto.
"Mandatory Conversion Date" shall have the meaning set forth in Section 3.3
hereof.
"Market Value" shall mean, as of any date, the average of the daily high
and low sales prices per Common Share on the Nasdaq for each of the twenty full
trading days immediately preceding (but not including) such date.
"Material Transaction" shall have the meaning assigned in Section 4.1(c).
"Maximum Number" shall have the meaning assigned in Section 4.4.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"Nasdaq Independent Director" shall have the meaning specified in Rule
4200(a)(14) of the Rules of the National Association of Securities Dealers, Inc.
"Participating Investor" shall have the meaning assigned in Section
4.5(a)(2) hereof.
"Per Share Price" shall have the meaning assigned in the Subscription
Agreement.
"Person" shall mean any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Piggy-Back Registration" shall have the meaning assigned in Section 4.3.
"Piggy-Back Request" shall have the meaning assigned in Section 4.3.
"Preference Shares" shall have the meaning assigned in the recitals hereto.
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"Purchased Securities" shall have the meaning assigned in the recitals
hereto.
"Registrable Shares" shall have the meaning assigned in Section 4.1(b)
hereof.
"Requisite Nasdaq Approval" shall have the meaning assigned in the
Certificate of Designations for the Preference Shares.
"Requisite Regulatory Approval" shall have the meaning assigned in the
Certificate of Designations for the Preference Shares.
"Requisite Shareholder Approval" shall have the meaning assigned in the
Certificate of Designations for the Preference Shares.
"Retained Investment" shall mean, with respect to any Investor, at any
time, the amount of the Initial Investment Beneficially Owned by such Investor
at such time.
"Retained Percentage" shall mean, with respect to any Investor, at any
time, the quotient, expressed as a percentage, of (a) such Investor's Retained
Investment, over (b) such Investor's Initial Investment.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations that may from time to time be promulgated thereunder.
"Selling Investor" shall have the meaning assigned in Section 5.1(a)
hereof.
"Shelf Registration Statement" shall have the meaning assigned in Section
4.2 hereof.
"Subscription Agreement" means the Subscription Agreement, dated as of
October 24, 2001, by and between the Company and each of the Purchasers named
therein, as amended from time to time in accordance with its terms.
"Subsidiary" shall mean, with respect to any Person, any other entity of
which securities or other ownership interests having ordinary power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"Tag-Along Investor" shall have the meaning assigned in Section 5.1(a)
hereof.
"Third Party Sale" shall have the meaning assigned in Section 5.1(a)
hereof.
"Third Party Sale Notice" shall have the meaning assigned in Section 5.1(a)
hereof.
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"Transactions" shall have the meaning assigned in the recitals hereto.
"Trident" shall mean Trident II, L.P., Xxxxx & XxXxxxxx Capital
Professionals Fund, L.P. and Xxxxx & McLennan Employee's Securities Company,
L.P., collectively, with each individually a "Trident Purchaser."
"Votes" shall mean votes entitled to be cast generally in the election of
Directors.
"Voting Power" shall mean, calculated at a particular point in time, the
ratio, expressed as a percentage, of (a) the Votes represented by the Voting
Securities with respect to which the Voting Power is being determined, to (b)
the aggregate Votes represented by all then outstanding Voting Securities. For
this purpose, the votes attributable to the Preference Shares shall be on an
as-converted basis, without regard to the limitations imposed under the
Certificate of Designations.
"Voting Securities" shall mean (a) the Common Shares, (b) the Preference
Shares and (c) shares of any other class of securities of the Company then
entitled to vote generally in the election of Directors.
"Warburg" shall have the meaning assigned in the preamble hereto.
"Warburg Demand Request" shall have the meaning assigned in Section 4.1(a)
hereof.
"Warburg Demand Shares" shall have the meaning assigned in Section 4.1(a)
hereof.
"Warburg Directors" shall have the meaning assigned in Section 3.1(c)
hereof.
"Warburg Purchaser" shall have the meaning assigned in the preamble hereto.
"Warburg Registrable Shares" shall have the meaning assigned in Section
4.1(a) hereof.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The Company
represents and warrants to each Investor as follows:
(a) The Company has been duly formed and is validly existing as a
company in good standing under the laws of Bermuda and has all necessary
corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder.
(b) This Agreement has been duly and validly authorized by the Company
and the Company has taken all necessary and appropriate action to execute
and deliver this Agreement and to perform its obligations hereunder.
(c) This Agreement has been duly executed and delivered by the Company
and, assuming due authorization and valid execution and delivery by each
other party hereto, is a valid and binding obligation of the Company,
enforceable against it in accordance with its terms.
Section 2.2. Representations and Warranties of Warburg. Each Warburg
Purchaser represents and warrants to each other party hereto as follows:
(a) Such Warburg Purchaser has been duly formed and is validly
existing and in good standing, to the extent applicable, under the laws of
its respective jurisdiction of formation and has all necessary power and
authority to enter into this Agreement and to carry out its obligations
hereunder.
(b) This Agreement has been duly and validly authorized by such
Warburg Purchaser and such Warburg Purchaser has taken all necessary and
appropriate action to execute and deliver this Agreement and to perform its
obligations hereunder.
(c) This Agreement has been duly executed and delivered by such
Warburg Purchaser and, assuming due authorization and valid execution and
delivery by the Company, is a valid and binding obligation of such Warburg
Purchaser, enforceable against it in accordance with its terms.
Section 2.3. Representations and Warranties of H&F. Each H&F Purchaser
represents and warrants to each other party hereto as follows:
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(a) Such H&F Purchaser has been duly formed and is validly existing
under the laws of its respective jurisdiction of formation and has all
necessary power and authority to enter into this Agreement and to carry out
its obligations hereunder.
(b) This Agreement has been duly and validly authorized by such H&F
Purchaser and such H&F Purchaser has taken all necessary and appropriate
action to execute and deliver this Agreement and to perform its obligations
hereunder.
(c) This Agreement has been duly executed and delivered by such H&F
Purchaser and, assuming due authorization and valid execution and delivery
by the Company, is a valid and binding obligation of such H&F Purchaser,
enforceable against it in accordance with its terms.
Section 2.4. Representations and Warranties of GE. Each GE Purchaser
represents and warrants to each other party hereto as follows:
(a) Such GE Purchaser has been duly formed and is validly existing
under the laws of its respective jurisdiction of formation and has all
necessary power and authority to enter into this Agreement and to carry out
its obligations hereunder.
(b) This Agreement has been duly and validly authorized by such GE
Purchaser and such GE Purchaser has taken all necessary and appropriate
action to execute and deliver this Agreement and to perform its obligations
hereunder.
(c) This Agreement has been duly executed and delivered by such GE
Purchaser and, assuming due authorization and valid execution and delivery
by the Company, is a valid and binding obligation of such GE Purchaser,
enforceable against it in accordance with its terms.
Section 2.5. Representations and Warranties of Trident. Each Trident
Purchaser represents and warrants to each other party hereto as follows:
(a) Such Trident Purchaser has been duly formed and is validly
existing under the laws of its respective jurisdiction of formation and has
all necessary power and authority to enter into this Agreement and to carry
out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by such
Trident Purchaser and such Trident Purchaser has taken all necessary and
appropriate action to execute and deliver this Agreement and to perform its
obligations hereunder.
(c) This Agreement has been duly executed and delivered by such
Trident Purchaser and, assuming due authorization and valid execution and
delivery by the
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Company, is a valid and binding obligation of such Trident Purchaser,
enforceable against it in accordance with its terms.
Section 2.6. Representations and Warranties of Farallon. Each Farallon
Purchaser represents and warrants to each other party hereto as follows:
(a) Such Farallon Purchaser has been duly formed and is validly
existing under the laws of its respective jurisdiction of formation and has
all necessary power and authority to enter into this Agreement and to carry
out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by such
Farallon Purchaser and such Farallon Purchaser has taken all necessary and
appropriate action to execute and deliver this Agreement and to perform its
obligations hereunder.
(c) This Agreement has been duly executed and delivered by such
Farallon Purchaser and, assuming due authorization and valid execution and
delivery by the Company, is a valid and binding obligation of such Farallon
Purchaser, enforceable against it in accordance with its terms.
ARTICLE III
VOTING; BOARD REPRESENTATION
Section 3.1. Board of Directors. (a) The Company shall be managed by its
duly elected officers subject to the overall direction and supervision of the
Board. Each of Warburg and H&F shall, and shall cause its controlled Affiliates
to, vote all Voting Securities that such Investor and its controlled Affiliates
Beneficially Own and take any and all actions as may be reasonably necessary to
cause the provisions of this Section 3.1, including the election of the Warburg
Directors and H&F Directors, to be effectuated.
(b) Prior to the Closing, and as a condition to the Closing, the Company
shall use its best efforts to secure the resignation of a number of Directors
such that there remain seven Directors immediately following the Closing (the
"Pre-Closing Directors"), of whom at least two shall qualify as Nasdaq
Independent Directors. Immediately following the Closing, the size of the Board
shall be decreased such that the Board shall consist of nine Directors, and one
Director designated by Warburg, (the "Initial Warburg Director") and one
Director designated by H&F (the "Initial H&F Director") shall each be appointed
by the Board as a director to serve in such classes of Directors as may be
necessary to assure that each class in Directors is as near in equal in number
as possible and that the Initial Warburg Director and the Initial H&F Director
are distributed among different classes.
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(c) Effective as of 12:00 a.m. on the date immediately following the
Approval Date, the size of the Board shall be increased such that the Board
shall then and thereafter consist of 17 Directors (such number not to be
increased without the consent of Warburg and H&F) and (i) five individuals
designated by Warburg (together with the Initial Warburg Director, and any other
replacements or substitutions therefor, the "Warburg Directors"), and (ii) two
individual designated by H&F (together with the Initial H&F Director, and any
other replacements or substitutions therefor, the "H&F Directors") shall each be
appointed by the Board as a Director to serve in such classes of Directors as
may be necessary to assure that each class in Directors is as near in equal in
number as possible and that the Warburg Directors and the H&F Directors,
respectively, are distributed among different classes.
(d) Following the Approval Date, for so long as Warburg's Retained
Percentage is "x" as set forth in the table below, the slate of nominees
recommended by the Board to shareholders for election as directors of the
Company at each annual meeting of shareholders shall include such number of
individuals designated by Warburg, which together with the number of Warburg
Directors whose term is not scheduled to expire, is equal to the number set
forth opposite such Warburg's Retained Percentage in the table below:
Warburg's Retained Number of Nominees
Percentage
x > 75% 6
-
65% < x < 75% 5
-
55% < x < 65% 4
-
40% < x < 55% 3
-
25% < x < 40% 2
-
10% < x < 25% 1;
-
provided that, if the Approval Date has not occurred, for so long as Warburg's
Retained Percentage is equal to or exceeds 10%, at least one Warburg Director
shall be included in the slate of nominees recommended by the Board to
shareholders for election as directors of the Company at each annual general
meeting of shareholders at which a Warburg Director's term is scheduled to
expire. For so long as Warburg has the power to have at least two Directors
included in the slate of nominees recommended by the Board, power with respect
to one such Director shall be exercised by Warburg Pincus (Bermuda) Private
Equity VIII, L.P and power with respect to one such Director shall be exercised
by Warburg Pincus (Bermuda) International Partners, L.P.
(e) Following the Approval Date, for so long as H&F's Retained Percentage
is "x" as set forth in the table below, the slate of nominees recommended by the
Board to shareholders for election as directors of the Company at each annual
meeting of shareholders shall include such number of individuals designated by
H&F, which together with the number
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of H&F Directors whose term is not scheduled to expire, is equal to the number
set forth opposite such H&F's Retained Percentage in the table below:
H&F's Retained Number of Nominees
Percentage
x > 60% 3
-
35% < x < 60% 2
-
20% < x < 35% 1;
-
provided that, if the Approval Date has not occurred, for so long as H&F's
Retained Percentage is equal to or exceeds 20%, at least one H&F Director shall
be included in the slate of nominees recommended by the Board to shareholders
for election as directors of the Company at each annual general meeting of
shareholders at which an H&F Director's term is scheduled to expire. For so long
as H&F has the power to have at least one Director included in the slate of
nominees recommended by the Board, such power shall be exercised by HFCP IV
(Bermuda), L.P.
(f) Each of Warburg and H&F shall provide to the Company in a timely manner
all information required by Regulation 14A and Schedule 14A under the Exchange
Act with respect to each Warburg Director and each H&F Director, respectively.
(g) The Company shall use its best efforts (i) to cause a special meeting
of the Board to be called upon the request of at least three Directors and (ii)
to cause to be submitted, at the 2002 annual general meeting of the Company's
shareholders, a proposal to amend Bye-Law 20 of the Company to replace "by a
majority of the total number of Directors" with "by three Directors or a
majority of the total number of Directors (whichever is fewer)".
Section 3.2. Committees of the Board. The Company and the Investors agree
that (1) for so long as there is at least one Warburg Director on the Board,
each committee of the Board shall include at least one Warburg Director, and (2)
for so long as there is at least one H&F Director on the Board, each committee
of the Board shall include at least one H&F Director. The foregoing is subject
to any restrictions on service on the audit committee as may be applicable under
the rules of the National Association of Securities Dealers, Inc. or the SEC.
Section 3.3. Investor Protection Matters. Except as specifically set forth
herein, in accordance with the Company's Bye-laws, the Board shall act by the
vote of a majority of the Directors present at a meeting, and the required
quorum for a meeting of the Board shall be a majority of the whole Board.
Notwithstanding the foregoing, and except as specifically set forth in the
Subscription Agreement, (a) prior to the Approval Date, unless
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also approved by the Initial Warburg Director and the Initial H&F Director, and
(b) following the Approval Date, unless also approved by (i) at least one
Warburg Director, if at such time Warburg's Retained Percentage equals or
exceeds 25%, and (ii) at least one H&F Director, if at such time H&F's Retained
Percentage equals or exceeds 50%, the Company shall not (and shall not permit
any of its Subsidiaries to):
(1) amend, or propose to amend, its certificate of incorporation,
memorandum of association, bye-laws, or other organizational documents, or
amend, terminate or waive any provision under, the Subscription Agreement
or any other Agreement entered into in connection therewith;
(2) split, consolidate, combine, subdivide, redeem or reclassify its
share capital or other equity interests, or amend any term of the
outstanding securities of the Company or its Subsidiaries;
(3) declare, set aside, make or pay any dividend or other distribution
in respect of its share capital or other equity interests, or purchase or
redeem, directly or indirectly, any share capital or other equity interests
(other than (A) dividends by a Subsidiary of the Company to the Company or
a Subsidiary of the Company, and (B) dividends or other distributions by
any entity in which the Company or any Subsidiary owns a minority interest,
made in the normal course of business, consistent with past practice);
(4) other than (A) in respect of grants or exercises under the 1999
Long Term Incentive and Share Award Plan, the 1995 Long Term Incentive and
Share Award Plan and the Long Term Incentive Plan for New Employees, (B)
issuances of securities pursuant to the Subscription Agreement and the
Management Subscription Agreement, and (C) issuances of securities upon
conversion or exercise of securities issued pursuant to clause (B) or of
securities outstanding on the date hereof, issue, deliver or sell, or
authorize the issuance, delivery or sale of, any share capital of any
class, any equity interest, or any options, warrants, conversion or other
rights to purchase any such shares or equity interests, or any securities
convertible into or exchangeable for such shares or equity interests, or
issue or authorize the issuance of any other security in respect of or in
lieu of or in substitution for shares of capital or equity interests, or
enter into any agreements restricting the transfer of, or affecting the
rights of holders of, Common Shares, grant any preemptive or anti-dilutive
rights to any holder of any class of securities of the Company, or grant
registration rights with respect to any of the Company's securities;
(5) amend or waive any rights under any grants made under the Long
Term Incentive Plan for New Employees;
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(6) incur any indebtedness for borrowed money, guarantee any such
indebtedness or issue or sell any debt securities, in excess of $5,000,000
in the aggregate, or prepay or refinance any indebtedness for borrowed
money;
(7) engage in any Interested Party Transaction;
(8) acquire any assets or properties for cash or otherwise for an
amount in excess of $5,000,000 in the aggregate;
(9) acquire, whether by means of merger, stock or asset purchase,
joint venture or other similar transaction, any equity interest in, or all
or substantially all of the assets of any Person, or any business or
division of any Person;
(10) replace the independent auditors of the Company or make any
material change in any method of financial accounting or accounting
practice, except for any such change required by reason of a concurrent
change in U.S. generally accepted accounting principles;
(11) sell or otherwise dispose of assets material to the Company and
its Subsidiaries taken as a whole, except as specifically contemplated by
the Subscription Agreement;
(12) increase by 5% or more the annual base compensation of any
officer or key employee of the Company, or enter into or make any material
change in any severance contract or arrangement with any such officer or
key employee;
(13) consummate a complete liquidation or dissolution of the Company,
a merger or consolidation (A) in which the Company or any Subsidiary is a
constituent corporation or (B) with respect to which the Common Shares
would have the right to vote under applicable law, a sale of all or
substantially all of the Company's assets, or any similar business
combination; provided, however, that the foregoing shall not apply to any
merger or consolidation solely between or among wholly owned Subsidiaries
of the Company, other than any such transaction between Subsidiaries which
are considered "Core Insurance Operations" under Section E, and
Subsidiaries which are not considered "Core Insurance Operations";
(14) enter into any transaction involving in excess of $1,000,000, or,
if such transaction is in the ordinary course of business consistent with
past practice, $5,000,000;
(15) approve the annual plan, annual capital expenditure budget or the
five-year plan of the Company and its Subsidiaries, taken as a whole;
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(16) remove the Chief Executive Officer or Chairman of the Company, or
appoint a new Chief Executive Officer or Chairman of the Company; or
(17) enter into any agreement with respect to the foregoing; provided,
however, transactions solely between or among the Company and/or one or
more of its wholly owned Subsidiaries shall be excluded from clauses (6),
(8), (9), (11) and (14) (and from clause (17) to the extent relating to an
agreement with respect to a transaction excluded by this proviso), other
than any such transaction between Subsidiaries which are considered "Core
Insurance Operations" under Section E, and Subsidiaries which are not
considered "Core Insurance Operations". In addition, prior to the Approval
Date, and after the Approval Date for so long as the Warburg Directors and
the H&F Directors together constitute a majority of the Board, (i) the
notice for each meeting of the Board called by the Chairman of the Board,
the President of the Company, the Warburg Directors or the H&F Directors
shall include a list of topics to be discussed at the meeting (the
"Agenda") and (ii) the Board shall not act on any matter that is not within
the Agenda without the consent of at least one Warburg Director and at
least one H&F Director.
Nothing in this Section 3.3 shall grant either H&F or Warburg any right or
consent to the extent that such right would result in such party being deemed to
"control" an insurance subsidiary of the Company that is domiciled in any state
in the United States, where the exercise of such control would otherwise require
the prior approval of such state. In addition, the rights of Warburg and H&F set
forth in this Section 3.3 shall, in any event, terminate upon the mandatory
conversion of the Preference Shares under paragraph (g)(2) of the Certificate of
Designations for the Preference Shares (the "Mandatory Conversion Date") or the
earlier conversion of all Preference Shares in accordance with their terms.
Section 3.4. Voting. Each Investor agrees to vote all Voting Securities
Beneficially Owned by such Investor or by any controlled Affiliate of such
Investor in favor of (a) the proposals to be submitted for approval of the
shareholders of the Company at the special general meeting of the Company's
shareholders to be held in connection with the Transactions and (b) the
proposals to approve the grant to Xxxxxx Xxxxxxxx of 1,689,629 restricted shares
and the grant to Xxxx X. Xxxxxxxx of options to purchase 1,126,419 Common Shares
at $20.00 per share, which grants were made in connection with the Transactions,
which such proposals will be submitted for approval of the shareholders of the
Company at the 2002 annual general meeting of the Company's shareholders.
Section 3.5. Chairman of the Company. For so long as he is willing and able
to serve as the Chairman of the Company, Warburg and H&F agree to take such
actions as may be necessary to cause Xxxxxx Xxxxxxxx to be duly elected as
Chairman of the Company.
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Section 3.6. Certain Transactions. For a period of two years after the
Closing, except for transactions specifically contemplated by this Agreement,
the Related Agreements (as defined in the Subscription Agreement) or the
Purchased Securities, neither Warburg nor H&F nor any of their respective
Affiliates will, directly or indirectly, without the prior approval of a
majority of the Independent Directors: (a) acquire securities or assets from the
Company or any of its Subsidiaries, (b) engage in any "Rule 13e-3 transaction"
(as such term is defined in Rule 13e-3(a)(3) under the Securities Exchange Act
of 1934, as amended) involving the Company, or (c) engage in any other
transaction that would result in the compulsory acquisition of Common Shares.
The Company shall not agree to amend this Section 3.6, without the prior
approval of a majority of the Independent Directors. The Company, Warburg and
H&F shall endeavor to include at all times two Independent Directors on the
Board.
ARTICLE IV
REGISTRATION RIGHTS
Section 4.1. Demand Registrations. (a) Warburg may at any time following
the date hereof and on not more than five separate occasions in the aggregate
and not more frequently than once during any 180 day period, require the Company
to file a registration statement under the Securities Act in respect of all or a
portion of the Investor Shares then Beneficially Owned by Warburg or by any
other person that Beneficially Owns Investor Shares and who acquired such
Investor Shares in connection with such person's status as a partner in any
partnership in which Warburg or any of its Affiliates is the general partner
(all such Investor Shares, the "Warburg Registrable Shares") (provided that such
request covers Warburg Registrable Shares with a Market Value on the date of the
Demand Request of at least $25 million), by delivering to the Company a written
notice stating that such right is being exercised, specifying the number of
Common Shares to be included in such registration (the shares subject to such
request, the "Warburg Demand Shares") and describing the intended method of
distribution thereof (a "Warburg Demand Request"). Upon receiving a Warburg
Demand Request, the Company shall (1) provide written notice of the Warburg
Demand Request, pursuant to Section 4.3 hereof, to H&F and each other Investor,
(2) use reasonable efforts to file as promptly as reasonably practicable a
registration statement on such form as the Company may reasonably deem
appropriate providing for the registration of the sale of such Warburg Demand
Shares and any other Investor Shares to be included pursuant to Sections 4.3 and
4.4 hereof pursuant to the intended method of distribution and (3) after the
filing of an initial version of the registration statement, use reasonable
efforts to cause such registration statement to be declared effective under the
Securities Act as promptly as practicable after the date of filing of such
registration
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statement. Any Demand Registration filed pursuant to the request of Warburg may,
subject to the provisions of Section 4.4 below, include other Common Shares that
the Company is required to include in such registration statement by virtue of
existing agreements between the holders of such Common Shares and the Company
(the "Existing Registration Rights").
(b) H&F may at any time following the date hereof and on not more than five
separate occasions in the aggregate and not more frequently than once during any
180 day period, require the Company to file a registration statement under the
Securities Act in respect of all or a portion of the Investor Shares then
Beneficially Owned by H&F or by any other person that Beneficially Owns Investor
Shares and who acquired such Investor Shares in connection with such person's
status as a partner in any partnership in which H&F or any of its Affiliates is
the general partner (all such Common Shares, the "H&F Registrable Shares," and
together with the Warburg Registrable Shares, the "Registrable Shares")
(provided that such request covers H&F Registrable Shares with a Market Value on
the date of the Demand Request of at least $25 million), by delivering to the
Company a written notice stating that such right is being exercised, specifying
the number of Common Shares to be included in such registration (the shares
subject to such request, the "H&F Demand Shares") and describing the intended
method of distribution thereof (a "H&F Demand Request"). Upon receiving a H&F
Demand Request, the Company shall (1) provide written notice of the H&F Demand
Request, pursuant to Section 4.3 hereof, to Warburg and each other Investor, (2)
use reasonable efforts to file as promptly as reasonably practicable a
registration statement on such form as the Company may reasonably deem
appropriate providing for the registration of the sale of such H&F Demand Shares
and any other Investor Shares to be included therein pursuant to Section 4.3 and
4.4 hereof pursuant to the intended method of distribution, and (3) after the
filing of an initial version of the registration statement, use reasonable
efforts to cause such registration statement to be declared effective under the
Securities Act as promptly as practicable after the date of filing of such
registration statement. Any Demand Registration filed pursuant to the request of
H&F may, subject to the provisions of Section 4.4 below, include other Common
Shares that the Company is required to include in such registration statement by
virtue of the Existing Registration Rights.
(c) Notwithstanding anything in this Agreement to the contrary, the Company
shall be entitled to postpone and delay, for reasonable periods of time not to
exceed 60 consecutive days and in no event to exceed more than an aggregate of
90 days during any 360-day period (a "Blackout Period"), the filing or
effectiveness of any Demand Registration if the Board shall determine that any
such filing or the offering of any Registrable Shares would (1) in the good
faith judgment of the Board, impede, delay or otherwise interfere with any
pending or contemplated acquisition, corporate reorganization or other similar
material transaction involving the Company (each, a "Material Transaction"), (2)
based upon advice from the Company's investment banker or financial advisor,
adversely affect any pending or contemplated financing, offering or sale of any
class of securities by the Company, or (3) in
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the good faith judgment of the Board, require disclosure of material non-public
information (other than information relating to an event described in clauses
(1) or (2) above) which, if disclosed at such time, would be harmful to the best
interests of the Company and its shareholders. Upon notice by the Company to
each Investor of any such determination, such Investor shall keep the fact of
any such notice strictly confidential, and during any Blackout Period promptly
halt any offer, sale, trading or transfer by it or any of its Subsidiaries of
any Common Shares for the duration of the Blackout Period set forth in such
notice (or until such Blackout Period shall be earlier terminated in writing by
the Company) and promptly halt any use, publication, dissemination or
distribution of the Demand Registration, each prospectus included therein, and
any amendment or supplement thereto by it for the duration of the Blackout
Period set forth in such notice (or until such Blackout Period shall be earlier
terminated in writing by the Company) and, if so directed by the Company, will
deliver to the Company any copies then in its possession of the prospectus
covering such Registrable Shares.
(d) In case a Demand Registration has been filed, if a Material Transaction
has occurred, the Company may cause such Demand Registration to be withdrawn and
its effectiveness terminated or may postpone amending or supplementing such
Demand Registration for a reasonable period of time; provided, however, that in
no event shall a Demand Registration so withdrawn by the Company count for the
purposes of determining the number of Demand Registrations to which either
Warburg or H&F is entitled under Section 4.1(a) or (b).
(e) In connection with any underwritten offering under this Section 4.1,
the managing underwriter for such Demand Registration shall be jointly selected
by Warburg and H&F, provided that such managing underwriter shall be a
nationally recognized investment banking firm.
(f) Nothing in this Article IV shall affect or supersede any of the
transfer restrictions set forth in Article V hereof or any of the other
provisions of this Agreement.
Section 4.2. Shelf Registration. At the request of either Warburg or H&F,
the Company shall use reasonable best efforts to file a registration statement
on Form S-3, or any successor form thereto, covering the offering of Investor
Shares by all Investors (subject to the provisions of Section 5.2 hereof) on a
delayed or continuous basis (the "Shelf Registration Statement") to be effective
as soon as reasonably practicable following the Closing Date. Upon effectiveness
of the Shelf Registration Statement, the Company will use its reasonable best
efforts to keep the Shelf Registration Statement effective with the SEC until
such time the Investor Shares held by all Investors are freely tradable under
Rule 144(k) under the Securities Act. Notwithstanding the foregoing, the Company
may suspend the effectiveness of the Shelf Registration Statement during any
Blackout Period.
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Section 4.3. Piggy-Back Registration. If, at any time following the date
hereof, the Company proposes to register any Common Shares under the Securities
Act on its behalf or on behalf of any of its shareholders (including pursuant to
a Demand Registration), on a form and in a manner that would permit registration
of Common Shares (other than in connection with dividend reinvestment plans,
rights offerings or a registration statement on Form S-4 or S-8 or any similar
successor form), the Company shall give reasonably prompt written notice to each
Investor of its intention to do so. Upon the written election of any Investor (a
"Piggy-Back Request"), given within ten Business Days following the receipt by
such Investor of any such written notice (which election shall specify the
number of the Investor Shares intended to be disposed of by such Investor), the
Company shall include in such registration statement (a "Piggy-Back
Registration"), subject to the provisions of Section 4.4 hereof, such number of
the Investor Shares as shall be set forth in such Piggy-Back Request.
Section 4.4. Allocation of Shares to be Registered. In the event that the
Company proposes to register Common Shares in connection with an underwritten
offering and a nationally recognized investment banking firm selected by the
Company, or in the case of a Demand Registration selected by Warburg and H&F, to
act as managing underwriter thereof reasonably and in good faith shall have
advised the Company and each Investor in writing that, in its opinion, the
inclusion in the registration statement of some or all of the Investor Shares
sought to be registered in a Piggy-Back Request would adversely affect the price
or success of the offering, the Company shall include in such registration
statement such number of Common Shares as the Company is advised can be sold in
such offering without such an effect (the "Maximum Number") as follows and in
the following order of priority: (a) first, if such registration is not in
connection with a Demand Registration, such number of Common Shares, if any, as
the Company intended to be registered by the Company for its own account, or to
be registered pursuant to Existing Registration Rights, to the extent such
Existing Registration Rights so require; (b) second, if and to the extent that
the number of Common Shares to be registered under clause (a) is less than the
Maximum Number (or because the registration is a Demand Registration, in which
case the Company is not permitted to offer Common Shares), such number of
Investor Shares as Warburg, H&F, Trident, Farallon and GE (and, to the extent
required by any Existing Registration Rights, any other holder of Common Shares
having such rights) shall have intended to register which, when added to the
number of Common Shares to be registered under clause (a), is less than or equal
to the Maximum Number, it being understood that the number of shares included by
Warburg, H&F, Trident, Farallon and GE (and such other holders under Existing
Registration Rights) shall be cut back, if necessary, in proportion to their
relative ownership at the time; and (c) third, if and to the extent that the
number of Common Shares to be registered under clause (b) is less than the
Maximum Number, such number of Investor Shares as the Participating Investors
(other than Warburg, H&F, Trident, Farallon and GE (and such other holders under
Existing Registration Rights)) shall have intended to register which, when
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added to the number of Common Shares to be registered under clauses (a) and (b),
is less than or equal to the Maximum Number, it being understood that the number
of shares included by the Participating Investors (other than Warburg, H&F,
Trident, Farallon and GE (and such other holders under Existing Registration
Rights)) shall be cut back, if necessary, in proportion to their relative
ownership.
Section 4.5. Registration Procedures. (a) In connection with each
registration statement prepared pursuant to this Article IV, and in accordance
with the intended method or methods of distribution of the Investor Shares as
described in such registration statement, the Company shall, as soon as
reasonably practicable and to the extent practicable:
(1) prepare and file with the SEC a registration statement on an
appropriate registration form and use reasonable efforts to cause such
registration statement to become and remain effective as promptly as
reasonably practicable; provided that before filing a registration
statement or prospectus or any amendments or supplements thereto, the
Company shall furnish to counsel to H&F and Warburg, if disposing of
Registrable Shares under such registration statement, draft copies of all
such documents proposed to be filed at least five days prior to such
filing, which documents will be subject to the reasonable review of each of
H&F and Warburg, as appropriate, and its agents and representatives;
(2) furnish without charge to each Investor seeking to dispose of
Investor Shares thereunder (each, a "Participating Investor"), and the
managing underwriter or underwriters, if any, at least one conformed copy
of the registration statement and each post-effective amendment or
supplement thereto (but excluding schedules, all documents incorporated or
deemed incorporated therein by reference and all exhibits, unless requested
in writing by such Participating Investor or such underwriter) and such
number of copies of the summary, preliminary, final, amended or
supplemented prospectuses included in such registration statement as such
Participating Investor or such underwriter may reasonably request;
(3) except with respect to a Shelf Registration Statement, the
obligations of the Company with respect to the effectiveness thereof to be
governed by Section 4.2, use reasonable best efforts to keep such
registration statement effective for the earlier of (A) 180 days and (B)
such time as all of the securities covered by the registration statement
have been disposed (the "Effective Period"); prepare and file with the SEC
such amendments, post-effective amendments and supplements to the
registration statement and the prospectus as may be necessary to maintain
the effectiveness of the registration for the Effective Period and to cause
the prospectus (and any amendments or supplements thereto) to be filed;
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(4) use reasonable efforts to register or qualify the Investor Shares
covered by such registration statement under such other securities or "blue
sky" laws of such jurisdictions in the United States as are reasonably
necessary, keep such registrations or qualifications in effect for so long
as the registration statement remains in effect, and do any and all other
acts and things which may be reasonably necessary to enable each
Participating Investor or any underwriter to consummate the disposition of
the Investor Shares in such jurisdictions;
(5) use reasonable efforts to cause the Investor Shares to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable each Participating Investor to
consummate the disposition of the Investor Shares;
(6) use reasonable efforts to cause all Investor Shares covered by
such registration statement to be listed on the Nasdaq or on the principal
securities exchange on which the Common Shares are then listed;
(7) promptly notify each Participating Investor and the managing
underwriter or underwriters, if any, after becoming aware thereof, (A) when
the registration statement or any related prospectus or any amendment or
supplement thereto has been filed, and, with respect to the registration
statement or any post-effective amendment, when the same has become
effective, (B) of any request by the SEC for amendments or supplements to
the registration statement or the related prospectus or for additional
information, (C) of the issuance by the SEC of any stop order suspending
the effectiveness of the registration statement or the initiation of any
proceedings for that purpose, (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Investor Shares to be registered for sale in any jurisdiction or the
initiation of any proceeding for such purpose or (E) within the Effective
Period of the happening of any event or the existence of any fact that
makes any statement in the registration statement or any post-effective
amendment thereto, prospectus or any amendment or supplement thereto, or
any document incorporated therein by reference untrue in any material
respect or which requires the making of any changes in the registration
statement or post-effective amendment thereto or any prospectus or
amendment or supplement thereto so that they will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(8) during the Effective Period, use its reasonable efforts to obtain
the withdrawal of any order enjoining or suspending the use or
effectiveness of the registration statement or any post-effective amendment
thereto;
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(9) deliver promptly to each of Warburg and H&F, if disposing of
Investor Shares under such registration statement, 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 of Warburg and H&F,
if disposing of Investor Shares under such registration statement, to do
such investigation, with respect to information contained in or omitted
from the registration statement, as it reasonably deems necessary;
(10) in the case of an underwritten offering, use best efforts to
enter into an underwriting agreement customary in form and scope for
underwritten secondary offerings of the nature contemplated by the
applicable registration statement;
(11) provide a transfer agent and registrar for all such Investor
Shares covered by such registration statement not later than the effective
date of such registration statement, subject to any applicable laws or
regulations; and
(12) cooperate with each Participating Investor and the managing
underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing such Investor Shares to be sold
under the registration statement; and, in the case of an underwritten
offering, enable such Investor Shares to be in such denominations and
registered in such names as the managing underwriter or underwriters, if
any, may request in writing at least two Business Days prior to any sale of
the Investor Shares to the underwriters.
(b) In the event that the Company would be required, pursuant to Section
4.5(a)(7)(E) above, to notify each Participating Investor or the managing
underwriter or underwriters, if any, of the happening of any event specified
therein, the Company shall, subject to the provisions of Section 4.1(c) hereof,
as promptly as practicable, prepare and furnish to each Participating Investor
and to each such underwriter a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Investor Shares that have been registered pursuant to this Agreement, such
prospectus shall not contain 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, in the light of the circumstances under which they were
made, not misleading. Each Participating Investor agrees that, upon receipt of
any notice from the Company pursuant to Section 4.5(a)(7)(E) hereof, it shall,
and shall use its reasonable best efforts to cause any sales or placement agent
or agents for the Investor Shares and the underwriters, if any, to, forthwith
discontinue disposition of the Investor Shares until such Person shall have
received copies of such amended or supplemented prospectus and, if so directed
by the Company, to destroy or to deliver to the Company all copies, other than
permanent file copies, then in its possession of the prospectus (prior to such
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amendment or supplement) covering such Investor Shares as soon as practicable
after such Participating Investor's receipt of such notice.
(c) Each Participating Investor shall furnish to the Company in writing its
intended method of distribution of the Investor Shares it proposes to dispose of
and such other information as the Company may from time to time reasonably
request in writing, but only to the extent that such information is required in
order for the Company to comply with its obligations under all applicable
securities and other laws and to ensure that the prospectus relating to such
Investor Shares conforms to the applicable requirements of the Securities Act.
Each Participating Investor shall notify the Company as promptly as practicable
of any inaccuracy or change in information previously furnished by such
Participating Investor to the Company or of the occurrence of any event, in
either case as a result of which any prospectus relating to the Investor Shares
contains or would contain 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, in light of the circumstances under which they were made,
not misleading, and promptly furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such prospectus shall not contain 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, in light of the circumstances under which they were
made, not misleading.
(d) In the case of any registration under Section 4.1 hereof pursuant to an
underwritten offering, or in the case of a registration under Section 4.3 hereof
if the Company has determined to enter into an underwriting agreement in
connection therewith, all Investor Shares to be included in such registration
shall be subject to the applicable underwriting agreement and no Person may
participate in such registration unless such Person agrees to sell such Person's
securities on the basis provided therein and completes and executes all
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) which must be executed in connection therewith, and
provides such other information to the Company or the underwriter as may be
reasonably requested to register such Person's Investor Shares.
Section 4.6. Registration Expenses. The Company shall bear all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, fees and expenses in connection with the review of underwriting
arrangements by the NASD Regulation, Inc. (including the fees of any "qualified
independent underwriter"), agent fees and commissions, printing costs and fees
and disbursements of its counsel, and of one counsel as may be reasonably
selected by Warburg and H&F on behalf of the Participating Investors, and
accountants, in each case, in connection with any registration and listing of
any Investor Shares pursuant to Section 4.1, 4.2 or 4.3, other than underwriting
discounts or
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commissions in connection with the Investor Shares disposed of by any
Participating Investor, which shall be borne by such Participating Investor.
Section 4.7. Indemnification; Contribution. (a) The Company shall, and it
hereby agrees to, indemnify and hold harmless each Participating Investor and
its partners, members, officers, directors, employees and controlling Persons,
if any, and each underwriter, its partners, officers, directors, employees and
controlling Persons, if any, in any offering or sale of Common Shares, against
any losses, claims, damages or liabilities to which each such indemnified party
may become subject, insofar as such losses, claims, damages or liabilities, or
actions or proceedings in respect thereof, including any amounts paid in
settlement as provided herein (collectively, "Claims"), arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement, or any preliminary or final prospectus
contained therein, or any amendment or supplement thereto, or any document
incorporated by reference therein, or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, and the Company shall,
and it hereby agrees to, reimburse each Participating Investor or any such
underwriter for any legal or other out-of-pocket expenses reasonably incurred by
it in connection with investigating or defending any such Claims; provided,
however, that the Company shall not be liable to any such Person in any such
case to the extent that any such Claims arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, or preliminary or final prospectus, or amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by such Participating Investor or any
underwriter expressly for use therein.
(b) Each Participating Investor shall, and hereby agrees to (1) indemnify
and hold harmless the Company, its directors, officers, employees and
controlling Persons, if any, and each underwriter, its partners, officers,
directors, employees and controlling Persons, if any, in any offering or sale of
Common Shares, against any Claims to which each such indemnified party may
become subject, insofar as such Claims arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, or any preliminary or final prospectus contained
therein, or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case only to
the extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Participating Investor expressly
for use therein, and (2) reimburse the Company for any legal or other
out-of-pocket expenses reasonably incurred by the Company in connection with
investigating or defending any such Claim.
-26-
(c) Promptly after receipt by an indemnified party under Section 4.7(a) or
Section 4.7(b) of written notice of the commencement of any action or proceeding
for which indemnification under Section 4.7(a) or Section 4.7(b) may be
requested, such indemnified party shall notify the indemnifying party in writing
of the commencement of such action or proceeding, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to any indemnified party in respect of such action or proceeding hereunder
unless the indemnifying party was materially prejudiced by such failure of the
indemnified party to give such notice, and in no event shall such omission
relieve the indemnifying party from any other liability it may have to such
indemnified party. In case any such action or proceeding shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall determine, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal or any other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. If the indemnifying party is not entitled to,
or elects not to, assume the defense of a claim, it will not be obligated to pay
the fees and expenses of more than one counsel for each indemnified party with
respect to such claim. The indemnifying party will not be subject to any
liability for any settlement made without its consent, which consent shall not
be unreasonably withheld or delayed. No indemnifying party shall, without the
prior written consent of the indemnified party, compromise or consent to entry
of any judgment or enter into any settlement agreement with respect to any
action or proceeding in respect of which indemnification is sought under Section
4.7(a) or Section 4.7(b) (whether or not the indemnified party is an actual or
potential party thereto), unless such compromise, consent or settlement includes
an unconditional release of the indemnified party from all liability in respect
of such claim or litigation and does not subject the indemnified party to any
material injunctive relief or other material equitable remedy.
(d) Each Participating Investor and the Company agree that if, for any
reason, the indemnification provisions contemplated by Sections 4.7(a) or 4.7(b)
hereof are unavailable to or are insufficient to hold harmless an indemnified
party in respect of any Claims referred to therein (other than as a result of
the provisos thereto), then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such Claims in
such proportion as is appropriate to reflect the relative fault of and benefits
derived by the indemnifying party, on the one hand, and the indemnified party,
on the other hand, as well as other equitable considerations. The amount paid or
payable by an indemnified party as a result of the Claims referred to above
shall be deemed to include (subject to the limitations set forth in Section
4.7(c) hereof) any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action,
pro-
-27-
ceeding or 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.
ARTICLE V
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS;
RESTRICTIONS ON TRANSFER AND CONVERSION
Section 5.1. Tag-Along Rights; Drag-Along Rights. (a) In the event that
Warburg, H&F or GE proposes to sell, convey, dispose or otherwise transfer
Initial Shares (such party proposing to sell, the "Selling Investor") in a bona
fide transaction to an un-Affiliated third party, or in a series of related bona
fide transactions to multiple un-Affiliated third parties, and the net proceeds
of such sale are reasonably expected to exceed $50 million (such a transaction,
or series of related transactions, a "Third Party Sale"), such Selling Investor
shall notify the other Investors having rights under this Section 5.1 (each such
other Investor, a "Tag-Along Investor") in writing of such Third Party Sale,
which notice shall set forth the material terms of such Third Party Sale,
including, without limitation, the number of Initial Shares proposed to be sold
and the per share price thereof (the "Third Party Sale Notice"). Such Tag-Along
Investor shall have the right, but not the obligation, to participate in such
Third Party Sale with respect to Initial Shares upon providing the Selling
Investor written notice of intent to exercise such right within ten Business
Days of the receipt of Third Party Sale Notice; provided, however, that (i) GE
shall have such rights only (A) if Warburg is the Selling Investor, or (B) if
H&F is the Selling Investor and Warburg shall have exercised its rights to
become at Tag-Along Investor under this Section 5.1, and (ii) Farallon shall
have such rights only (A) if H&F is the Selling Investor, or (B) if Warburg is
the Selling Investor and H&F shall have exercised its rights to become a
Tag-Along Investor under this Section 5.1. Such notice shall set forth the
number of Initial Shares that such Tag-Along Investor desires to sell in such
Third Party Sale, which such number shall not exceed that number of Initial
Shares equal to the product of (i) the number of Initial Shares set forth in the
Third Party Sale Notice, and (ii) the quotient of (A) the Retained Investment of
such Tag-Along Investor, over (B) the sum of (I) the Retained Investment of the
Selling Investor, and (II) the Retained Investment of all Tag-Along Investors.
Notwithstanding the foregoing, this Section 5.1 shall not be applicable to any
sale effected in the public markets (including by means of a "block trade"
effected through any registered broker-dealer), or to any distribution to
partners of any partnership in which either Warburg or H&F, or any of their
respective Affiliates, is the general partner.
-28-
(b) In the event that Warburg or H&F proposes to become a Selling
Investor under Section 5.1(a), Trident shall have the rights of a Tag-Along
Investor under Section 5.1(a).
(c) In the event that Warburg and/or H&F proposes to sell, convey, dispose
or otherwise transfer Initial Shares representing either 51% of the votes then
entitled to be cast in the election of directors, or 51% of the then outstanding
Common Shares (taking into account Common Shares issuable upon conversion of the
Preference Shares) in a transaction, or in a series of related transactions, to
a single Person or group, Warburg and H&F shall have the right to require that
Trident, and Trident shall have the obligation to, participate in such
transaction, up to a number of Initial Shares then Beneficially Owned by Trident
that shall not exceed that number of Initial Shares equal to the product of (i)
the number of Initial Shares proposed to be transferred, and (ii) the quotient
of (A) the Retained Investment of Trident, over (B) the sum of (I) the Retained
Investment of Warburg and H&F, and (II) the Retained Investment of Trident and
all other Investors participating in such sale.
(d) No Tag-Along Investor under this Sections 5.1 shall be required to
assume any responsibility for any indemnification obligations arising under such
Third Party Sale in excess of the proportion of the number of Initial Shares
sold by such party to the total number of Initial Shares sold in such Third
Party Sale; provided, however, that the limitation provided in this Section
5.1(d) shall not be applicable to any indemnification obligations resulting from
representations or warranties specifically relating to, and made by or on behalf
of, such party.
Section 5.2. Restrictions on Transfer. Until the earliest to occur of (a)
the first anniversary of the Closing, (b) the occurrence of any event that would
cause Company's outstanding Class B Warrants to vest and/or become exercisable,
or (c) the completion by the Company of a registered public offering of Common
Shares the net proceeds to the Company of which exceed $25 million, each of
Warburg, H&F, Farallon, GE and Trident, and each Management Purchaser, agrees
that it or he will not sell, dispose, convey or otherwise transfer any of such
Investor's Initial Shares if, following the consummation of such sale, the
Retained Percentage of such Investor would be less that 66%; provided, however,
that GE and Farallon shall have the right to sell, dispose, convey or otherwise
transfer Initial Shares to any GE Permitted Transferee or any Farallon Permitted
Transferee, respectively; provided, further, that such GE Permitted Transferee
or such Farallon Permitted Transferee, as the case may be, shall become a party
hereto and agree to be bound by the terms hereof. Following the earliest to
occur of clauses (a), (b) or (c) in the preceding sentence, there shall be no
restrictions on transfer of any Initial Shares, except as may be imposed by
applicable law, including by the Securities Act. Nothing in this Section 5.2
shall be deemed to affect any disposition of Initial Shares pursuant to the
terms of any merger, consolidation or other business combination transaction, or
to the tender of any Initial Shares into any tender or
-29-
exchange offer, provided, that such merger, consolidation or other business
combination has been approved by, or such tender or exchange offer has been
recommended to, the shareholders of the Company by, the Board.
Section 5.3. Restrictions on Conversion. Prior to the receipt of the
Requisite Nasdaq Approval, no Investor shall convert any Preference Share or
exercise any Class A Warrant, if the number of Common Shares to be issued to
such Investor upon such conversion or exercise, together with all Common Shares
issued upon prior conversions or exercise by such holder, would exceed such
Investor's Permissible Conversion Amount. An Investor's "Permissible Conversion
Amount" shall be a number of Common Shares equal to the product of (a) the total
number of Common Shares issuable to such Investor upon conversion or exercise of
all such Investor's Initial Shares, and (b) a fraction the numerator of which is
(i) (A) the lesser of (x) the product of .199 times the total number of Common
Shares issued and outstanding on November 19, 2001 and (y) the product of .199
times the total voting power of the Common Shares issued and outstanding on
November 19, 2001, minus (B) the 140,380 Common Shares issued on November 20,
2001, and the denominator of which is (ii) the total number of Common Shares
issuable upon conversion or exercise of all Initial Shares. Prior to the Receipt
of the Requisite Shareholder Approval, each holder of Preference Shares and
Class A Warrants issued under the Subscription Agreement or the Management
Subscription Agreement shall require any transferee of Preference Shares or
Class A Warrants to agree to this restriction, such that it applies to such
transferee as if such transferee had acquired such securities at Closing, and
attributing to such transferee a pro rata portion of any conversion or exercise
by the transferor, prior to such transfer. Prior to receipt of the Requisite
Regulatory Approval, no Investor shall convert any Preference Shares into Common
Shares or exercise any Class A Warrants unless all necessary approvals for such
ownership of Common Shares have been obtained, it being understood that, subject
to Section 5.2 hereof, this restriction on conversion and exercise shall not
restrict an Investor from converting or exercising and selling, or otherwise
disposing of, the shares received on conversion or exercise in such a manner as
would not result in violation of any applicable regulation. GE shall not convert
any Preference Shares, or exercise any Class A Warrant, until such time as any
required waiting period, including extensions thereof, under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, shall have
expired or been terminated.
-30-
ARTICLE VI
RESTRICTIONS ON DIVIDENDS AND SHARE REPURCHASES
The Company shall not declare any dividend or make any other distribution
on, or in respect of, any Common Shares, and shall not repurchase any Common
Shares, until such time as the Company has repurchased from Warburg and H&F, in
proportion to their respective Retained Investments at the time of such
repurchase, Initial Shares having an aggregate value of $250 million, at a per
share price acceptable to Warburg and H&F.
ARTICLE VII
EFFECTIVENESS AND TERMINATION
Section 7.1. Effectiveness. This Agreement shall take effect immediately
upon the Closing and shall remain in effect until it is terminated pursuant to
Section 7.2 hereof.
Section 7.2. Termination. Other than with respect to Article IV hereof and
with respect to the termination provisions specifically elsewhere set forth in
this Agreement as may be applicable to any particular Section of this Agreement,
this Agreement shall terminate upon the earliest to occur of the following:
(a) the tenth anniversary of the Closing; or
(b) mutual written agreement of the Company, Warburg and H&F at any
time to terminate this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Injunctive Relief. Each party hereto acknowledges that it
would be impossible to determine the amount of damages that would result from
any breach of any of the provisions of this Agreement and that the remedy at law
for any breach, or threatened breach, of any of such provisions would likely be
inadequate and, accordingly, agrees that each other party shall, in addition to
any other rights or remedies which it may have, be entitled to seek such
equitable and injunctive relief as may be available from any
-31-
court of competent jurisdiction to compel specific performance of, or restrain
any party from violating, any of such provisions. In connection with any action
or proceeding for injunctive relief, each party hereto hereby waives the claim
or defense that a remedy at law alone is adequate and agrees, to the maximum
extent permitted by law, to have each provision of this Agreement specifically
enforced against it, without the necessity of posting bond or other security
against it, and consents to the entry of injunctive relief against it enjoining
or restraining any breach or threatened breach of such provisions of this
Agreement.
Section 8.2. Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of and be enforceable by the Company, Warburg and
H&F, and for the purposes of such provisions hereof as may be indicated
immediately above the signatures of Farallon, GE, Trident and each Management
Purchaser, and their respective successors and permitted assigns, and no such
term or provision is for the benefit of, or intended to create any obligations
to, any other Person, except as otherwise specifically provided in this
Agreement. Neither this Agreement nor any rights or obligations hereunder shall
be assignable without the consent of each other party; provided, however, that
in connection with any sale or transfer by Warburg or H&F of any Investor
Shares, the transferee of such Investor Shares may become a party hereto solely
for purposes of Article IV and Sections 3.4, 5.2 and 5.3 hereof and have the
rights of, and be subject to the obligations of, an "Investor" upon due
execution and delivery of a counterpart signature page hereto. Notwithstanding
the foregoing, GE or Farallon may assign its rights hereunder to any GE
Permitted Transferee or any Farallon Permitted Transferee, respectively,
provided such GE Permitted Transferee or Farallon Permitted Transferee, as the
case may be, becomes a party hereto and agrees to be bound by the terms hereof.
Section 8.3. Amendments; Waiver. This Agreement may be amended only by an
agreement in writing executed by the parties hereto. Any party may waive in
whole or in part any benefit or right provided to it under this Agreement, such
waiver being effective only if contained in a writing executed by the waiving
party. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon breach thereof shall constitute a waiver of any
such breach or of any other covenant, duty, agreement or condition, nor shall
any delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.
Section 8.4. Notices. Except as otherwise provided in this Agreement, all
notices, requests, claims, demands, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
by hand, when delivered personally or by facsimile transmission if promptly
electronically confirmed, as follows, or as set forth on the signature page
executed by the any Investor:
-32-
If to Company:
Arch Capital Group, Ltd.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Warburg:
c/o Warburg, Xxxxxx Equity Partners, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to H&F:
c/x Xxxxxxx & Xxxxxxxx LLC
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
-33-
or to such other address, facsimile number or telephone as either party may,
from time to time, designate in a written notice given in a like manner.
Section 8.5. Applicable Law. Except to the extent of the applicability of
the Companies Law of Bermuda to this Agreement, this Agreement shall be governed
by and construed in accordance with the laws of the State of New York with
regard to contracts formed and to be entirely performed within such state
without giving effect to principles of conflicts of law.
Section 8.6. Headings. The descriptive headings of the several sections in
this Agreement are for convenience only and do not constitute a part of this
Agreement and shall not be deemed to limit or affect in any way the meaning or
interpretation of this Agreement. References to "Sections" and "Articles" herein
shall be to the Sections or Articles of this Agreement, unless the context
requires otherwise.
Section 8.7. Integration. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter.
Section 8.8. Severability. If any term or provision of this Agreement or
any application thereof shall be declared or held invalid, illegal or
unenforceable, in whole or in part, whether generally or in any particular
jurisdiction, such provision shall be deemed
-34-
amended to the extent, but only to the extent, necessary to cure such
invalidity, illegality or unenforceability, and the validity, legality and
enforceability of the remaining provisions, both generally and in every other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 8.9. Consent to Jurisdiction. In connection with any suit, claim,
action or proceeding arising out of this Agreement, the parties each hereby
consent to the in personam jurisdiction of the United States federal courts and
state courts located in the Borough of Manhattan, City of New York, State of New
York; the Company, Warburg and H&F each agree that service in the manner set
forth in Section 8.4 hereof shall be valid and sufficient for all purposes; and
the parties each agree o, and irrevocably waive any objection based on forum non
conveniens or venue, appear in any United States federal court or state court
located in the Borough of Manhattan, City of New York, State of New York.
Section 8.10. Counterparts. This Agreement may be executed by the parties
hereto in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the date set forth at the
head of this Agreement.
ARCH CAPITAL GROUP LTD.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and
General Counsel
HFCP IV (BERMUDA), L.P.
By: H&F Investors IV (Bermuda), L.P.,
its General Partner,
By: H&F Corporate Investors IV
(Bermuda) Ltd., its General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
H&F INTERNATIONAL PARTNERS
IV-A (BERMUDA), L.P.
By: H&F Investors IV (Bermuda), L.P.,
its General Partner,
By: H&F Corporate Investors IV
(Bermuda) Ltd., its General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
H&F INTERNATIONAL PARTNERS
IV-B (BERMUDA), L.P.
By: H&F Investors IV (Bermuda), L.P.,
its General Partner,
By: H&F Corporate Investors IV
(Bermuda) Ltd., its General Partner
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
H&F EXECUTIVE FUND IV
(BERMUDA), L.P.
By: H&F Investors IV (Bermuda), L.P.,
its General Partner,
By: H&F Corporate Investors IV
(Bermuda) Ltd., its General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
WARBURG PINCUS NETHERLANDS
INTERNATIONAL PARTNERS I, C.V.
By: Warburg, Xxxxxx & Co.,
its General Partner,
By: /s/ Xxxxxxx Xxx
---------------------------------------------
Name: Xxxxxxx Xxx
Title: Partner
WARBURG PINCUS NETHERLANDS
INTERNATIONAL PARTNERS II, C.V.
By: Warburg, Xxxxxx & Co.,
its General Partner,
By: /s/ Xxxxxxx Xxx
---------------------------------------------
Name: Xxxxxxx Xxx
Title: Partner
WARBURG PINCUS (BERMUDA)
INTERNATIONAL PARTNERS, L.P.
By: Warburg, Xxxxxx (Bermuda)
International Ltd.
its General Partner,
By: /s/ Xxxxxxx Xxx
---------------------------------------------
Name: Xxxxxxx Xxx
Title: Partner
WARBURG PINCUS (BERMUDA)
PRIVATE EQUITY VIII, L.P.
By: Warburg, Xxxxxx (Bermuda)
Private Equity Ltd.
its General Partner,
By: /s/ Xxxxxxx Xxx
---------------------------------------------
Name: Xxxxxxx Xxx
Title: Partner
For purposes of Articles
II, IV and V and Section
3.4 hereof:
TRIDENT II, L.P.
By: MMC Capital, Inc.,
as Manager
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Principal
Notice Information for
Trident II, L.P.:
c/x Xxxxxx and Calder Xxxxxx House
South Church Street
Xxxxxx Town Grand Cayman
Cayman Islands, British West Indies
Attention: Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
and
c/o MMC Capital, Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
For purposes of Articles
II, IV and V and Section
3.4 hereof:
XXXXX & MCLENNAN CAPITAL
PROFESSIONALS FUND, L.P.
By: MMC Capital, Inc.,
as Manager
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Principal
Notice Information for
Trident II, L.P.:
c/x Xxxxxx and Xxxxxx Xxxxxx House
South Church Street
Xxxxxx Town Grand Cayman
Cayman Islands, British West Indies
Attention: Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
and
c/o MMC Capital, Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
For purposes of Articles
II, IV and V and Section
3.4 hereof:
XXXXX & MCLENNAN EMPLOYEES'
SECURITIES COMPANY, L.P.
By: MMC Capital, Inc.,
as Manager
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Principal
Notice Information for
Trident II, L.P.:
c/x Xxxxxx and Xxxxxx Xxxxxx House
South Church Street
Xxxxxx Town Grand Cayman
Cayman Islands, British West Indies
Attention: Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
and
c/o MMC Capital, Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
For purposes of Articles
II, IV and V and Section
3.4 hereof:
FARALLON CAPITAL PARTNERS, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
Notice Information for Farallon Capital
Partners, L.P.:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx and
Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
For purposes of Articles
II, IV and V and Section
3.4 hereof:
FARALLON CAPITAL INSTITUTIONAL
PARTNERS II, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
Notice Information for Farallon Capital
Institutional Partners II, L.P.:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx and
Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
For purposes of Articles
II, IV and V and Section
3.4 hereof:
FARALLON CAPITAL INSTITUTIONAL
PARTNERS III, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
Notice Information for Farallon Capital
Institutional Partners III, L.P.:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx and
Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
For purposes of Articles
II, IV and V and Section
3.4 hereof:
RR CAPITAL PARTNERS, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
Notice Information for RR Capital Partners, L.P.:
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx and
Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
For purposes of Articles
II, IV and V and Section
3.4 hereof:
INSURANCE PRIVATE EQUITY
INVESTORS, L.L.C.
By: GE Asset Management Incorporated,
its Manager,
By: /s/ Xxxxxxx XxXxxxx
---------------------------------------------
Name: Xxxxxxx XxXxxxx
Title: Vice President
Notice Information for Insurance Private Equity
Investors, L.L.C.:
c/o GE Asset Management Incorporated
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
For purposes of Articles
II, IV and V and Section
3.4 hereof:
ORBITAL HOLDINGS, LTD.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Attorney-in-fact
Notice Information for Orbital Holdings, Ltd.:
c/o GE Capital
000 Xxxxxxxxx Xx.
Xxxxxxxx, XX 00000
For purposes of Article IV
and Sections 3.4, 5.2 and
5.3 hereof:
SOUND VIEW PARTNERS LP
By: Xxxxxx Xxxxxxxx,
its General Partner
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: General Partner
Notice Information for Sound View Partners LP:
c/o Arch Capital Group Ltd.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
For purposes of Article IV
and Sections 3.4, 5.2 and
5.3 hereof:
OTTER CAPITAL LLC
By: Xxxx Xxxxxxxx,
its Managing Member
By: /s/ Xxxx Xxxxxxxx
---------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Managing Member
Notice Information for Otter Capital LLC:
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
For purposes of Article IV
and Sections 3.4, 5.2 and
5.3 hereof:
XXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxx
Notice Information for Xxxxx X. Xxxxx:
c/o Arch Capital Group Ltd.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
For purposes of Article IV
and Sections 3.4, 5.2 and
5.3 hereof:
XXXX X. XXXXXX
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------
Name: Xxxx X. Xxxxxx
Notice Information for Xxxx X. Xxxxxx:
c/o Arch Reinsurance Ltd.
Xxxxx Xxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxxxx XX 00
Xxxxxxx
Xxxxxxxxx: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
For purposes of Article IV
and Sections 3.4, 5.2 and
5.3 hereof:
XXXXXX X. XXXXX
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Notice Information for Xxxxxx X. Xxxxx:
0 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
For purposes of Article IV
and Sections 3.4, 5.2 and
5.3 hereof:
MARC GRANDISSON
By: /s/ Marc Grandisson
---------------------------------------------
Name: Marc Grandisson
Notice Information Marc Grandisson:
c/o Arch Reinsurance Ltd.
Xxxxx Xxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxxxx XX 00
Xxxxxxx
Xxxxxxxxx: Marc Grandisson
Facsimile: (000) 000-0000
