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Exhibit 4.9
Certificate No. 8
ANY SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION, OR ANY PLEDGE
OR OTHER
ENCUMBRANCE, OF THIS WARRANT OR THE SHARES OF COMMON STOCK
UNDERLYING THIS
WARRANT (TOGETHER, THE "SECURITIES") IS RESTRICTED BY, AND THE
RIGHTS OF THE
HOLDER OF THE SECURITIES ARE SUBJECT TO, THE TERMS AND CONDITIONS
CONTAINED IN
THE SHAREHOLDERS AGREEMENT (AS DEFINED BELOW), AS IT MAY BE AMENDED
FROM TIME TO
TIME, AND THE BYE-LAWS OF THE COMPANY, WHICH ARE AVAILABLE FOR
EXAMINATION AT
THE REGISTERED OFFICE OF THE COMPANY. IN ADDITION TO THE FOREGOING
RESTRICTIONS,
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933
(THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY U.S. STATE OR
OTHER
JURISDICTION AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR
OTHERWISE DISPOSED
OF, OR PLEDGED OR OTHERWISE ENCUMBERED, EXCEPT IN ACCORDANCE WITH
AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND IN
ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR OTHER
JURISDICTION.
ALLIED WORLD ASSURANCE HOLDINGS, LTD
WARRANT TO PURCHASE 38,961 SHARES OF COMMON STOCK
(Subject to adjustment as provided herein)
(See signature page for notation regarding partial exercise)
FOR GOOD
AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, Allied World Assurance Holdings, Ltd, a limited
liability company
organized under the laws of Bermuda (including any successor
thereto, the
"Company"), hereby grants to Bridge Street Special Opportunities
Fund 2000, L.P.
or its registered assigns (the "Holder") a warrant (this "Warrant")
to purchase
Common Stock, par value U.S. $0.01 per share, of the Company
("Common Stock"),
which will include shares of Voting Common Stock, par value U.S.
$0.01 per
share, of the Company ("Voting Common Stock"), Non-Voting Common
Stock, par
value U.S. $0.01 per share, of the Company ("Non-Voting Common
Stock") or both,
upon the terms and conditions contained herein. All shares of
Common Stock,
including Voting Common Stock and Non-Voting Common Stock, that the
Holder is
entitled to purchase upon exercise of this Warrant are herein
called "Warrant
Shares". All terms that are used but not otherwise defined herein
and that are
defined in the Shareholders Agreement, dated as of November 21,
2001 and as it
may be amended from time to time, among the Company and the
shareholders party
thereto (the "Shareholders Agreement") shall have the meanings
given to them in
the Shareholders Agreement.
1. Right
to Purchase Common Stock. This Warrant may be exercised in
whole
or in part and from time to time on any one or more Exercise Dates,
in each case
upon payment of the Exercise Price (in any manner provided in
Section 6 hereof)
and for a number of Warrant Shares that does not exceed the
Exercise Amount.
Notwithstanding any provision hereof, the Exercise Price, the
Exercise Amount
(including the Specified Number) and the nature and amount of
Warrant Shares
that the Holder is entitled to acquire upon exercise of this
Warrant
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(in each case as such term is defined herein) shall be subject to
adjustment
from time to time as provided in Section 4 hereof, and all
references herein to
the Exercise Price, the Exercise Amount (including the Specified
Number) and
Warrant Shares shall be deemed to mean such terms after giving
effect to each
such adjustment, whether or not specific mention of such adjustment
is made in
connection with any such reference.
(a) Notwithstanding any provision hereof, except as set forth in
the
proviso to the third sentence of this paragraph, this Warrant may
not be
exercised unless a Trigger Event has occurred before the first
Exercise Date or
will occur on or promptly after the first Exercise Date. Once a
Trigger Event
has occurred as provided in the prior sentence, the requirement set
forth in the
prior sentence shall be fully satisfied and no further Trigger
Events shall be
required as a condition to any exercise of this Warrant. Either of
the following
shall be a "Trigger Event": (i) the Holder or any of its Affiliates
Transfers
Common Stock (or rights to acquire Common Stock, including any
partial Transfer
of this Warrant) to any Person other than an Affiliate of the
Holder or (ii) the
Company issues Common Stock (or rights to acquire Common Stock) to
any Person
other than the Holder and its Affiliates after the Closing Date,
other than an
issuance pursuant to the exercise of any rights to acquire Common
Stock that
were originally issued on the Closing Date; provided, however, that
no Trigger
Event shall be required for any exercise of this Warrant by a
Holder that either
(i) is not a Founder or an Affiliate of a Founder or (ii) is a
Founder, or an
Affiliate of a Founder, for which the Termination Time has occurred
pursuant to
Section 2.12(a)(i) of the Shareholders Agreement.
(b) An "Exercise Date" shall be any Business Day on or before
the
Final Exercise Date. The "Final Exercise Date" shall be November
21, 2011 unless
November 21, 2011 is not a Business Day, in which case the "Final
Exercise Date"
shall be the first Business Day after November 21, 2011. This
Warrant may be
exercised as provided herein until 12:01 A.M., New York City time,
on the first
day after the Final Exercise Date.
(c) With respect to each exercise of this Warrant, the
"Exercise
Price" shall equal U.S. $11.40 for each Warrant Share purchased
upon such
exercise and shall be payable to the Company in full upon such
exercise, by wire
transfer of immediately available funds or as otherwise provided in
Section 6(b)
hereof.
(d) (i) With respect to each exercise of this Warrant, the
"Exercise
Amount" shall be such number of Warrant Shares as the Holder elects
to purchase
upon such exercise, provided that, after giving effect to such
exercise (as well
as any Trigger Event occurring prior to, in connection with or
promptly after
such exercise as set forth in the next sentence), (A) the Holder's
Primary
Ownership Percentage shall not exceed the Relevant Percentage, (B)
the total
number of Warrant Shares purchased upon such and each prior
exercise of this
Warrant, taken together, shall not exceed 38,961 (the "Specified
Number") and
(C) such exercise shall not cause any Person to be in violation of
the Ownership
Limits set forth in Section 5.1 of the Shareholders Agreement. In
determining
whether the requirement in clause (A) above has been satisfied,
effect shall be
given to any Transfer of Warrant Shares, other Common Stock or
rights to acquire
Common Stock by the Holder or any of its Affiliates, any issuance
by the Company
of Common Stock or rights to acquire Common Stock (together with
any related
exercise of preemptive rights by any and all Shareholders) or any
other
transaction that has the effect of reducing the Holder's Primary
Ownership
Percentage, provided that, in each such case, such transaction
occurs prior to,
simultaneously with or promptly after such exercise (any such
transaction
specified in this sentence to which such effect is given, an
"Offsetting
Transaction"). If the Holder proposes to exercise this Warrant in
connection
with any Transfer by the Holder or
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any of its Affiliates in a Registered Public Offering or otherwise,
or in
connection with any other Offsetting Transaction, the Company, upon
request of
the Holder, shall use its reasonable best efforts to facilitate
such exercise at
a time that enables the Holder to maximize the Exercise Amount and
to include
any Warrant Shares acquired on exercise in any such Transfer
(subject to the
provisions of the Shareholders Agreement and the Bye-laws).
(ii) The "Primary
Ownership Percentage" of any Holder at any time
shall equal (A) the total number of common shares of the Company
that are owned
by such Holder and its Affiliates, in the aggregate, and are
outstanding at such
time, expressed as a percentage of (B) the total number of common
shares of the
Company that are outstanding at such time, in each case (A) and (B)
without
giving effect to any shares that may be issuable but that have not
been issued
at or prior to such time pursuant to any part of this Warrant which
has not been
exercised or any other rights to acquire common shares of the
Company. The
"Relevant Percentage" of any Holder with respect to any exercise of
this Warrant
shall be the greater of such Holder's Primary Ownership Percentage
immediately
prior to such exercise and (W) 23.4% if the Holder is an AIG Person
or any
Successor Founder of AIG, (X) 16.3% if the Holder is GSCP 2000, any
Affiliate
thereof or any Successor Founder of GSCP 2000, (Y) 18.7% if the
Holder is a
Chubb Person or any Successor Founder of Chubb or (Z) 9.09% if the
Holder is not
a Person described in clause (W), (X) or (Y) above. A "Successor
Founder" of any
Founder means any other Person that succeeds to such Founder's
status as a
Founder pursuant to the Shareholders Agreement, together with any
Affiliate of
such other Person.
(e) The Common Stock issued upon each exercise of this Warrant
shall
be Voting Common Stock to the maximum extent possible without such
exercise
causing any Person to exceed the Ownership Limits set forth in
Section 5.1 of
the Shareholders Agreement, and all other Common Stock (if any)
issued on such
exercise shall be Non-Voting Common Stock unless the Holder
requests Non-Voting
Common Stock in the Notice of Exercise, in which case the Common
Stock issued
upon such exercise shall be Non-Voting Common Stock at least to the
extent so
requested. In determining the maximum amount of Voting Common Stock
to be issued
upon any exercise of this Warrant, effect shall be given to any
Offsetting
Transaction.
(f) The Holder, in connection with an exercise of registration
rights in a Registered Public Offering, may elect, by so specifying
in the
Notice of Exercise, to condition such Holder's exercise of this
Warrant upon the
issued Warrant Shares being included in the offering (the
"Offering") giving
rise to such registration rights (a "Conditional Registration
Exercise"). In
such event, (i) the Holder will be permitted to sell Warrants, in
lieu of
Warrant Shares, to the underwriters of the Offering, which sale may
be
contingent upon the inclusion in the Offering of the underlying
Warrant Shares,
(ii) the Company will cause the Warrant exercise closing associated
with such
Conditional Registration Exercise and the delivery of the Warrant
Shares to be
concurrent with either the closing of the Offering or immediately
prior to such
closing and immediately following the Holder's delivery of this
Warrant (or
portion hereof) to the underwriter for such Offering, (iii) if the
number of
shares of Common Stock included in any Offering for sale by the
Holder is
reduced, then the exercise of this Warrant shall be deemed
rescinded as to a
number of Warrant Shares equal to the number of shares of Common
Stock excluded
from the Offering as a result of such reduction (or if such
excluded number
exceeds the total number of Warrant Shares, all such Warrant
Shares) (the
"Excluded Shares") and (iv) the Company shall not be required or
entitled to
issue any of the Excluded Shares. In the event of any such
rescission of the
exercise of this Warrant, this Warrant shall remain in full force
and effect as
if no Notice of Exercise had been delivered with respect to the
Excluded Shares.
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(g) The Holder, in connection with a bona fide tender or
exchange
offer for Common Stock (a "Tender Offer") made by the Company or
another Person
(the "Bidder"), may elect, by so specifying in the Notice of
Exercise, to
condition its exercise of this Warrant upon the issued Warrant
Shares being
accepted for purchase and purchased by the Bidder in such Tender
Offer (a
"Conditional Tender Offer Exercise"). In such event, and provided
the Transfer
of the Warrant Shares to the Bidder is made in compliance with
all
then-applicable restrictions on Transfer set forth in the
Shareholders
Agreement, (i) the Holder shall be permitted to condition exercise
of this
Warrant upon the acceptance for purchase and purchase of the
Warrant Shares
issuable on such exercise by the Bidder pursuant to the Tender
Offer, (ii) the
Company shall cause the Warrant exercise closing associated with
the Conditional
Tender Offer Exercise and delivery of the Warrant Shares to be
concurrent with
the closing of such Tender Offer (including by taking such steps as
are
reasonably necessary to enable the Warrant Shares to be tendered
into and
purchased in such Tender Offer) and (iii) if any Warrant Shares
tendered in any
Tender Offer are not accepted for purchase or purchased in such
Tender Offer,
then the exercise of this Warrant shall be deemed rescinded as to
the Warrant
Shares not accepted for purchase or not purchased and the Company
shall not be
required or entitled to issue any such Warrant Shares. In the event
of any such
rescission of the exercise of this Warrant, this Warrant shall
remain in full
force and effect as if no Warrant Notice had been delivered.
2. Warrant
Shares. Each Warrant Share purchased upon exercise of this
Warrant, after issuance thereof and payment of the Exercise Price
therefor,
shall be duly authorized, validly issued, fully paid and
non-assessable and
shall have the same rights and preferences as all other Common
Stock issued and
outstanding (with all Voting Common Stock, if any, and all
Non-Voting Common
Stock, if any, purchased upon exercise of this Warrant having the
same rights
and preferences as all other Voting Common Stock and Non-Voting
Common Stock,
respectively, issued and outstanding) on the Exercise Date.
3. No
Shareholder Rights. Except as otherwise provided in the
Shareholders
Agreement or the Bye-laws, the Holder shall not be entitled to any
voting or
other rights of a shareholder of the Company, either at law or in
equity, with
respect to any Warrant Shares as to which this Warrant has not been
exercised.
It is a condition to the purchase of Warrant Shares pursuant to
this Warrant
that the purchasing Holder (or, if the exercise and purchase are
made in
connection with a Transfer of this Warrant or Warrant Shares, that
the
Transferee) shall become (if it is not already) a party to the
Shareholders
Agreement as contemplated thereby; provided that no Transferee of
Warrant Shares
will be required to become a party to the Shareholders Agreement if
such Warrant
Shares are acquired in an Open Market Sale or are otherwise Freely
Transferable
Shares upon consummation of such Transfer. Nothing contained in
this Warrant
shall be construed as imposing any obligations or liabilities on
the Holder to
purchase any securities or as a shareholder of the Company, whether
such
obligations or liabilities are asserted by the Company or by the
creditors of
the Company or otherwise. Each certificate representing a Warrant
Share shall
bear any legend restricting transfer that is provided for by the
Shareholders
Agreement and the Bye-laws. The restrictions on Transfer, voting
requirements
and other provisions of the Shareholders Agreement and the
Bye-laws, to the
extent applicable by the terms thereof, shall apply to each Warrant
Share.
4.
Adjustment of Warrant. (a) (i) After every occurrence of an
Adjustment
Event, the Warrant Shares that the Holder may purchase upon each
exercise of
this Warrant effected after such occurrence shall be adjusted
proportionately so
that the Holder shall be entitled to receive upon each such
exercise the kind
and number of shares of capital stock, other securities, cash or
other property
(or any combination of the foregoing) that the Holder
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would have been entitled to receive in such Adjustment Event in
respect of all
the Warrant Shares that the Holder would have been entitled to
purchase upon
exercise of this Warrant in full (to the extent it remains
unexercised and
without regard to the limitations in Section 1(d)(i)(A) and (C)
hereof) at such
time, as if the Holder owned all such Warrant Shares immediately
prior to such
Adjustment Event or on any record date therefor (together with all
such Warrant
Shares to the extent they would remain outstanding and held by the
Holder
immediately after such event). In addition, whenever the Warrant
Shares that the
Holder may purchase on exercise of this Warrant are adjusted
pursuant to this
Section 4(a), the Exercise Price shall also be adjusted, by
multiplying the
Exercise Price in effect immediately prior to such adjustment by a
fraction, the
numerator of which shall be the maximum number of Warrant Shares
that may be
purchased upon exercise of this Warrant immediately prior to such
adjustment and
the denominator of which shall be the maximum number of Warrant
Shares that may
be purchased upon exercise of this Warrant immediately after such
adjustment (in
each case, without regard to the limitations in Section 1(d)(i)(A)
and (C)
hereof, and provided that appropriate adjustment of the fraction
shall be made
as necessary to reflect any difference in kind between the Warrant
Shares
reflected in the numerator and those reflected in the denominator).
Each
adjustment of the Exercise Amount and Exercise Price made pursuant
to this
Section 4(a) in respect of an Adjustment Event shall become
effective
immediately after the effective time of such event, retroactive to
any record
date therefor.
(ii) Each of the following events that occur on or after the
Closing
Date shall be an "Adjustment Event": (A) the Company pays a
dividend or makes
any other distribution with respect to any of its capital stock in
shares of
Common Stock such that the number of shares of Common Stock
outstanding is
increased; (B) the Company subdivides or splits its outstanding
shares of Common
Stock such that the number of shares of Common Stock outstanding is
increased;
(C) the Company combines its outstanding shares of Common Stock
into a smaller
number of shares of Common Stock; and (D) the reclassification
or
recapitalization of the Common Stock (including any
reclassification or
recapitalization in connection with a merger, amalgamation,
consolidation,
scheme of arrangement, sale of all or substantially all of the
assets of the
Company or other similar transaction) other than any
reclassification or
recapitalization that consists solely of a change in par value or
that involves
or occurs in connection with an issuance of shares or rights, a
Transaction or a
Spin-Off, if and to the extent that an adjustment is otherwise
effected in
respect thereof pursuant to Section 4(b), (c) or (d) hereof. Solely
for the
purpose of this Section 4, the term "Common Stock" shall mean (X)
the classes of
Common Stock consisting of the Voting Common Stock and the
Non-Voting Common
Stock on the Closing Date and (Y) any other class of capital stock
of the
Company resulting from successive changes or reclassifications of
such Common
Stock consisting solely of changes in par value.
(b) (i) If the Company issues to any Person or Persons any shares
of
Common Stock or any options, warrants or other rights (including
debt or other
securities convertible into or exchangeable for Common Stock)
entitling the
holders thereof to subscribe for, purchase or otherwise acquire
shares of Common
Stock, in either case at a price per share which, on the record
date for such
issuance (or if no record date is set for such issuance, on the
date of such
issuance), is lower than the Share Value on such date (to be
determined as
provided in Section 6(f) hereof, as if such date was an Exercise
Notice delivery
date for this purpose), the number of Warrant Shares thereafter
purchasable upon
the exercise of this Warrant shall be determined by multiplying the
number of
Warrant Shares purchasable upon exercise of this Warrant
immediately prior to
such adjustment by a fraction, (A) the numerator of which shall be
the sum of
the number of shares of Common Stock outstanding immediately prior
to such
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issuance plus the number of additional shares of Common Stock
issued or offered
for subscription, purchase or other acquisition pursuant to such
issuance of
rights and (B) the denominator of which shall be the sum of the
number of shares
of Common Stock outstanding immediately prior to such issuance plus
the number
of shares which the aggregate offering price (if any) o
