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Exhibit 10.1
FORM OF
AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT
OF
RAM HOLDINGS LTD.
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TABLE OF CONTENTS
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Page
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Section 1.
Definitions................................................
2
Section 2.
Registration Rights........................................
7
Section 3.
Proprietary Information....................................
20
Section 4.
Restrictive Legends........................................
21
Section 5.
Preemptive Right...........................................
21
Section 6.
Further Action.............................................
24
Section 7.
Term.......................................................
24
Section 8.
Amendments.................................................
24
Section 9.
Waiver and Consent.........................................
25
Section 10.
Recapitalization, Exchanges, etc...........................
25
Section 11.
Notices....................................................
25
Section 12.
Specific Performance.......................................
25
Section 13.
Severability...............................................
25
Section 14.
Binding Effect; Benefit; Parties in Interest...............
26
Section 15.
Interpretation.............................................
26
Section 16.
Counterparts...............................................
26
Section 17.
Applicable Law.............................................
26
Section 18.
Entire Agreement...........................................
27
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SHAREHOLDERS AGREEMENT
This Amended and Restated Shareholders Agreement (this "Amended
and
Restated Agreement"), dated as of , 2006, is among RAM HOLDINGS
LTD., a company
incorporated and organized under the laws of Bermuda ("Holdings")
and each of
the Shareholders (as defined in Section 1).
WITNESSETH
WHEREAS, Holdings, RAM HOLDINGS II LTD., a company incorporated
and
organized under the laws of Bermuda ("Holdings II"), and the
Shareholders
entered into that certain Shareholders Agreement, dated as of
February 11, 1998,
as amended December 11, 1998, July 2, 1999, November 18, 1999, June
12, 2002,
April 3, 2003 and April 26, 2005 (the "Base Shareholders
Agreement"), and the
parties hereto desire to amend and restate the Base Shareholders
Agreement in
its entirety;
WHEREAS, pursuant to its amalgamation with Holdings, Holdings II
no
longer holds shares in RAM Re;
WHEREAS, following the amalgamation with Holdings II and
subsequent
recapitalization of Holdings, the authorized share capital of
Holdings consists
of $______ consisting of _______ common shares, par value U.S.$0.10
per share
(the "Holdings Common Shares") and _______ preference shares, par
value U.S.
$0.10 per share; and
WHEREAS, each of the Shareholders desires to promote the interests
of
Holdings and the mutual interests of the Shareholders by
establishing herein
certain terms and conditions upon which the Holdings Common Shares
will be held,
including provisions providing certain registration rights with
respect to such
shares and providing for the designation of Board members and
certain other
matters.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, Holdings and the Shareholders
hereby agree as
follows:
Section 1. Definitions
As used in this Amended and Restated Agreement, the following
terms
shall have the respective meanings set forth below:
"Affiliate" shall mean, with respect to any specified Person, a
Person
that directly or indirectly Controls, is Controlled by or is under
common
Control with such Person. Without limiting the generality of the
foregoing, the
term "Affiliate" shall include an investment fund managed by such
Person or by a
Person that directly or indirectly Controls, is Controlled by or is
under common
Control with such Person.
"Above 10% Monoline Affiliate" shall have the meaning given such
term
in Section 3.
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"Amended and Restated Agreement" shall have the meaning given
such
term in the first paragraph hereof.
"Base Shareholders Agreement" shall have the meaning given such
term
in the first recital of this Amended and Restated Agreement.
"Board" shall mean the Board of Directors of Holdings.
"Business Day" shall mean any day except a Saturday, Sunday or
other
day on which banks in Hamilton, Bermuda, or The City of New York,
United States,
are authorized or obligated by law or executive order to close.
"Bye-laws" shall mean the Bye-laws of Holdings, as adopted by
Holdings
upon amalgamation on [___________], 2006.
"Code" shall mean the United States Internal Revenue Code of 1986,
as
amended, or any United States federal statute then in effect that
has replaced
such statute, and a reference to a particular section thereof shall
be deemed to
include a reference to the comparable section, if any, of any such
replacement
United States federal statute.
"Commission" shall mean the United States Securities and
Exchange
Commission or any other federal agency at the time administering
the Securities
Act or the Exchange Act.
"Control" of a Person shall mean (unless specifically indicated
otherwise) the possession, directly or indirectly, of the power to
direct or
cause the direction of the management and policies of such Person,
whether
through the ownership of voting securities, by contract or
otherwise, and
"Controlling" and "Controlled" shall have meanings correlative to
the foregoing.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as
amended, or any U.S. federal statute then in effect that has
replaced such
statute, and a reference to a particular section thereof shall be
deemed to
include a reference to the comparable section, if any, of any such
replacement
federal statute.
"Fair Market Value" shall have the meaning given such term in
Section
5(d).
"Governmental Authorization" means any approval, consent,
license,
permit, waiver or other authorization issued, granted, given or
otherwise made
available by or under, or any filing made with or other notice
given to, any
Governmental Body or pursuant to any Law.
"Governmental Body" means any (i) nation, state, county, city,
town,
village, district or other jurisdiction of any nature, (ii)
federal, state,
local, provincial, municipal, foreign or other government, (iii)
governmental or
quasi-governmental authority of any nature or (iv) other body
exercising any
statutory, administrative, executive, judicial, legislative,
police, regulatory
or taxing authority or power.
"Holdings" shall have the meaning given such term in the first
paragraph of this Amended and Restated Agreement.
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"Holdings II" shall have the meaning given such term in the
first
recital of this Amended and Restated Agreement.
"Holdings Common Shares" shall have the meaning given such term in
the
third recital of this Amended and Restated Agreement.
"Holdings II Common Shares" shall mean the Class A common shares,
par
value U.S.$1.00 per share, of Holdings II.
"Initial Public Offering" shall mean the completion, by
Holdings
and/or by any Shareholders, of an underwritten public offering of
shares of
Holdings pursuant to the registration statement on Form S-1
(333-131763)
initially filed under the Securities Act on February 10, 2006.
"Inspectors" shall have the meaning given such term in Section
2(e)(xi).
"Law" means any administrative or arbitrator's award or order,
constitution, law, ordinance, principle of common or civil law,
permit,
authorization, variance, regulation, rule, statue or requirement of
any
Governmental Body.
"NASD" shall mean the U.S. National Association of Securities
Dealers,
Inc. or any successor organization.
"NASDAQ" shall mean The Nasdaq National Market or any successor
quotation system.
"New Securities" shall have the meaning given such term in
Section
5(a).
"Offering" shall mean the offering and sale of up to 120,688
Holdings
Common Shares and 776,312 Holdings II Common Shares pursuant to the
several
Subscription Agreements.
"Other Holders" shall have the meaning given such term in
Section
2(a)(i).
"Person" shall mean an individual, company, corporation, firm,
limited
liability company, partnership, trust, estate or any other
business, entity or
person, whether or not recognized as constituting a separate legal
entity.
"PMI" shall mean PMI Mortgage Insurance Co., an Arizona
corporation,
or its parent, The PMI Group, Inc., a Delaware corporation, or any
successor
entity to either of them.
"Priority Securities" shall have the meaning given such term in
Section 2(b)(i).
"Proprietary Information" shall mean information relating to
the
specific business of RAM Re with any third-party ceding company
that may include
(x) any competitive pricing information, (y) any information
received from such
ceding company with respect to any insurance policies issued by
such ceding
company, the reinsurance of such policies and any transaction or
documents
underlying such policies or the reinsurance of such policies, or
(z) any
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provisions of any reinsurance agreements between the ceding company
and RAM Re
if RAM Re deems, in its reasonable judgment, that disclosure of
such information
would breach RAM Re's confidentiality obligations under any written
agreement
with such ceding company; provided that Proprietary Information
shall not
include, with respect to any Shareholder, any information that (i)
is generally
available to the public other than as a result of a disclosure by
such
Shareholder in violation of this Amended and Restated Agreement,
(ii) was within
such Shareholder's possession prior to its being furnished to any
employee or
officer of such Shareholder by or on behalf of Holdings or RAM Re
provided that
the source of such information was not known by such Shareholder to
be bound by
any contractual, legal or fiduciary obligations of confidentiality
to Holdings
or RAM Re with respect to such information, (iii) is available to
such
Shareholder from a source other than Holdings or RAM Re, provided
such source is
not known by such Shareholder to be bound by any contractual, legal
or fiduciary
obligations of confidentiality to Holdings or RAM Re with respect
to such
information or (iv) is developed independently by such Shareholder
other than
from Proprietary Information.
"Purchase Notice" shall have the meaning given such term in
Section
5(b).
"RAM Re" shall mean RAM Reinsurance Company Ltd., a Bermuda
financial
guaranty reinsurer of which Holdings owns all of the issued and
outstanding
common shares.
"Records" shall have the meaning given such term in Section
2(e)(xi).
"Registrable Securities" shall mean the Holdings Common Shares sold
in
the Offering or pursuant to the Subsequent Subscription Agreements,
Holdings
Common Shares acquired by a Shareholder pursuant to Section 3 of
the Base
Shareholders Agreement in each case that are owned by a Shareholder
on the date
of consummation of the Initial Public Offering or that the
Shareholder received
in connection with the exercise of its preemptive rights pursuant
to Section 5,
if applicable, and any securities of Holdings issued successively
in exchange
for or in respect of any of the foregoing, whether as a result of
any successive
stock split, subdivision, or reclassification of, or issuance of
bonus shares or
stock dividend on, any of the foregoing or otherwise; provided,
however, that
such securities shall cease to be Registrable Securities if and
when (i) a
registration statement with respect to the disposition of such
securities shall
have become effective under the Securities Act and such securities
shall have
been disposed of pursuant to such effective registration statement,
(ii) such
securities shall have been otherwise transferred, if new
certificates or other
evidences of ownership for such securities not bearing a legend
restricting
further transfer and not subject to any stop transfer order or
other
restrictions on transfer shall have been delivered by Holdings, and
subsequent
dispositions of such securities shall not require registration or
qualification
of such securities under the Securities Act, or (iii) such
securities shall have
ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to
Holdings'
performance of or compliance with its obligations under Section 2,
including,
without limitation, all Commission, NASD and stock exchange or
NASDAQ
registration and filing fees and expenses, fees and expenses of
compliance with
applicable state securities or "blue sky" laws (including, without
limitation,
reasonable fees and disbursements of counsel for the underwriters
in connection
with "blue sky" qualifications of the Registrable Securities),
printing
expenses, messenger and delivery expenses, fees and disbursements
of any
custodian, the fees and
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expenses incurred in connection with the listing of such securities
to be
registered on each securities exchange or automated quotation
system on which
such securities are listed, fees and disbursements of counsel for
Holdings and
all independent certified public accountants (including the
expenses of any
annual audit and "cold comfort" letters required by or incident to
such
performance and compliance), the fees and disbursements of
underwriters
customarily paid by issuers or sellers of securities (including the
fees and
expenses of any "qualified independent underwriter" required by the
NASD), the
reasonable fees of one counsel retained in connection with each
such
registration by the holders of a majority of the Registrable
Securities being
registered, the reasonable fees and expenses of any special experts
retained by
Holdings in connection with such registration, and fees and
expenses of other
Persons retained by Holdings (but not including any underwriting
discounts or
commissions or transfer taxes, if any, attributable to the sale of
Registrable
Securities by holders of such Registrable Securities other than
Holdings).
"Requesting Holders" shall have the meaning given such term in
Section
2(a)(i).
"securities" shall have the meaning given such term under the
Securities Act.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended, or any U.S. federal statute then in effect which has
replaced such
statute, and a reference to a particular section thereof shall be
deemed to
include a reference to the comparable section, if any, of any such
replacement
federal statute.
"Shareholder" shall mean any Member (as such term is defined in
the
Bye-laws) of Holdings that is a party to this Amended and Restated
Agreement.
"Subsequent Subscription Agreement" shall mean all and each of
the
Subscription Agreements dated on or after July 2, 1999, by and
among Holdings,
Holdings II and each of the Investors named therein.
"Subscription Agreement" shall mean all and each of the
Subscription
Agreements, dated as of various dates on or before February 11,
1998 and dated
as of December 11, 1998 among Holdings, Holdings II and each of the
Investors
(as defined therein), but shall not include any Subsequent
Subscription
Agreement.
"Subsidiary" shall mean any corporation, limited liability company
or
other Person of which shares of stock or other ownership interests
representing
more than 50% of the outstanding voting securities are, at the time
as of which
any determination is being made, owned by Holdings either directly
or through
its Subsidiaries, any partnership in which Holdings or any
Subsidiary is a
general partner and any joint venture in which Holdings or any
Subsidiary is a
joint venturer.
"United States" shall mean the United States of America and
dependent
territories or any part thereof.
"U.S." shall refer to the United States.
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"Voting Percentage" of PMI in Holdings shall mean, calculated at
any
particular point in time, the ratio, expressed as a percentage, of
(x) the
number of voting securities of Holdings held by PMI and its
Affiliates (with
voting securities representing less than one or more than one vote
constituting
a number of voting securities equal to the number of votes
represented by such
voting security) to (y) the total number of voting securities of
Holdings
outstanding at the relevant time (with voting securities
representing less than
one or more than one vote constituting a number of voting
securities equal to
the number of votes represented by such voting security).
Section 2. Registration Rights
Subject to obtaining all approvals required by Bermuda
governmental
authorities and subject to compliance with Section 39 of the
Bermuda Companies
Act 1981, as amended, (and, for the avoidance of doubt, no
obligation arises
hereunder unless and until the said approvals are received and the
requirements
of any of the exclusions or exemptions to the said Section 39 are
able to be
satisfied so as to permit compliance with the said Section 39) the
Shareholders
shall have the right to have their Registrable Securities
registered under the
Securities Act and applicable U.S. state securities laws in
accordance with the
following provisions.
(a) Registration on
Request.
(i) Holdings shall effect the registration under the Securities
Act for an underwritten public offering of all or part of the
Registrable
Securities held by the Requesting Holders (defined below) upon the
request of
(x) Shareholders holding in the aggregate a majority of all
outstanding
Registrable Securities, provided that such request shall be for not
less than
10% of outstanding Registrable Securities or (y) PMI or any of its
Affiliates
(such Shareholders referenced in (x) and (y) above being referred
to as the
"Requesting Holders"). Upon receipt of such request, Holdings will
promptly give
written notice to all other holders of Registrable Securities (the
"Other
Holders") that a request for registration has been received. For a
period of 15
calendar days following delivery of such notice, the Other Holders
may request
that Holdings also register their Registrable Securities and
Holdings may
determine to register its authorized and unissued securities. After
the
expiration of such 15 calendar day period, Holdings shall notify
all holders of
the number of Registrable Securities to be registered. Subject to
the provisions
of this Section 2, Holdings will use its best efforts to cause the
prompt
registration under the Securities Act of (A) the Registrable
Securities that the
Requesting Holders have requested Holdings to register, and (B) all
other
securities that Holdings has determined to register or that
Holdings has been
requested to register by the Other Holders, and in connection
therewith, subject
to Section 2(a)(iii), will prepare and file on such appropriate
form as Holdings
in its reasonable discretion shall determine a registration
statement under the
Securities Act to effect such registration.
Notwithstanding the foregoing, Holdings will not be required to
effect
the registration or file a registration statement in any of the
following
situations:
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(1) if the Registrable Securities to be offered pursuant to
such
request do not exceed 20% of the outstanding Registrable
Securities; provided
that this Section 2(a)(i)(1) shall not apply if one of the
Requesting Holders is
PMI or any of its Affiliates;
(2) in connection with the registration request by the
Requesting
Holders, the Registrable Securities to be offered pursuant to such
request do
not have an aggregate offering price of at least U.S. $25 million
(based on the
then current market price or offering price if Holding's Common
Shares are not
publicly traded);
(3) during any period (not to exceed 60 days with respect to
each
request) when Holdings has determined to proceed with a public
offering and, in
the judgment of the managing underwriter thereof, the requested
filing would
have an adverse effect on the public offering;
(4) during any period (not to exceed 60 days with respect to
each
request) when Holdings is in possession of material non-public
information that
the Board determines is in the best interest of Holdings not to
disclose
publicly; or
(5) to the extent required by the managing underwriter in an
underwritten public offering, during a period, not to exceed 180
days in the
case of the Initial Public Offering or 90 days in the case of all
other
offerings, following the effectiveness of any previous registration
statement
filed by Holdings.
The right of Holdings not to effect the registration or file a
registration statement pursuant to paragraphs (1), (2) and (3)
above may not be
exercised more than twice in any twelve-month period.
Requesting Holders holding a majority of the Registrable
Securities
requested to be registered may, at any time prior to the effective
date of the
registration statement relating to such registration, revoke such
request,
without liability to any of the other Requesting Holders or the
Other Holders,
by providing a written notice to Holdings revoking such
request.
(ii) Number of Registrations; Expenses. Holdings shall not be
obligated to effect more than four registrations of Registrable
Securities
pursuant to requests from Requesting Holders under this Section
2(a); provided,
however, that PMI or any of its Affiliates shall have the right to
request (A)
one additional registration of Registrable Securities provided that
it has
participated in only one of the original four registrations of
Registrable
Securities under this Section 2(a), or (B) two additional
registrations of
Registrable Securities provided that it did not participate in any
of the
original four registrations of Registrable Securities under this
Section 2(a).
Holdings shall pay all Registration Expenses in connection with a
registration
that the Requesting Holders request pursuant to this Section 2(a)
(which, for
the avoidance of doubt, shall not include underwriting discounts
and commissions
and transfer taxes, if any, relating to the sale or disposition of
any
Shareholder's Registrable Securities pursuant to this Section
2(a)).
(iii) Effective Registration Statement. A registration
requested
pursuant to this Section 2(a) shall not be deemed to have been
effected unless
the registration statement relating thereto (A) has become
effective under the
Securities Act and any of the
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Registrable Securities of the Shareholders included in such
registration have
actually been sold thereunder, and (B) has remained effective for a
period of at
least 180 days (or such shorter period in which all Registrable
Securities of
the Requesting Holders and, if applicable, Holdings and the Other
Holders
included in such registration have actually been sold thereunder);
provided,
however, that if either (x) any effective registration statement
requested
pursuant to this Section 2(a) is not carried out by reason of any
of the
situations noted in Section 2(a)(i) above under which Holdings will
not be
required to file or may delay filing a registration statement, or
(y) after any
registration statement requested pursuant to this Section 2(a)
becomes effective
(A) such registration statement is subject to any stop order,
injunction or
other order or requirement of the Commission or other governmental
agency or
court solely due to the actions or omissions to act of Holdings, or
(B) less
than 75% of all of the Registrable Securities included in such
registration have
been sold thereunder, or less than 75% of the Registrable
Securities of a
particular Requesting Holder or Other Holder included in such
registration have
been sold thereunder, then such registration statement shall not
constitute a
registration of Registrable Securities to be effected by Holdings
pursuant to
Section 2(a)(ii) and Holdings shall pay all the Registration
Expenses related
thereto.
(iv) Selection of Underwriters. Requesting Holders holding a
majority of the Registrable Securities requested to be registered
shall have the
right to select the investment banker and manager or co-managers
that will
administer the offering; provided, however, that such selection
shall be subject
to approval by Holdings, which approval shall not be unreasonably
withheld;
provided, further, that Holdings shall have the right to appoint a
co-manager
(who shall not be the lead manager) in all cases subject to the
approval of
Requesting Holders holding a majority of the Registrable Securities
requested to
be registered, which approval shall not be unreasonably
withheld.
(v) Pro Rata Participation in Requested Registrations. If the
lead managing underwriter of an offering pursuant to this Section
2(a) advises
Holdings, the Requesting Holders and the Other Holders in writing
that, in its
view, the number of equity securities requested to be included in
such
registration exceeds the largest number of securities which can be
sold without
having an adverse effect on such offering, including the price at
which such
securities can be sold, the number of Registrable Securities
requested to be
registered by the Requesting Holders and the Other Holders included
by Holdings
in such registration shall be allocated pro rata (subject to
adjustments for tax
considerations as provided in Subsection (C) below) among the
Requesting Holders
and the Other Holders on the basis of the relative number of shares
of
Registrable Securities owned by them; provided, however, that:
(A) if Holdings
intends to issue Registrable Securities and to
include them in such registration, Holdings' allocation
shall first be subject to reduction before the number of
Registrable Securities to be registered by the Requesting
Holders and the Other Holders is subject to any reduction;
(B) Requesting
Shareholders who become subject to a reduction
pursuant to this Section 2(a)(v) in the amount of
Registrable Securities to be included in a registration
statement may elect not
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to sell any Registrable Securities pursuant to the
registration statement; and
(C) the Board may,
with respect to any or all restrictions,
alter, amend or modify the allocation provisions contained
in this Section 2(a)(v) (other than the provisions in
Section 2(a)(v)(A)) if it determines in good faith that such
action would be likely to result in favorable tax treatment
or to avoid unfavorable tax treatment of Holdings or the
Shareholders; provided, however, that such action is applied
uniformly with respect to similarly situated Shareholders.
(b) Incidental
Registration.
(i) If Holdings at any time proposes to register any of its
shares or any options, warrants or other rights to acquire, or
securities
convertible into or exchangeable for, its shares (the "Priority
Securities")
under the Securities Act (other than a registration (A) relating to
shares
issuable upon exercise of employee share options or in connection
with any
employee benefit or similar plan of Holdings, (B) in connection
with an
acquisition by Holdings of another company, or (C) pursuant to
Section 2(a)) in
a manner which would permit registration of Registrable Securities
for sale to
the public under the Securities Act (whether or not for sale for
its own
account), it shall each such time, subject to the provisions of
Section
2(b)(ii), give prompt written notice to all holders of record of
Registrable
Securities of its intention to do so and of such Shareholders'
rights under this
Section 2(b), at least 30 calendar days prior to the anticipated
filing date of
the registration statement relating to such registration. Such
notice shall
offer all such Shareholders the opportunity to include in such
registration
statement such number of Registrable Securities as each such
Shareholder may
request. Upon the written request of any such Shareholder made
within 20
calendar days after the receipt of Holdings' notice (which request
shall specify
the number of Registrable Securities intended to be disposed of by
such
Shareholder), Holdings will use its best efforts to effect the
registration
under the Securities Act of all Registrable Securities that
Holdings has been so
requested to register by the Shareholders thereof; provided,
however, that (A)
if such registration involves an underwritten offering, all holders
of
Registrable Securities requesting to be included in Holdings'
registration must
sell their Registrable Securities to the underwriters selected by
Holdings on
the same terms and conditions as apply to Holdings, and (B) if, at
any time
after giving written notice pursuant to this Section 2(b)(i) of its
intention to
register any Priority Securities and prior to the effective date of
the
registration statement filed in connection with such registration,
Holdings
shall determine for any reason not to register such Priority
Securities,
Holdings shall give written notice to all holders of Registrable
Securities and
shall thereupon be relieved of its obligation to register any
Registrable
Securities in connection with such registration (without prejudice,
however, to
rights of Shareholders under Section 2(a)). If a registration
pursuant to this
Section 2(b) involves an underwritten public offering, any holder
of Registrable
Securities requesting to be included in such registration may
elect, in writing
prior to the effective date of the registration statement filed in
connection
with such registration, not to register such Registrable Securities
in
connection with such registration. No registration effected under
this Section
2(b) shall relieve Holdings of its obligations to effect a
registration upon
request under Section 2(a). Holdings shall pay all Registration
Expenses in
connection with each registration
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of Registrable Securities requested pursuant to this Section 2(b)
(which, for
the avoidance of doubt, shall not include underwriting discounts
and commissions
and transfer taxes, if any, relating to the sale or disposition of
any
Shareholder's Registrable Securities pursuant to a registration
statement
effected pursuant to this Section 2(b)).
(ii) Priority in Incidental Registrations. If a registration
pursuant to this Section 2(b) involves an underwritten offering and
the managing
underwriter advises Holdings in writing that, in its good faith
view, the number
of equity securities (including all Registrable Securities) that
Holdings and
the Shareholders intend to include in such registration exceeds the
largest
number of securities that can be sold without having an adverse
effect on such
offering, including the price at which such Registrable Securities
can be sold,
Holdings will include in such registration (A) first, all the
Priority
Securities to be sold for Holdings' own account; and (B) second, to
the extent
that the number of Priority Securities is less than the number of
Registrable
Securities that the underwriter has advised Holdings can be sold in
such
offering without having the adverse effect referred to above, as
many
Registrable Securities as are requested to be included in such
registration by
the Shareholders pursuant to Section 2(b)(i), provided, however,
that if the
number of Registrable Securities requested to be included in such
registration
by the Shareholders pursuant to Section 2(b)(i), together with the
number of
Priority Securities, exceeds the number that Holdings has been
advised can be
sold in such offering without having the adverse effect referred to
above, the
number of such Registrable Securities requested to be included in
such
registration by the Shareholders pursuant to Section 2(b)(i) shall
be allocated
pro rata among all Shareholders requesting registration on the
basis of the
relative number of Registrable Securities owned by them and
Shareholders subject
to such allocation may elect not to sell any Registrable Securities
pursuant to
the registration statement; provided, further, that the Board may,
with respect
to any or all restrictions, alter, amend or modify the allocation
provisions
contained in this paragraph if, in good faith, such action would be
likely to
result in favorable tax treatment or to avoid unfavorable tax
treatment of
Holdings or the Shareholders; provided, however, that such action
is applied
uniformly with respect to similarly situated Shareholders.
(iii) If Holdings at any time proposes to effect a public
offering in a jurisdiction other than the United States of any of
its shares or
any options, warrants or other rights to acquire, or securities
convertible into
or exchangeable for its shares (other than a public offering (A)
relating to
shares issuable upon exercise of employee share options or in
connection with
any employee benefit or similar plan of Holdings, or (B) in
connection with an
acquisition by Holdings of another company), Holdings and the
Shareholders will
have the rights and be subject to the obligations agreed in this
Section 2(b) to
the extent and where applicable.
(c) Holdback
Agreements.
(i) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, each holder of
Registrable
Securities that is proposing to sell Registrable Securities in such
public
offering agrees not to effect any sale or distribution, including
any private
placement or any sale pursuant to Rule 144A (or any successor
provision) or
otherwise or any sale pursuant to Rule 144 (or any successor
provision), under
the Securities Act, of any Registrable Securities, other than by
pro rata
distribution to its shareholders, partners or other beneficial
holders, and not
to effect any such sale or distribution of any other equity
-11-
<PAGE>
security of Holdings or of any security convertible into or
exchangeable or
exercisable for any equity security of Holdings (in each case,
other than as
part of such underwritten public offering) during the ten calendar
days prior
to, and to the extent required by the managing underwriter in an
underwritten
public offering, during a period, not to exceed 90 days, beginning
on the
effective date of such registration statement, without the consent
of the
managing underwriter of such offering, except as part of such
registration, if
permitted; provided, however, that each holder of Registrable
Securities has
received written notice of such registration at least two Business
Days prior to
the anticipated beginning of the ten calendar day period referred
to above.
(ii) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, Holdings agrees
(A) not to
effect any public sale or distribution of any of its equity
securities or of any
security convertible into or exchangeable or exercisable for any
equity security
of Holdings (other than any such sale or distribution of such
securities in
connection with any merger or consolidation by Holdings or any
Affiliate of
Holdings or the acquisition by Holdings or an Affiliate of Holdings
of the
shares or substantially all the assets of any other Person or in
connection with
an employee stock ownership or other benefit plan) during the ten
days prior to,
and to the extent required by the managing underwriter in an
underwritten public
offering, during a period, not to exceed 90 days, beginning on the
effective
date of such registration statement without the consent of the
managing
underwriters of such offering, and (B) that any agreement entered
into after the
date hereof pursuant to which Holdings issues or agrees to issue
any privately
placed equity securities shall contain a provision under which the
holders of
such securities agree not to effect any public sale or distribution
of any such
securities during the period and in the manner referred to in the
foregoing
clause (A), including a private placement pursuant to Rule 144A
under the
Securities Act (or any successor provision) or otherwise and any
sale pursuant
to Rule 144 under the Securities Act (or any successor provision),
except as
part of such registration, if permitted.
(d) Registration
Procedures.
In connection with any offering of Registrable Securities
registered
pursuant to this Section 2, Holdings shall use its best efforts to
obtain all
necessary permissions from the Bermuda governmental authorities and
shall:
(i)
Prepare and, upon obtaining all necessary permissions from
Bermuda governmental authorities, file with the Commission within
60 calendar
days after receipt of a request for registration, a registration
statement on
any form for which Holdings then qualifies and which counsel for
Holdings shall
deem appropriate, and which form shall be available for the sale of
the
Registrable Securities in accordance with the intended methods of
distribution
thereof, and use its best efforts to cause such registration
statement to become
and remain effective as provided herein; provided, however, that
before filing
with the Commission a registration statement
