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Section 1: 8-K (8-K)

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 30, 2017

 

 

 

FGL Holdings

(Exact name of registrant as specified in its charter)

 

 

 

Cayman Islands  001-37779  98-1354810
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

 

Sterling House

16 Wesley Street

Hamilton HM CX, Bermuda

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (800) 445-6758

 

Not Applicable

(Former name or former address, if changed since last report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Introductory Note

 

On November 30, 2017 (the “Closing Date”), FGL Holdings (formerly known as CF Corporation), a Cayman Islands exempted company (the “Company”), consummated the previously announced acquisition of Fidelity & Guaranty Life, a Delaware corporation (“FGL”), pursuant to the Agreement and Plan of Merger, dated as of May 24, 2017, as amended (the “Merger Agreement”), by and among CF Corporation, FGL US Holdings Inc., a Delaware corporation and indirect, wholly owned subsidiary of CF Corporation (“Parent”), FGL Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of Parent (“Merger Sub”), and FGL. The transactions contemplated by the Merger Agreement are referred to herein as the “Business Combination.”

 

Upon the consummation of the Business Combination, Merger Sub merged with and into FGL in accordance with the Delaware General Corporation Law, with FGL surviving the merger as an indirect, wholly owned subsidiary of the Company. In connection with the closing of the Business Combination (the “Closing”), the Company changed its name from CF Corporation to FGL Holdings. Unless the context otherwise requires, “FGL Holdings” and the “Company” refer to the registrant and its subsidiaries, including FGL and its subsidiaries, after the Closing, and “CF Corp.” refers to the registrant prior the Closing.

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Equity Purchase Agreements

 

As previously disclosed, on May 24, 2017, CF Corp. entered into equity commitment letters (collectively, the “Equity Commitment Letters”) with each of (i) Blackstone Tactical Opportunities Fund II L.P. (“BTO”), (ii) Fidelity National Financial, Inc. (“FNF”) and (iii) GSO Capital Partners LP (“GSO”).

 

Pursuant to the Equity Commitment Letters, (a) on November 29, 2017, the Company entered into equity purchase agreements with (i) CFS Holdings II (Cayman), L.P., a Cayman Islands limited partnership and indirect, wholly owned subsidiary of BTO (the “BTO Purchaser” and such agreement, the “BTO Equity Purchase Agreement”); and (ii) FNF and certain assignees and direct and indirect wholly owned subsidiaries of FNF (collectively, the “FNF Purchasers” and such agreements, the “FNF Equity Purchase Agreements”); and (b) on November 30, 2017, the Company entered into an investment agreement with certain funds advised by of GSO (the “GSO Purchasers”) and the FNF Purchasers (the “GSO/FNF Investment Agreement”).

 

Pursuant to the BTO Equity Purchase Agreement, the Company issued to the BTO Purchaser on the Closing Date an aggregate of 22,500,000 ordinary shares of the Company, par value $0.0001 per share (“ordinary shares”), for $10.00 per share, or an aggregate cash purchase price of $225 million. The Company also agreed to provide certain registration rights with respect to the ordinary shares issued pursuant to the BTO Equity Purchase Agreement.

 

Pursuant to the FNF Equity Purchase Agreements, the Company issued to the FNF Purchasers on the Closing Date an aggregate of 13,500,000 ordinary shares for $10.00 per share, or an aggregate cash purchase price of $135 million. The Company also agreed to provide certain registration rights with respect to the ordinary shares issued pursuant to the FNF Equity Purchase Agreements.

 

Pursuant to the GSO/FNF Investment Agreement, on the Closing Date, the Company issued (i) to the GSO Purchasers, 275,000 Series A Cumulative Convertible Preferred Shares (“Series A Preferred Shares”), $1,000 liquidation preference per share, for a cash purchase price of $275 million and, a fee for the commitment to purchase the Series A Preferred Shares of (A) the original issue discount on the issuance of such Series A Preferred Shares of $5.5 million, plus (B) $6.975 million plus (C) 6,138,000 ordinary shares, and (ii) to certain FNF Purchasers, 100,000 Series B Cumulative Convertible Preferred Shares (“Series B Preferred Shares”), $1,000 liquidation preference per share, for a cash purchase price of $100 million and, a fee for the commitment to purchase the Series B Preferred Shares of (A) the original issue discount on the issuance of such Series B Preferred Shares of $2.0 million, plus (B) $2.925 million plus (C) 2,232,000 ordinary shares.

 

 

 

 

The Series A Preferred Shares and the Series B Preferred Shares (together, the “preferred shares”) do not have a maturity date and are non-callable for the first five years. The dividend rate of the preferred shares is 7.5% per annum, payable quarterly in cash or additional preferred shares, at the Company’s option, subject to increase beginning 10 years after issuance based on the then-current three-month LIBOR rate plus 5.5%. In addition, commencing 10 years after issuance of the preferred shares, and following a failed remarketing event, GSO and FNF will have the right to convert their preferred shares into a number of ordinary shares of the Company as determined by dividing (i) the aggregate par value (including dividends paid in kind and unpaid accrued dividends) of the preferred shares that GSO or FNF, as applicable, wishes to convert by (ii) the higher of (a) a 5% discount to the 30-day volume weighted average of the ordinary shares following the conversion notice, and (b) the then-current Floor Price. The “Floor Price” will be $8.00 per share during the 11th year post-funding, $7.00 per share during the 12th year post-funding, and $6.00 during the 13th year post-funding and thereafter.

  

The foregoing description of the BTO Equity Purchase Agreement, the FNF Equity Purchase Agreements, and the GSO/FNF Investment Agreement are qualified in their entirety by reference to such agreements, which are filed as Exhibits 10.28, 10.29, 10.30, 10.31, 10.32, 10.33 and 10.34 hereto and incorporated by reference herein. The foregoing description of the terms of (i) the Series A Preferred Shares is qualified in its entirety by reference to the Certificate of Designations of the Series A Preferred Shares, which is filed as Exhibit 3.2 hereto and incorporated by reference herein, and (ii) the Series B Preferred Shares is qualified in its entirety by reference to the Certificate of Designations of the Series B Preferred Shares, which is filed as Exhibit 3.3 hereto and incorporated by reference herein.

 

Investment Management Agreements

 

On the Closing Date, Fidelity & Guaranty Life Insurance Company, an indirect, wholly owned subsidiary of the Company (“FGLIC”), entered into an investment management agreement (the “ FGLIC Investment Management Agreement”) with Blackstone ISG-I Advisors L.L.C., a Delaware limited liability company (the “Investment Manager”), and an indirect, wholly-owned subsidiary of The Blackstone Group L.P. (“Blackstone”), pursuant to which, on the terms and subject to the conditions set forth therein, FGLIC appointed the Investment Manager as investment manager of FGL’s general account (the assets in such account, including any assets held in the modified coinsurance account or other collateral arrangements established pursuant to the modified coinsurance agreement to be entered into between F&G Re Ltd., a reinsurance company organized under the laws of Bermuda (“Bermuda Re”), and together with all additions, substitutions and alterations thereto, are collectively referred to as the “FGL Account”), with discretionary authority to manage the investment and reinvestment of the funds and assets of the FGL Account in accordance with the investment guidelines specified in the FGLIC Investment Management Agreement. Under the FGLIC Investment Management Agreement, it is expected that FGLIC will pay the Investment Manager or its designee, from the assets of the FGL Account, the Management Fee which will equal 0.30% per annum 0.225% during the first calendar year of the agreement, pursuant to the waiver of fees by the Investment Manager described below of the Average Month-End Net Asset Value of the assets of the FGL Account being managed by the Investment Manager calculated and paid quarterly in arrears.

 

The FGLIC Investment Management Agreement is more fully described in CF Corp.’s definitive proxy statement filed with the U.S. Securities and Exchange Commission (the “SEC”) on July 26, 2017 (the “Proxy Statement”) relating to the extraordinary general meeting in lieu of annual general meeting of shareholders of the Company held on August 8, 2017 (the “Shareholders Meeting”) in the section entitled “Proposal No. 1—The Business Combination Proposal— Related Agreements—Investment Management Agreement,” which is incorporated by reference herein. Notwithstanding the description of the term of the FGLIC Investment Management Agreement in the Proxy Statement, the FGLIC Investment Management Agreement has no set term. Either party may terminate the FGLIC Investment Management Agreement upon thirty (30) calendar days’ prior written notice or such shorter period as the parties may agree in writing, subject to the terms of the Investment Management Agreement Termination Side Letter described below.

 

On the Closing Date, three subsidiaries of the Company in addition to FGLIC entered into investment management agreements with the Investment Manager on the same terms as the FGLIC Investment Management Agreement (the “Additional Investment Management Agreements” and collectively with the FGLIC Investment Management Agreement, the “Investment Management Agreements”). The descriptions of the Investment Management Agreement and the Additional Investment Management Agreements are qualified in their entirety by the terms and conditions of such agreements, which are filed as Exhibits 10.35, 10.36, 10.37 and 10.38 hereto and incorporated by reference herein.

 

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Sub-Advisory Agreement

 

On the Closing Date, the Investment Manager appointed MVB Management, a newly-formed entity owned by affiliates of the Company’s Co-Executive Chairmen, as Sub-Adviser of the FGL Account pursuant to a sub-advisory agreement (the “Sub-Advisory Agreement”). Under the Sub-Advisory Agreement, the Sub-Adviser will provide investment advisory services, portfolio review, and consultation with regard to the FGL Account (and the accounts of the other Company subsidiaries party to investment management agreements) and the asset classes and markets contemplated by the investment guidelines specified in the agreement, including such recommendations as the Investment Manager shall reasonably request. The Investment Manager will pay the Sub-Adviser, pursuant to the Subadvisory Agreement, a subadvisory fee of approximately 15% of certain fees paid to the Investment Manager and its affiliates pursuant to the investment management agreements. Payment or reimbursement of the subadvisory fee to the Sub-Adviser is solely the obligation of the Investment Manager and is not an obligation of FGLIC or the Company. Subject to certain conditions, the Sub-Advisory Agreement cannot be terminated by the Investment Manager unless FGLIC terminates the FGLIC Investment Management Agreement.

 

Investment Management Agreement Termination Side Letter

 

On the Closing Date, the Company entered into a side letter agreement (the “Investment Management Agreement Termination Side Letter”) with the Investment Manager, pursuant to which, on the terms and subject to the conditions set forth therein, the Company agreed to not cause, permit or suffer FGLIC to terminate the FGLIC Investment Management Agreement or certain other subsidiaries of the Company to terminate the Additional Investment Management Agreements with the Investment Manager to which such subsidiaries are parties, except following an initial three (3) year term, commencing on the dates of such agreements, and thereafter following each one year anniversary of the Closing Date (beginning on the third (3rd) anniversary of the Closing Date), and unless such agreements are terminated in accordance with the other terms and conditions of the Investment Management Agreement Termination Side Letter. After the initial three year term, FGLIC and the other subsidiaries party to the Additional Investment Management Agreement may provide the Investment Manager two years’ prior notice of an intention to terminate the Investment Management Agreement, if authorized by the Chief Executive Officer of the Company and at least two-thirds of the directors of the Company who are not current officers or employees of the Investment Manager or its corporate affiliates, provided that such persons acting reasonably and in good faith have determined that the Investment Manager’s unsatisfactory long term performance has been materially detrimental to the Company or that fees charged by the Investment Manager are unfair and excessive compared to those that would be charged by a comparable asset manager. The Investment Management Agreements further provide that the Investment Manager may during the two year notice period address the directors’ long term performance concerns or adjust the fees payable to the Investment Manager to be not higher than a comparable asset manager, either of which actions would result in the termination notice being automatically rescinded and of no further force or effect.

 

The description of the Investment Management Agreement Termination Side Letter included herein is qualified in its entirety by the terms and conditions of the Investment Management Agreement Termination Side Letter, which is filed as Exhibit 10.39 hereto and incorporated by reference herein.

 

BTO Letter Agreement; BTO/FNF Letter Agreement; Investment Management Agreement Fee Waiver

 

On the Closing Date, the Company entered into a letter agreement (the “BTO Letter Agreement”) with Blackstone Tactical Opportunities Advisors LLC (“BTO Advisors”), an affiliate of Blackstone. Such agreement stipulates that the Company will pay to BTO Advisors (or its designee(s)) $23 million in cash on the Closing Date for services rendered related to the transaction. Concurrently, the Company and the Investment Manager (which is an indirect, wholly-owned subsidiary of Blackstone) have agreed that the Investment Manager will forego approximately 30% of the first thirteen months’ management fee to which it is entitled under the Investment Management Agreement. Such amount is estimated to equal approximately $23 million in the aggregate, as calculated under the Investment Management Agreement.

 

The foregoing description of the BTO Letter Agreement is qualified in its entirety by the terms and conditions of the BTO Letter Agreement, which is filed as Exhibit 10.40 hereto and incorporated by reference herein.

 

Separately, on the Closing Date, the Company entered into a letter agreement (the “BTO/FNF Letter Agreement”) with BTO Advisors and FNF. Such agreement stipulates that BTO Advisors and FNF will provide at the Company’s request, from time to time from the Closing Date until December 31, 2018, general consulting services, access to BTO Advisor’s group purchase organization, financial advisory services, and advisory consulting services relating to potential mergers and acquisitions. In consideration for such services that may be rendered, the Company has agreed to pay, on a non-recurring basis, BTO Advisors (or its designee(s)) up to $10.0 million, payable in cash, ordinary shares, or warrants at the Company’s option and to FNF, up to $6.0 million payable in cash, ordinary shares, or warrants at the Company’s option. The actual amounts payable for such services shall be negotiated in good faith by the Company and the applicable party to provide such services when such services are rendered.

 

The foregoing description of the BTO/FNF Letter Agreement is qualified in its entirety by the terms and conditions of such agreement, which is filed as Exhibit 10.41 hereto and incorporated by reference herein.

 

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Nominating and Voting Agreement

 

On the Closing Date, the Company entered into a nominating and voting agreement (the “Nominating and Voting Agreement”) with William P. Foley, II, Chinh E. Chu and BTO (the “Voting Agreement Parties”).

 

Pursuant to the Nominating and Voting Agreement, if the Voting Agreement Parties and their respective affiliates own, in the aggregate, directly or indirectly, at least 20% of the issued and outstanding ordinary shares, the Voting Agreement Parties will have the right to designate one director nominee for election at each general meeting of the Company.

 

If the Voting Agreement Parties and their respective affiliates own, in the aggregate, directly or indirectly, at least 12% but less than 20% of the issued and outstanding ordinary shares (the “Two Director Range”), the Voting Agreement Parties will have the right to designate one director nominee for each of the two director classes (the “Two Director Classes”) to be voted on at the two general meetings of the Company immediately after the aggregate ownership of ordinary shares comes within the Two Director Range and for each subsequent meeting at which one of the Two Director Classes is to be voted on by the shareholders, provided that such aggregate ownership remains within the Two Director Range at the time of each such nomination.

 

If the Voting Agreement Parties and their respective affiliates own, in the aggregate, directly or indirectly, at least 5% but less than 12% of the issued and outstanding ordinary shares (the “One Director Range”), the Voting Agreement Parties will have the right to designate one director nominee for the class of directors (the “One Director Class”) to be voted on at the general meeting of the Company immediately after the aggregate ownership of ordinary shares comes within the One Director Range and for each subsequent meeting at which the One Director Class is to be voted on by the shareholders, provided that such aggregate ownership remains within the One Director Range at the time of each such nomination.

 

Director nominees selected under the Nominating and Voting Agreement will be selected by the vote of any two of Mr. Chu, Mr. Foley and BTO.

 

In addition, pursuant to the Nominating and Voting Agreement, each of Mr. Foley, Mr. Chu and BTO agreed to vote for each director so nominated. The Nominating and Voting Agreement is intended to preserve continuity of leadership of the founding sponsors and lead investor to preserve the FGL investment thesis and long term perspective upon which the Company was founded.

 

The foregoing description of the Nominating and Voting Agreement is qualified in its entirety by the terms and conditions of the Nominating and Voting Agreement, which is filed as Exhibit 10.42 hereto and incorporated by reference herein.

 

Senior Unsecured Revolving Credit Agreement

 

On the Closing Date, the Company’s wholly-owned subsidiaries, Fidelity & Guaranty Life Holdings, Inc., a Delaware corporation (“FGLH”), and CF Bermuda Holdings Limited, a Bermuda exempted limited liability company and a wholly owned direct subsidiary of the Company (“CF Bermuda” and together with FGLH, the “Borrowers” and each a “Borrower”), entered into a credit agreement (the “Credit Agreement”) with certain financial institutions party thereto, as lenders, and Royal Bank of Canada, as administrative agent and letter of credit issuer, which provides for a $250 million senior unsecured revolving credit facility with a maturity of three years; provided that the Borrowers will have the option to request extensions of the maturity date from lenders of loans made under the Credit Agreement in accordance with the terms and conditions set forth therein. The Credit Agreement provides a letter of credit sub-facility in a maximum amount of $20 million. The Borrowers are permitted to use the proceeds of the loans under the Credit Agreement for working capital, growth initiatives and general corporate purposes, as well as to pay fees, commissions and expenses incurred in connection with the Credit Agreement and the transactions contemplated thereby. Substantially concurrently with the closing of the Credit Agreement, the existing revolving credit agreement of FGLH, which agreement provided for a $150 million senior unsecured revolving credit facility, was refinanced in full and the commitments thereunder were terminated. Amounts borrowed under the Credit Agreement may be reborrowed until the maturity date or termination of commitments under the Credit Agreement. The Borrowers may increase the maximum amount of availability under the Credit Agreement from time to time by up to an aggregate amount not to exceed $50 million, subject to certain conditions, including the consent of the lenders participating in each such increase.

 

Loans under the Credit Agreement will bear interest, at the Borrower’s option, at a rate determined by reference to either a “base rate” or a “Eurodollar rate,” in each case plus an “applicable margin” equal to 1.50% to 2.0% for base rate loans or 2.5% to 3.0% for Eurodollar rate loans, which margin varies based upon the ratio of debt to total capitalization of CF Bermuda. For this purpose, the base rate means, for any day, a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 1/2 of 1%, (b) the prime rate in effect on such day, and (c) the Eurodollar rate for a period of one month beginning on such day plus 1.00% per annum; provided that, if such rate per annum is less than zero, the base rate will be deemed to be zero. The Eurodollar rate means, for any one, two, three or six month period (or such other period with the consent of each lender), as the Borrowers may elect, the greater of (a) 0.00% per annum and (b) the rate per annum obtained by dividing the London interbank offered rate by one minus the applicable reserve requirement. Interest payments under the Credit Agreement are payable, in the case of loans based on the base rate, quarterly, or, in the case of loans based on the Eurodollar rate, at the end of the applicable interest period but not less than once per three months.

 

The Borrowers are required to pay an undrawn commitment fee at a rate per annum equal to 0.375% to 0.50% based upon the ratio of debt to total capitalization of CF Bermuda of the undrawn portion of the commitments under the Credit Agreement computed on a daily basis. Payments of the undrawn commitment fee are payable quarterly in arrears on the last business day of each fiscal quarter.

 

The Borrowers have the right at any time to prepay any borrowings and to terminate the commitments, without premium or penalty, in whole or in part, subject to the terms and conditions of the Credit Agreement.

 

The Credit Agreement contains customary representations, warranties and covenants for a transaction of this type that, among other things, and, subject to certain exceptions set forth in the Credit Agreement, limit or restrict the Borrowers’ and Borrowers’ subsidiaries’ ability to incur additional indebtedness; incur or become subject to liens; dispose of assets; make investments, dividends or distributions or repurchases of certain equity interests or prepayments of certain indebtedness; enter into certain transactions with affiliates; undergo fundamental changes; enter into certain restrictive agreements; and change certain accounting policies or reporting practices. In addition, the Credit Agreement includes the following financial maintenance covenants: (a) minimum total shareholders’ equity of CF Bermuda and its consolidated subsidiaries at the end of each fiscal quarter of the sum of (i) the greater of (x) 70% of the total shareholders’ equity of CF Bermuda as of the Closing Date and (y) $1.19 billion plus (ii) 50% of the consolidated net income of CF Bermuda and its consolidated subsidiaries since the first day of the first fiscal quarter after the Closing Date plus (iii) 50% of all equity issuances of CF Bermuda after the Closing Date; (b) maximum debt to total capitalization ratio of CF Bermuda at the end of each fiscal quarter of 0.35 to 1.00 for CF Bermuda and its consolidated subsidiaries; (c) a minimum aggregate risk-based capital ratio of FGLIC, at the end of each fiscal quarter, of 300%; and (d) total shareholder’s equity of Bermuda Re, of 60% of the total shareholder’s equity of Bermuda Re, as measured after the capitalization of Bermuda Re in connection with the Merger and related transactions.

 

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The Credit Agreement contains customary events of default for a credit facility of this type, including non-payment of principal, interest, fees or other amounts due thereunder; misrepresentations; failure to comply with covenants (including the financial covenants in the preceding paragraph); cross default to certain material indebtedness of the Borrowers or their respective subsidiaries; change of control; invalidity of the loan documents; the entry of judgments against the Borrowers or their respective subsidiaries above a certain dollar threshold; the occurrence of certain ERISA-related events; and certain bankruptcy or insolvency events. If an event of default under the Credit Agreement occurs and is continuing, then the administrative agent shall, at the request of, or may, with the consent of, the lenders holding a majority of the aggregate loans, letter of credit risk participations and unused revolving commitments then outstanding under the Credit Agreement, declare the obligations under the Credit Agreement to be immediately due and payable, terminate the commitments thereunder and require cash collateralization of outstanding letters of credit; provided that the termination of commitments and acceleration of obligations and requirement to cash collateralize letters of credit will be automatic upon a bankruptcy or insolvency event of default of any Borrower, Bermuda Re, FGLIC or any guarantor which beneficially owns capital stock in any of CF Bermuda’s insurance subsidiaries.

 

All obligations under the Credit Agreement are unsecured and are guaranteed pursuant to the Guarantee Agreement (the “Guarantee Agreement”) by FGL, FGL US Holdings Inc., Fidelity & Guaranty Life Business Services and other subsidiaries of CF Bermuda that become guarantors pursuant to the terms of the Credit Agreement.

 

The descriptions of the Credit Agreement and the Guarantee Agreement are qualified in their entirety by the terms and conditions of the Credit Agreement and the Guarantee Agreement, which are filed as Exhibits 10.43 and 10.44 hereto, respectively, and incorporated by reference herein.

 

Certain of the lenders party to the Credit Agreement and their respective affiliates have, from time to time, performed various investments or commercial banking and financial advisory services for FGLH and its affiliates in the ordinary course of business, including Royal Bank of Canada, which is a lender and the administrative agent under the existing revolving credit facility and will receive proceeds from the repayment of the existing revolving credit facility.

 

Amended and Restated Indenture

 

On November 14, 2017, FGLH’s previously announced solicitation of consents (the “Consent Solicitation”) from holders of its 6.375% Senior Notes due 2021 (the “Notes”) to adopt certain amendments described below (the “Amendments”) to FGLH’s indenture, dated March 27, 2013, governing the Notes (“Original Indenture”) expired at 5:00 p.m., New York City time (the “Expiration Date”). As of the Expiration Date, holders of $296,637,000 aggregate principal amount of the Notes (representing approximately 98.88% of the total outstanding principal amount of the Notes), validly delivered and did not validly withdraw consents to the Amendments pursuant to the Consent Solicitation. FGLH accepted all such consents validly delivered pursuant to the Consent Solicitation prior to the Expiration Date, and on the Closing Date, FGLH paid a cash payment equal to $10.00 per $1,000 principal amount of Notes for such consents.

 

On November 20, 2017, FGLH executed an amended and restated indenture amending and restating the Original Indenture (the “A&R Indenture”) with the trustee and the guarantors party thereto that contains the Amendments. The A&R Indenture became effective upon execution thereof and constituted a binding agreement among FGLH, the guarantors party thereto and the trustee on the date of execution, and the A&R Indenture became operative immediately prior to the effectiveness of the merger on the date hereof.

 

The A&R Indenture effects the Amendments, which, among other things, include the following changes to the Original Indenture:

 

(a) amending the defined terms (i) “Change of Control” (to provide that the acquisition will not constitute a Change of Control), (ii) Consolidated Net Income” (to remove the requirement to meet an aggregate risk-based capital ratio in order to include the net income of insurance subsidiaries in Consolidated Net Income), (iii) “Consolidated EBITDA” (to permit the inclusion of all of the net income of insurance subsidiaries), (iv) “Permitted Holders” (to provide that FGL Holdings and certain affiliates and/or funds, as applicable, of Blackstone and GSO Capital Partners LP, among others, will each be a Permitted Holder after the Closing Date, as such term is used in the change of control provisions), (v) “Permitted Liens” (to permit liens securing indebtedness with respect to credit facilities in an amount not to exceed $175 million at any time outstanding), and (vi) “Permitted Transactions” (to expand the types of collateral that an insurance subsidiary may use to secure loans from a federal home loan mortgage bank);

 

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(b) amending (i) the reporting covenant to provide that, only with respect to the fiscal quarter in which the acquisition is consummated, FGLH will have 75 days (rather than 45 days) after the end of such quarter to furnish to the trustee quarterly unaudited financial statements, (ii) the limitation on indebtedness covenant to allow for debt to be issued under credit facilities in an aggregate principal amount not to exceed the greater of (x) $250 million and (y) 1% of the total consolidated assets of CF Bermuda, (iii) the covenant on restricted payments to reduce the size of restricted payment builder basket to $250 million and (iv) amending the covenant on affiliate transactions to increase the transaction consideration threshold requiring board of directors approval for affiliate transactions to $25 million (which is an increase from $15 million prior to the implementation of the Amendments) and to provide that the covenant on affiliate transactions will not apply to the payment of management, consulting, monitoring, transaction, advisory, termination and other fees, indemnities and expenses pursuant to any investment management agreement and certain investments by Permitted Holders; and

 

(c) adding certain other defined terms, permitting the acquisition and the other transactions contemplated by or in connection therewith and making certain conforming changes to the Original Indenture (including the form of the Notes therein).

 

In addition, the A&R Indenture adds CF Bermuda, Parent and FGL as guarantors (the “New Guarantees”) and makes such parties subject to the covenants of the A&R Indenture.

 

The foregoing description of the Amendments, the A&R Indenture and the New Guarantees is qualified in its entirety by reference to the A&R Indenture, which is filed as Exhibit 4.4 hereto and is incorporated herein by reference.

 

Convertible Note

 

On November 29, 2017, CF Corp. issued a convertible promissory note (the “Convertible Note”) to CF Capital Growth, LLC (the “Sponsor”) in the amount of $1,500,000 in respect of advances made by the Sponsor from time to time for CF Corp.’s ongoing expenses.

 

The Convertible Note was non-interest bearing and became payable upon the completion of the Business Combination. Under the terms of the Convertible Note, the Sponsor had the option to convert any amounts outstanding under the Convertible Note into warrants to purchase ordinary shares of the Company at a conversion price of $1.00 per warrant. On November 29, 2017, the Sponsor elected to convert all amounts outstanding under the Convertible Note, or an aggregate of $1,500,000, into 1,500,000 warrants (the “note warrants”). Each note warrant will entitle the Sponsor to purchase one ordinary share of the Company at an exercise price of $11.50 per share, commencing 30 days after the completion of the Business Combination, and will contain such other terms identical to the warrants purchased by the Sponsor in connection with CF Corp.’s initial public offering (the “private placement warrants”).

 

The issuance of the Convertible Note was made pursuant to the exemption from registration contained in Section 4(2) of the Securities Act of 1933.

 

The foregoing description of the Convertible Note is qualified in its entirety by reference to the Convertible Note, which is filed as Exhibit 10.45 hereto and is incorporated herein by reference.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

The disclosure set forth above under “Introductory Note” is incorporated by reference herein. The material provisions of the Merger Agreement are described in the Proxy Statement in the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement,” which is incorporated by reference herein.

 

As previously disclosed, the Business Combination was approved by CF Corp.’s shareholders at the Shareholders Meeting. Although CF Corp.’s public shareholders had the opportunity, in connection with the Business Combination, to redeem shares of CF Corp.’s Class A ordinary shares, no shares were redeemed.

 

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Upon the Closing, the Company paid $31.10, in cash, without interest, for each outstanding share of common stock of FGL (subject to certain exceptions), plus additional specified amounts in cash for outstanding equity incentives, for an aggregate purchase price of approximately $1.84 billion, plus approximately $405 million of existing FGL debt which was assumed.

 

In addition, on the Closing Date, Parent completed its purchase of all of the issued and outstanding shares of (i) Front Street Re (Cayman) Ltd., an exempted company incorporated in the Cayman Islands with limited liability and (ii) Front Street Re Ltd., an exempted company incorporated in Bermuda with limited liability (together, the “Acquired Companies”), from Front Street Re (Delaware) Ltd. (“FSRD”), a Delaware corporation and a wholly owned indirect subsidiary of HRG Group Inc. (“HRG”), pursuant to the Share Purchase Agreement, dated as of May 24, 2017, by and among CF Corp., Parent, FSRD and the Acquired Companies, for cash consideration of $65 million, subject to certain adjustments. Prior to the Business Combination, approximately 80% of the outstanding shares of FGL’s common stock was owned indirectly by HRG.

 

In addition, HRG, FS Holdco II Ltd. (“FS Holdco”), FGL’s majority stockholder prior to the Business Combination and a wholly owned subsidiary of HRG, CF Corp. and Parent agreed that FS Holdco may, at its option, cause Parent and FS Holdco to make a joint election under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended, with respect to the Business Combination and the deemed share purchases of FGL’s subsidiaries. If FS Holdco opts to make such an election, it will be required to pay Parent $30 million, plus additional specified amounts determined by reference to FGL’s incremental current tax costs attributable to the election, if any, and Parent will be required to pay FS Holdco additional specified amounts determined by reference to FGL’s incremental current tax savings attributable to the election, if any.

 

The Business Combination and related transactions (including the acquisition of the Acquired Companies) were funded by a portion of the funds held in the trust account that holds a portion of the net proceeds of CF Corp.’s initial public offering and a concurrent private placement of warrants to the Sponsor, plus the proceeds from equity issuances to (i) the BTO Purchaser, FNF Purchasers and the GSO Purchasers pursuant to the Equity Purchase Agreements as described above in Item 1.01, (ii) certain anchor investors pursuant to forward purchase agreements (both as defined below) as described below in Item 3.02 and (iii) certain ROFO Investors (as defined below) pursuant to additional Equity Purchase Agreements (as defined below) as described below in Item 3.02.

 

Prior to the Closing, CF Corp. was a shell company with no operations, formed as a vehicle to effect a Business Combination with one or more operating businesses. After the Closing, the Company became a holding company whose assets primarily consist of FGL and the Acquired Companies.

 

As of the Closing Date and following the completion of the Business Combination and related transactions, the Company’s outstanding securities were as follows: (a) 214,370,000 ordinary shares, (b) 275,000 Series A Preferred Shares, (c) 100,000 Series B Preferred Shares and (d) 70,883,335 warrants.

 

As of the Closing Date and following the completion of the Business Combination and related transactions, the ownership of the Company by the Company’s public shareholders, BTO, FNF, GSO, the investors under the forward purchase agreements and the ROFO Equity Purchase Agreements (the “Anchor Investors’) and the Company’s officers and directors was as follows:

 

Shareholder  Number of Ordinary
Shares
   Percentage of Total
Outstanding Shares
 
Public Shareholders (other than FNF)   66,000,000    30.9%
Anchor Investors (other than BTO, our directors and entities controlled by our directors)   57,778,118    27.0%
BTO   37,128,906    17.4%
Our Officers and Directors (and entities controlled by them)   30,592,976    14.3%
FNF   16,732,000    7.8%
GSO   6,138,000    2.9%
TOTAL   214,370,000    100%

 

The ownership percentages set forth above do not take into account (i) an aggregate of 375,000 of preferred shares that will be owned by GSO and FNF or (ii) the public warrants, private placement warrants, forward purchase warrants (as defined below) and note warrants that became outstanding upon the Closing and may be exercised thereafter, but do include the ordinary shares converted from Class B ordinary shares, par value $0.0001 per share, upon completion of the Business Combination even though such shares are subject to transfer restrictions.

 

 7 

 

 

The public warrants, private placement warrants, forward purchase warrants and note warrants will become exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

The Company makes and incorporates by reference forward-looking statements in this Current Report on Form 8-K. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements may include statements relating to:

 

·the benefits of the Business Combination;

 

·the future financial performance of the post-combination company following the Business Combination;

 

·expansion plans and opportunities; and

 

·other statements preceded by, followed by or that include the words “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

  

These forward-looking statements are based on information available as of the date of this Current Report on Form 8-K and the Company’s management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

·the inability to maintain the listing of the Company’s ordinary shares and warrants on the NYSE following the Business Combination;

 

·the risk that the Business Combination disrupts current plans and operations as a result of the announcement and consummation of the transactions described herein;

 

·the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably;

 

·costs related to the Business Combination;

 

·changes in applicable laws or regulations;

 

·the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and

 

·other risks and uncertainties indicated or incorporated by reference in this Current Report on Form 8-K, including those set forth in the “Risk Factors” section in the Proxy Statement and Part I, Item 1A of the FGL Annual Report, which are incorporated herein by reference.

 

Business

 

The business of CF Corp. prior to the Business Combination is described in Part I, Item 1 of CF Corp.’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 17, 2017 (the “CF Corp. Annual Report”), which is incorporated by reference herein. The business of FGL prior to the Business Combination is described in Part I, Item 1 of FGL’s Annual Report on Form 10-K for the year ended September 30, 2017, filed with the SEC on November 16, 2017 (the “FGL Annual Report”), which is incorporated by reference herein.

 

 8 

 

 

Risk Factors

 

The risk factors related to the Company’s business and operations are described in Part I, Item 1A of the FGL Annual Report and in Part II, Item 1A of CF Corp.’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, which is incorporated by reference herein. The risk factors related to the Business Combination are described in the section entitled “Risk Factors” in the Proxy Statement, which is incorporated by reference.

 

Properties

 

The properties of the Company are described in Part I, Item 2 of the FGL Annual Report, which is incorporated by reference herein.

 

Selected Historical Financial Information

 

The selected historical financial information of FGL is provided set forth in Part II, Item 6 of the FGL Annual Report, which is incorporated by reference herein.

 

Unaudited Pro Forma Condensed Combined Financial Information

 

The information set forth in Exhibit 99.2 to this Current Report on Form 8-K is incorporated by reference herein.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operation

 

Management’s discussion and analysis of financial condition and results of operations of FGL prior to the Business Combination is described in Part II, Item 7 of the FGL Annual Report, which is incorporated by reference herein.

 

Quantitative and Qualitative Disclosures about Market Risk

 

Quantitative and qualitative disclosures about market risk for FGL prior to the Business Combination is described in Part II, Item 7A of the FGL Annual Report, which is incorporated by reference herein.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information known to the Company regarding beneficial ownership of ordinary shares of the Company as of November 30, 2017 by:

 

·each person known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding ordinary shares;

 

·each of the Company’s executive officers and directors; and

 

·all executive officers and directors of the Company as a group.

 

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Ordinary shares issuable upon exercise of options or warrants currently exercisable or exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of class and percentage of total voting power of the beneficial owner thereof. 

 

The beneficial ownership of ordinary shares of the Company is based on 214,370,000 ordinary shares issued and outstanding as of November 30, 2017.

 

Unless otherwise indicated, the Company believes that each person named in the table below has sole voting and investment power with respect to all ordinary shares beneficially owned by him.

 

 9 

 

 

Directors and Officers(1)  Number of Shares
Beneficially Owned
   Percentage of Outstanding
Ordinary Shares
 
Chinh E. Chu(2) (3)   23,407,057    6.5 
William P. Foley, II(4) (3)   23,407,057    6.5 
Christopher J. Littlefield   -    - 
Dennis R. Vigneau   -    - 
Eric L. Marhoun   -    - 
Keith W. Abell(5)   220,970    * 
Patrick S. Baird   -    - 
Menes O. Chee   -    - 
Richard N. Massey(6)   2,139,706    * 
James A. Quella(7)   1,084,853    * 
Timothy M. Walsh   -    - 
All Executive Officers and Directors as a Group   50,259,641    14.27 
Greater than 5% Shareholders          
Blackstone (8)(3)   49,516,906    20.2 
Fidelity National Financial, Inc.(9)   18,232,000    7.8 
Coral Blue Investment Pte. Ltd.   14,767,945    5.8 

 

* Less than 1%.

 

(1) Except as described in the footnotes below and subject to applicable community property laws and similar laws, the Company believes that each person listed above has sole voting and investment power with respect to all ordinary shares beneficially owned by them. Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is Sterling House, 16 Wesley Street, Hamilton HM CX, Bermuda.
(2) Includes 13,840,390 shares and 9,566,667 warrants, each exercisable for one ordinary share, held by CC Capital Management LLC (“CCCM”). Mr. Chu is the managing member of CCCM and as such may be deemed to beneficially own all of the securities held directly by CCCM.  
(3) Pursuant to the Nominating and Voting Agreement, Mr. Chu, Mr. Foley and BTO have the right to designate one director nominee for election at each general meeting of the Company, which nominee will be selected by the vote of any two of Mr. Chu, Mr. Foley and BTO. Mr. Chu, Mr. Foley and BTO have agreed to vote all of their shares in favor of such nominee. As such, each of Mr. Chu, Mr. Foley and BTO may be deemed to be members of a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and each of the members may be deemed to beneficially own the shares of the other members.
(4) Includes 13,840,390 shares and 9,566,667 warrants, each exercisable for one ordinary share, held by BilCar, LLC (“BilCar”). Mr. Foley is a manager of BilCar and as such may be deemed to beneficially own all of the securities held directly by BilCar.
(5) Includes 187,637 ordinary shares and 33,333 warrants, each exercisable for one ordinary share.
(6) Includes 30,000 ordinary shares held by Mr. Massey and 1,806,373 ordinary shares and 333,333 warrants, each exercisable for one ordinary share, held by CFC 2016-A, LLC (“CFC”).  Mr. Massey is the managing member of CFC and as such may be deemed to beneficially own all of the securities held by CFC.
(7) Includes 918,186 ordinary shares and 166,667 warrants, each exercisable for one ordinary share.
(8)

Includes 14,628,906 ordinary shares and 6,250,000 warrants, each exercisable for one ordinary share, held by CFS Holdings (Cayman), L.P. (“CFS 1”) and 22,500,000 ordinary shares held by CFS Holdings II (Cayman), L.P. (“CFS 2”). CFS Holdings (Cayman) Manager L.L.C. is the general partner of CFS 1 and CFS 2. The Managing Member of CFS Holdings (Cayman) Manager L.L.C. is Blackstone Technical Opportunities LR Associates-B (Cayman) Ltd. The controlling shareholder of Blackstone Technical Opportunities LR Associates-B (Cayman) Ltd. is Blackstone Holdings III L.P. The general partner of Blackstone Holdings III L.P. is Blackstone Holding III GP L.P. The general partner of Blackstone Holdings III GP L.P. is Blackstone Holding III GP Management L.L.C. The sole member of Blackstone Holdings III GP Management L.L.C. is The Blackstone Group L.P. The general partner of The Blackstone Group L.P. is Blackstone Group Management L.L.C. Blackstone Group Management L.L.C. is wholly owned by Blackstone’s senior managing directors and controlled by its founder, Stephen A. Schwarzman. Each of such Blackstone entities and Mr. Schwarzman may be deemed to beneficially own the shares beneficially owned by CFS Holdings II (Cayman), L.P., but each (other than CFS 1 and CFS 2) disclaims beneficial ownership of such shares.

 

Also includes 142,111 ordinary shares held by GSO Aiguille des Grands Montets Fund II LP, 4,147,302 ordinary shares held by GSO COF III AIV-5 LP, 1,442,118 ordinary shares held by GSO COF III Co-Investment AIV-5 LP, 50,912 ordinary shares held by GSO Co-Investment Fund-D LP, 165,079 ordinary shares held by GSO Credit Alpha Fund LP, 52,541 ordinary shares held by GSO Churchill Partners LP, 113,921 ordinary shares held by GSO Credit-A Partners LP, and 24,016 ordinary shares held by GSO Harrington Credit Alpha Fund (Cayman) L.P. (collectively, with the other direct holders described in this paragraph, the “GSO Funds”).

 

GSO Capital Partners LP is the investment manager of GSO Aiguille des Grands Montets Fund II LP. GSO Advisor Holdings L.L.C. is the special limited partner of GSO Capital Partners LP with the investment and voting power over the securities beneficially owned by GSO Capital Partners LP. Blackstone Holdings I L.P. is the sole member of GSO Advisor Holdings L.L.C.

 

GSO Capital Opportunities Associates III LLC is the general partner of GSO COF III AIV-5 LP. GSO COF III Co-Investment Associates LLC is the general partner of GSO COF III Co-Investment AIV-5 LP. GSO Co-Investment Fund-D Associates LLC is the general partner of GSO Co-Investment Fund-D LP. GSO Credit Alpha Associates LLC is the general partner of GSO Credit Alpha Fund LP. GSO Churchill Associates LLC is the general partner of GSO Churchill Partners LP. GSO Credit-A Associates LLC is the general partner of GSO Credit-A Partners LP. GSO Harrington Credit Alpha Associates L.L.C. is the general partner of GSO Harrington Credit Alpha Fund (Cayman) L.P. GSO Holdings I L.L.C. is the managing member of each of GSO Capital Opportunities Associates III LLC, GSO COF III Co-Investment Associates LLC, GSO Co-Investment Fund-D Associates LLC, GSO Credit Alpha Associates LLC, GSO Churchill Associates LLC, GSO Credit-A Associates LLC and GSO Harrington Credit Alpha Associates L.L.C. Blackstone Holdings II L.P. is the managing member of GSO Holdings I L.L.C. with respect to securities beneficially owned by the GSO Funds.

 

Blackstone Holdings I/II GP Inc. is the general partner of each of Blackstone Holdings I L.P. and Blackstone Holdings II L.P. The Blackstone Group L.P. is the controlling shareholder of Blackstone Holdings I/II GP Inc. Blackstone Group Management L.L.C. is the general partner of The Blackstone Group L.P. Blackstone Group Management L.L.C. is wholly-owned by Blackstone's senior managing directors and controlled by its founder, Stephen A. Schwarzman. In addition, each of Bennett J. Goodman and J. Albert Smith III may be deemed to have shared voting power and/or investment power with respect to the securities held by the GSO Funds. Each of the foregoing entities and individuals disclaims beneficial ownership of the securities held directly by the GSO Funds (other than the GSO Funds to the extent of their direct holdings).

 

The address for the GSO Funds, each entity listed in the third paragraph of this footnote (other than Blackstone Holdings I L.P.), each entity listed in the fourth paragraph of this footnote (other than Blackstone Holding II L.P.), Mr. Goodman and Mr. Smith is c/o GSO Capital Partners LP, 345 Park Avenue. The address for each other entity and person listed in this footnote is c/o The Blackstone Group L.P., 345 Park Avenue, New York, NY 10154.

(9) Includes 3,125,000 ordinary shares and 1,500,000 warrants, each exercisable for one ordinary share, held by Fidelity National Financial, Inc. and 1,170,680 ordinary shares held by Fidelity National Title Insurance Company, 9,163,920 ordinary shares held by Chicago Title Insurance Company and 3,272,400 ordinary shares held by Commonwealth Land Title Insurance Company, each a wholly owned subsidiary of FNF. The address for FNF is 601 Riverside Ave., Jacksonville, FL 32204.
(10) Includes 12,434,612 ordinary shares and 2,333,333 warrants, each exercisable for one ordinary share.

 

 10 

 

 

Directors and Executive Officers

 

Biographical information with respect to the Company’s directors and executive officers immediately after the Closing is set forth in the Proxy Statement in the sections entitled “Officers and Directors of CF Corp. After the Business Combination” and “Proposal No. 12–The Director Election Proposal,” which are incorporated by reference herein.

 

In connection with and effective upon the consummation of the Business Combination, Douglas B. Newton resigned as Chief Financial Officer of the Company and David Ducommun resigned as Secretary of the Company, and on November 29, 2017 the Company’s board of directors (the “Board”) appointed Christopher J. Littlefield to serve as President, Chief Executive Officer and a Class C director of the Company, Dennis R. Vigneau to serve as Chief Financial Officer and Eric Marhoun to service as General Counsel and Secretary.

 

The size of the Board was increased to nine members effective upon the Closing. At the Shareholders Meeting, each of Mr. Foley, Co-Chairman of the Company, and Messrs. Abell and Massey were elected by the Company’s shareholders to serve as Class A directors effective upon the Closing with terms expiring at the Company’s 2020 annual general meeting of shareholders.

 

In connection with and effective upon the consummation of the Business Combination, on July 24, 2017, the Board appointed Mr. Chu, Co-Chairman of the Company, and Messrs. Quella and Baird to serve as Class B directors with terms expiring at the Company’s 2018 annual general meeting of shareholders and Messrs. Littlefield, Chee and Walsh to serve as Class C directors with terms expiring at the Company’s 2019 annual general meeting of shareholders.

 

Director Independence

 

The Board has determined that Messrs. Abell, Baird, Massey, Quella and Walsh are independent directors under the rules of the New York Stock Exchange (“NYSE Rules”). Under NYSE Rules, no director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with the Company. Based upon information requested from and provided by each director concerning their background, employment and affiliations, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, the Board has determined that each of the independent directors named above has no material relationship with the Company, nor has any such person entered into any material transactions or arrangements with the Company or its subsidiaries, either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company, and is therefore independent under NYSE Rules.

 

Committees of the Board of Directors

 

Following the Closing, the standing committees of the Board consist of an audit committee (the “Audit Committee”), a compensation committee (the “Compensation Committee”), and a nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”). Each of the committees reports to Board.

 

The composition, duties and responsibilities of these committees are set forth below.

 

Audit Committee

 

The Audit Committee is responsible for, among other things, assisting the Board in overseeing and reviewing the Company’s accounting and financial reporting and other internal control processes, the audits of the Company’s financial statements, the qualifications and independence of the Company’s independent registered public accounting firm, the effectiveness of the Company’s internal control over financial reporting, and the performance of the Company’s internal audit function and independent registered public accounting firm. The Audit Committee reviews and assesses the qualitative aspects of the Company’s financial reporting, the Company’s processes to manage business and financial risks, and the Company’s compliance with significant applicable legal and regulatory requirements. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm.

 

 11 

 

 

On November 29, 2017, effective upon the Closing, the Board appointed Messrs. Walsh (Chair), Abell and Baird as members of the Audit Committee. All members of the Audit Committee are independent within the meaning of the federal securities laws and the meaning of the NYSE Rules. Each member of the Audit Committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and the New York Stock Exchange (the “NYSE”), and the Board has determined that Mr. Walsh is an “audit committee financial expert,” as that term is defined by the applicable rules of the SEC. The Board has approved a written charter under which the Audit Committee operates. A copy of the charter is available without charge on the Company’s website.

 

Compensation Committee

 

The Compensation Committee is responsible for, among other things, reviewing and approving the compensation and benefits of the Chief Executive Officer, other executive officers and directors, administering the Company’s employee benefit plans, authorizing and ratifying stock option grants and other incentive arrangements, and authorizing employment and related agreements.

 

On November 29, 2017, effective upon the Closing, the Board appointed Messrs. Abell (Chair), Massey and Quella as members of the Compensation Committee. The Board has approved a written charter under which the Compensation Committee operates. A copy of the charter is available without charge on the Company’s website.

 

The Compensation Committee has the authority to delegate any of its responsibilities to sub-committees as the Compensation Committee may deem appropriate, provided that the sub-committees are composed entirely of directors satisfying the independence standards then applicable to the Compensation Committee generally.

 

Nominating and Corporate Governance Committee

 

The Nominating and Corporate Governance Committee is responsible for, among other things, identifying and recommending candidates to the Board for election to the Board, reviewing the composition of the Board and its committees, developing and recommending to the Board the criteria for evaluating director candidates, overseeing Board evaluations and recommending director compensation to the Compensation Committee.

 

On November 29, 2017, effective upon the Closing, the Board appointed Messrs. Quella (Chair), Massey and Baird as members of the Nominating and Corporate Governance Committee. The Board has approved a written charter under which the Nominating and Corporate Governance Committee operates. A copy of the charter is available without charge on the Company’s website.

 

Executive Compensation

 

The compensation of CF Corp.’s executive officers and directors before the consummation of the Business Combination is set forth in Part III, Item 11 of the CF Corp. Annual Report, which is incorporated by reference herein. The compensation of FGL’s name executive officers as defined under Item 402 of Regulation S-K (the “NEOs”) and directors before the consummation of the Business Combination is set forth in Part III, Item 11 of the FGL Annual Report, which is incorporated by reference herein.

 

As of the date of this Current Report on Form 8-K, the compensation of the Company’s executive officers and directors following the Closing has not been finally determined. Any such compensation to be provided to the Company’s officers and directors will be reviewed and approved by the Board or the Compensation Committee and will be publicly disclosed in accordance with the rules and regulations of the United States Securities and Exchange Commission.

 

At the Shareholders Meeting, the shareholders of the Company approved the Company’s 2017 Omnibus Incentive Plan (the “Incentive Plan”). The description of the Incentive Plan set forth in the Proxy Statement section entitled “Proposal No. 13–The Incentive Plan Proposal” is incorporated by reference herein. A copy of the full text of the Incentive Plan is filed as Exhibit 10.46 to this Current Report on Form 8-K and is incorporated by reference herein. Following the consummation of the Business Combination, the Company expects that the Board or the Compensation Committee will make grants of awards under the Incentive Plan to key management employees.

 

Certain Relationships and Related Transactions

 

The description of certain relationships and related transactions is included in the Proxy Statement in the section entitled “Certain Relationships and Related Party Transactions” and in Part III, Item 13 of the CF Corp. Annual Report, which are incorporated by reference herein.

 

 12 

 

 

The disclosure set forth above in Item 1.01 regarding the Equity Purchase Agreements, the Investment Management, the BTO Letter Agreement and the BTO/FNF Letter Agreement are incorporated by reference herein.

 

In addition, on October 18, 2017, CFS Holdings (Cayman), L.P., an investment vehicle owned by certain investment funds (including BTO) managed by certain indirect subsidiaries of Blackstone issued a promissory note in favor of CF Corp. in the amount of $271,197 (the “Promissory Note”) for purposes of capitalizing Bermuda Re. Interest on the Promissory Note accrued from October 18, 2017 at a base rate of 1.27% per annum and had a maturity date of October 18, 2018. The Promissory Note was repaid in full prior to the Closing.

 

As described above, on November 29, 2017, CF Corp. issued the Convertible Note to the Sponsor in the amount of $1,500,000 in respect of advances made by the Sponsor from time for CF Corp.’s ongoing expenses. The Convertible Note was non-interest bearing and became payable upon the completion of the Business Combination.

 

Under the terms of the Convertible Note, the Sponsor had the option to convert any amounts outstanding under the Convertible Note into warrants to purchase ordinary shares of the Company at a conversion price of $1.00 per warrant. As of November 29, 2017, CF Corp. had drawn $1,500,000 from the Convertible Note, and the Sponsor elected to convert the full amount outstanding into warrants. Each warrant will entitle the Sponsor to purchase one ordinary share at an exercise price of $11.50 per share, commencing 30 days after the completion of the Business Combination. Each warrant will contain such other terms identical to the warrants purchased by the Sponsor in connection with CF Corp.’s initial public offering.

 

Legal Proceedings

 

Information about legal proceedings is set forth in Part I, Item 3 of the FGL Annual Report, which is incorporated by reference herein.

 

Market Price of and Dividends on the Registrant’s Common Equity and Related Shareholder Matters

 

CF Corp.

 

CF Corp.’s units, ordinary shares and warrants were historically quoted on the Nasdaq Capital Market (“Nasdaq”) under the symbols “CFCOU,” “CFCO” and “CFCOW,” respectively. CF Corp.’s units commenced public trading on May 20, 2016, and the ordinary shares and warrants each commenced separate trading on July 8, 2016.

 

On December 1, 2017, the Company’s ordinary shares and warrants began trading on the NYSE under the symbols “FG” and “FG WS,” respectively. In connection with the Closing, all of the units of the Company separated into their component securities of one ordinary share and one-half of one warrant to purchase one ordinary share, and the units ceased trading as a separate security.

 

The following table sets forth, for the calendar quarter indicated, the high and low sales prices per unit and Class A ordinary share as reported on Nasdaq for the periods presented.

 

  

Units

(CFCOU)

  

Class A Ordinary Shares

(CFCO)

  

Warrants

(CFCOW)

 
   High   Low   High   Low   High   Low 
Fiscal Year 2017:                              
Fourth Quarter(1)   12.55    9.44    11.94    9.50    2.20    0.97 
Third Quarter   12.90    11.30    11.75    10.52    2.30    1.63 
Second Quarter   13.80    10.69    12.25    10.00    2.52    1.36 
First Quarter   11.24    10.35    10.25    9.89    1.70    1.20 
Fiscal Year 2016:                              
Fourth Quarter   10.97    10.13    9.98    9.78    1.19    0.81 
Third Quarter(2)   12.05    9.15    10.02    9.50    1.17    0.53 
Second Quarter(3)   10.10    9.76    N/A    N/A    N/A    N/A 

 

(1)Through November 30, 2017.
(2)Beginning July 8, 2016 with respect to CFCO and CFCOW.
(3)Beginning May 20, 2016 with respect to CFCOU.

 

 13 

 

 

Dividends on Ordinary Shares

 

CF Corp. has not paid any cash dividends on ordinary shares to date. The payment of cash dividends on ordinary shares in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends on ordinary shares will be within the discretion of the Company’s board of directors at such time. In addition, the terms of the preferred shares and agreements governing the indebtedness of the Company and its subsidiaries contain restrictions on the Company’s ability to declare and pay dividends.

 

Dividends on Preferred Shares

 

Dividends payable on the preferred shares may be paid in cash or, at the option of the Company, in lieu of paying such cash dividends, the Company may instead effect a share capitalization by issuing new duly authorized and fully paid and nonassessable preferred shares.

 

If the Company elects to effect a share capitalization by issuing preferred shares, the number of preferred shares to be issued will be calculated by dividing the portion of such dividend not paid in cash by the original liquidation preference of such preferred shares. Such preferred shares will be entitled to receive cumulative dividends at the same rates as the other preferred shares.

 

As described above, dividends will be payable quarterly in arrears in cash or additional preferred shares of the Company, at a rate of 7.5% per annum for the first ten years. After year ten, the dividend rate will reset quarterly to the greater of 7.5% and a rate equal to the then-current three-month LIBOR plus 5.5% (provided, however, that in the event the three-month LIBOR is less than zero, the three-month LIBOR will be deemed to be zero).

 

As of the Closing Date, there were 60 holders of record of the Company’s ordinary shares. The number of record holders does not include DTC participants or beneficial owners who hold securities through nominees.

 

 

FGL

 

Information about the market price, number of stockholders and dividends for FGL’s securities prior to the Closing Date is set forth in Part II, Item 5 of the FGL Annual Report, which is incorporated by reference herein.

 

Recent Sales of Unregistered Securities

 

Information about unregistered sales of and the Company’s equity securities is set forth in Part II, Item 2 of CF Corp.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed with the SEC on November 14, 2017, and under Item 3.02 of this Current Report on Form 8-K, respectively, which are incorporated by reference herein.

 

Description of Securities

 

A description of the Company’s ordinary shares, preferred shares and warrants is included in the Company’s Form 8-A filed with the SEC on November 30, 2017, which is incorporated by reference herein.

 

Indemnification of Directors and Officers

 

Information about the indemnification of the Company’s officers and directors is set forth in section entitled “Limitation on Liability and Indemnification of Officers and Directors” under Part III, Item 10 of the CF Corp. Annual Report, which is incorporated by reference herein.

 

Financial Statements, Supplementary Data and Exhibits

 

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated by reference herein.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure set forth above under Item 1.01 regarding the Credit Agreement, Amended and Restated Indenture and Convertible Note and related agreements is incorporated by reference herein.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The disclosure set forth above in Item 1.01 with respect to the Convertible Note and the issuance of the Company’s ordinary shares, preferred shares and ordinary shares issuable upon conversion of the preferred shares is incorporated by reference herein. The disclosure set forth above in Item 2.01 with respect to the warrants issued pursuant to the Convertible Note and the ordinary shares issuable pursuant to the exercise of such warrants is incorporated by reference herein.

 

 14 

 

 

On the Closing Date, pursuant to the forward purchase agreements, the Company issued to the anchor investors an aggregate of 51,000,000 ordinary shares, plus an aggregate of 19,083,335 redeemable warrants (“forward purchase warrants”), for $10.00 per ordinary share, or an aggregate cash purchase price of $510 million.

 

In addition, on the Closing Date, pursuant to certain additional equity purchase agreements, dated as of June 21, 2017 (collectively, the “ROFO Equity Purchase Agreements”), by and between the Company and certain accredited investors (the “ROFO Investors”), entered into in connection with the rights of first offer under the forward purchase agreements, the Company issued to the ROFO Investors an aggregate of 20,000,000 ordinary shares for a purchase price of $10.00 per share, or an aggregate cash purchase price of $200 million.

 

The ordinary shares, preferred shares and warrants, in each case, issued in connection with the transactions contemplated by the Business Combination, and ordinary shares issuable pursuant to the exercise of such warrants were not and will not be registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

 

Item 3.03 Material Modification to Rights of Security Holders.

 

The disclosure set forth above in Item 1.01 with respect to the Company’s preferred shares is incorporated by reference herein.

 

On the Closing Date, the Company amended and restated its amended and restated memorandum and articles of association the (“New Charter”). The material terms of the New Charter and the general effect upon the rights of the Company’s securityholders are included in the Proxy Statement under the sections titled “Proposal No. 3 – Charter Proposal A,” “Proposal No. 4 – Charter Proposal B,” “Proposal No. 5 – Charter Proposal C,” “Proposal No. 6 – Charter Proposal D,” “Proposal No. 7 – Charter Proposal E,” “Proposal No. 8 – Charter Proposal F,” “Proposal No. 9 – Charter Proposal G,” “Proposal No. 10 – Charter Proposal H” and “Proposal No. 11 – Charter Proposal I,” which are incorporated by reference herein.

 

A copy of the New Charter is filed as Exhibit 3.1 hereto and incorporated by reference herein.

 

Item 4.01 Change in Registrant’s Certifying Accountant.

 

On November 29, 2017, in connection with the Closing, WithumSmith+Brown, PC (“Withum”) resigned as the Company’s independent registered public accounting firm, effective as of the Closing Date. The report of Withum on the Company’s financial statements for the period from February 26, 2016 (date of inception) to December 31, 2016 did not contain an adverse opinion or a disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles.

 

During the period from February 26, 2016 (date of inception) to December 31, 2016, and in the subsequent interim period through November 29, 2017, (i) there were no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions) between CF Corp. or the Company and Withum on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of Withum, would have caused Withum to make reference to the subject matter of the disagreement in its reports and (ii) there were no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.

 

The Company provided Withum with a copy of the disclosures it is making in this Current Report on Form 8-K and requested that Withum furnish the Company with a letter addressed to the SEC stating whether it agrees with the above statements. A copy of Withum’s letter, dated December 1, 2017, is filed as Exhibit 16.1 to this Current Report on Form 8-K.

 

On November 29, 2017, the Audit Committee engaged KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017. Prior to the completion of the Business Combination, KPMG served as the auditor of FGL since its initial public offering. As of the date of this Current Report on 8-K, KPMG is in the process of its standard client evaluation procedures and has not accepted the engagement.

 

During the year ended December 31, 2016, and the subsequent interim period through November 29, 2017, neither the Company nor anyone on its behalf consulted with KPMG regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that KPMG concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue or (ii) any matter that was either the subject of a disagreement or a “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K).

 

 15 

 

 

Item 5.01 Changes in Control of Registrant.

 

The information set forth above in the “Introductory Note” and Item 2.01 is incorporated by reference herein.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

The information set forth above in the sections titled “Directors and Executive Officers,” “Director Independence,” “Committees of the Board of Directors” and “Executive Compensation” in Item 2.01 are incorporated by reference herein.

 

In addition, the Incentive Plan became effective upon the Closing Date. The material terms of the Incentive Plan are described in the Proxy Statement in the section entitled “Proposal No. 13—The Incentive Plan Proposal,” which is incorporated by reference herein.

 

Item 5.06 Change in Shell Company Status.

 

As a result of the Business Combination, which fulfilled the definition of an initial “Business Combination” as required by CF Corp.’s amended and restated memorandum & articles of association, the Company ceased to be a shell company as of the Closing Date. The material terms of the Business Combination are described in the Proxy Statement in the section entitled “Proposal No. 1—The Business Combination Proposal,” which is incorporated by reference herein.

 

Item 9.01 Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

 

The audited consolidated balance sheets of FGL and its subsidiaries as of September 30, 2017 and 2016, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2017, and the related notes and report of independent registered public accounting firm thereto, are incorporated herein by reference to FGL’s Annual Report on Form 10-K for the year ended September 30, 2017 (File No. 001-36227), which was filed with the SEC on November 16, 2017.

 

The audited combined balance sheets of the Acquired Companies as of September 30, 2017 and 2016, the related comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended September 30, 2017, and the related notes and report of independent auditors thereto, are filed with this Current Report on Form 8-K as Exhibit 99.2 and incorporated herein by reference.

 

(b) Pro Forma Financial Information.

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2017 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2016 and the nine months ended September 30, 2017 are filed with this Current Report on Form 8-K as Exhibit 99.2 and incorporated herein by reference.

 

(d) Exhibits

 

The following exhibits are being filed herewith:

 

Exhibit No.   Description
2.1*   Agreement and Plan of Merger, dated as of May 24, 2017, by and between CF Corporation, FGL US Holdings Inc., FGL Merger Sub Inc. and Fidelity & Guaranty Life (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by CF Corporation on May 31, 2017).
2.2   Amendment No. 1 to Agreement and Plan of Merger, dated as of June 30, 2017, by and between CF Corporation, FGL US Holdings Inc., FGL Merger Sub Inc. and Fidelity & Guaranty Life (incorporated by reference to Exhibit 2.2 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017).
3.1   Amended and Restated Memorandum and Articles of Association.
3.2   Certificate of Designations of Series A Cumulative Convertible Preferred Shares.
3.3   Certificate of Designations of Series B Cumulative Convertible Preferred Shares.
4.1   Specimen Ordinary Share Certificate.

 

 16 

 

 

4.2   Specimen Warrant Certificate.
4.3   Warrant Agreement, dated May 19, 2016, by and between CF Corporation and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.4 of the Current Report on Form 8-K, filed by CF Corporation on May 25, 2016 (File No. 001-37779)).
4.4   Amended and Restated Indenture, dated November 20, 2017, among Fidelity & Guaranty Life Holdings, Inc., as issuer, the Subsidiary Guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as trustee, relating to the 6.375% Senior Notes due 2021.
10.1   Letter Agreement, dated May 19, 2016, by and among CF Corporation, CF Capital Growth, LLC, Chinh E. Chu, William P. Foley, II, James A. Quella, Douglas B. Newton, David Ducommun and Richard N. Massey (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed by CF Corporation on May 25, 2016 (File No. 001-37779)).
10.2   Letter Agreement, dated May 17, 2017, by and between CF Corporation and Keith W. Abell (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K, filed by CF Corporation on May 18, 2017 (File No. 001-37779)).
10.3   Investment Management Trust Agreement, dated May 19, 2016, by and between CF Corporation and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.2 of Current Report on Form 8-K, filed by CF Corporation on May 25, 2016 (File No. 001-37779)).
10.4   Registration Rights Agreement, dated May 19, 2016, by and among CF Corporation, CF Capital Growth, LLC and the Holders signatory thereto (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K, filed by CF Corporation on May 25, 2016 (File No. 001-37779)).
10.5   Administrative Services Agreement, dated May 19, 2016, by and between CF Corporation and CF Capital Growth, LLC (incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K, filed by CF Corporation on May 25, 2016 (File No. 001-37779)).
10.6   Private Placement Warrants Purchase Agreement, dated May 19, 2016, by and between CF Corporation and CF Capital Growth, LLC (incorporated by reference to Exhibit 10.5 of the Current Report on Form 8-K, filed by CF Corporation on May 25, 2016 (File No. 001-37779)).
10.7   Promissory Note, dated as of February 29, 2016, issued to CF Capital Growth, LLC (f/k/a CF Capital Partners, LLC) (incorporated by reference to Exhibit 10.6 of the Registration Statement on Form S-1, filed by CF Corporation on April 21, 2016 (File No. 333-210854)).
10.8   Securities Subscription Agreement, dated February 29, 2016, between CF Capital Growth, LLC (f/k/a CF Capital Partners, LLC) and CF Corporation (incorporated by reference to Exhibit 10.7 of the Registration Statement on Form S-1, filed by CF Corporation on April 21, 2016 (File No. 333-210854)).
10.9   Form of Forward Purchase Agreement (incorporated by reference to Exhibit 10.9 of the Registration Statement on Form S-1/A filed by CF Corporation on May 3, 2016 (File No. 333-210854)).
10.10   Form of Amendment to Forward Purchase Agreement, dated as of May 24, 2017, by and among CF Corporation, the investor listed as the purchaser on the signature page thereof and CF Capital Growth, LLC (incorporated by reference to Exhibit 10.15 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.11   Forward Purchase Agreement, dated as of April 18, 2016, among the Registrant, CFS Holdings (Cayman), L.P. and CF Capital Growth, LLC, as amended (incorporated by reference to Exhibit 10.10 to Amendment No. 1 to the Registration Statement on Form S-1, filed by CF Corporation on May 3, 2016 1 (File No. 333-210854)).    
10.12   Amendment to Forward Purchase Agreement, dated as of May 24, 2017, by and among CF Corporation, CFS Holdings (Cayman), L.P. and CF Capital Growth, LLC (incorporated by reference to Exhibit 10.16 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.13   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation and Blackstone Tactical Opportunities Fund II, L.P. (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.14   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation and Blackstone Tactical Opportunities Fund II, L.P. (incorporated by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.15   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.16   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).

 

 17 

 

 

10.17   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation and GSO Capital Partners LP (incorporated by reference to Exhibit 10.5 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.18   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation and GSO Capital Partners LP (incorporated by reference to Exhibit 10.6 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.19   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation, Blackstone Tactical Opportunities Fund II, L.P. and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 10.7 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.20   Equity Commitment Letter, dated as of May 24, 2017, by and among CF Corporation, Blackstone Tactical Opportunities Fund II, L.P. and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 10.8 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.21   Amended and Restated Investor Agreement, dated as of June 6, 2017, by and among CF Corporation, Blackstone Tactical Opportunities Fund II, L.P., GSO Capital Partners LP and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 10.9 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.22   Fee Letter, dated as of May 24, 2017, by and among CF Corporation and Fidelity National Financial, Inc. (incorporated by reference to Exhibit 10.10 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.23   Fee Letter, dated as of May 24, 2017, by and among CF Corporation and GSO Capital Partners LP (incorporated by reference to Exhibit 10.11 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.24   Side Letter, dated as of May 24, 2017, by and among CF Corporation and GSO Capital Partners LP (incorporated by reference to Exhibit 10.12 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.25   Amended and Restated Debt Commitment Letter, dated as of May 31, 2017, by and among FGL US Holdings Inc., Royal Bank of Canada, RBC Capital Markets, LLC, Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 10.13 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.26   Letter Agreement, dated as of May 24, 2017, by and among CF Corporation, FS Holdco II Ltd., HRG Group, Inc. and FGL US Holdings Inc. (incorporated by reference to Exhibit 10.14 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.27   Form of Additional Equity Purchase Agreement (incorporated by reference to Exhibit 10.17 of the Quarterly Report on Form 10-Q filed by CF Corporation on August 14, 2017 (File No. 001-37779)).
10.28   Equity Purchase Agreement, dated as of November 29, 2017, by and between the Company and CFS Holdings II (Cayman), L.P.
10.29   Equity Purchase Agreement, dated as of November 29, 2017, by and between the Company and Fidelity National Financial, Inc.
10.30   Equity Purchase Agreement, dated as of November 29, 2017, by and between the Company and Fidelity National Title Insurance Company.
10.31   Equity Purchase Agreement, dated as of November 29, 2017, by and between the Company and Chicago Title Insurance Company.
10.32   Equity Purchase Agreement, dated as of November 29, 2017, by and between the Company and Commonwealth Land Title Insurance Company.
10.33   Equity Purchase Agreement, dated as of November 29, 2017, by and between the Company and Corvex Master Fund LP.
10.34   Investment Agreement, dated as of November 30, 2017, by and among the Company, GSO COF III AIV-5 LP, GSO COF III Co-Investment AIV-5 LP, GSO Co-Investment Fund-D LP, GSO Credit Alpha Fund LP, GSO Aiguille des Grands Montets Fund II LP, GSO Churchill Partners LP, GSO Credit-A Partners LP, GSO Harrington Credit Alpha Fund (Cayman) L.P., Fidelity National Title Insurance Company, Chicago Title Insurance Company and Commonwealth Land Title Insurance Company.
10.35   Investment Management Agreement, dated as of November 30, 2017, by and between Fidelity & Guaranty Life Insurance Company and Blackstone ISG-I Advisors L.L.C.
10.36   Investment Management Agreement, dated as of November 30, 2017, by and between FGL US Holdings Inc. and Blackstone ISG-I Advisors L.L.C.

 

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10.37   Investment Management Agreement, dated as of November 30, 2017, by and between Fidelity & Guaranty Life Holdings, Inc. and Blackstone ISG-I Advisors L.L.C.
10.38   Investment Management Agreement, dated as of November 30, 2017, by and between Front Street Re (Cayman) Ltd. and Blackstone ISG-I Advisors L.L.C.
10.39   Investment Management Agreement Termination Side Letter, dated as of November 30, 2017, by and between the Company and Blackstone ISG-I Advisors L.L.C.
10.40   Letter Agreement, dated as of November 30, 2017, by and between CF Corporation and Blackstone Tactical Opportunities Advisors LLC.
10.41   Letter Agreement, dated as of November 30, 2017, by and between CF Corporation, Blackstone Tactical Opportunities Advisors LLC and Fidelity National Financial, Inc.
10.42   Nominating and Voting Agreement, dated as of November 30, 2017, by and among Blackstone Tactical Opportunities Fund II L.P., Chinh E. Chu, William P. Foley, II and CF Corporation.
10.43   Credit Agreement, dated as of November 30, 2017, by and among CF Bermuda Holdings Limited, Fidelity & Guaranty Life Holdings, Inc., the financial institutions party thereto, as lenders, and Royal Bank of Canada, as administrative agent.
10.44   Guarantee Agreement, dated as of November 30, 2017, by and among Fidelity & Guaranty Life, FGL US Holdings Inc., Fidelity & Guaranty Life Business Services, Inc. and Royal Bank of Canada, as administrative agent.
10.45   Convertible Promissory Note, dated November 29, 2017, issued to CF Capital Growth, LLC.
10.46   FGL Holdings 2017 Omnibus Incentive Plan.
10.47   Employment Agreement, dated January 27, 2014, between Dennis Vigneau and Fidelity & Guaranty Life Business Services, Inc. (incorporated by reference to Exhibit 10.1 of Fidelity & Guaranty Life’s Current Report on Form 8-K, filed on January 28, 2014 (File No. 001-36227)).
10.48   Amended and Restated Employment Agreement, dated November 14, 2013, between Fidelity & Guaranty Life Business Services, Inc. and John P. O’Shaughnessy (incorporated by reference to Exhibit 10.38 of Fidelity & Guaranty Life’s Current Report Registration Statement on Form S-1/A, filed on November 22, 2013 (File No. 333-190880)).
10.49   Employment Agreement, dated November 14, 2013, between Fidelity & Guaranty Life Business Services, Inc. and John Phelps (incorporated by reference to Exhibit 10.39 of Fidelity & Guaranty Life’s Registration Statement on Form S-1/A, filed on November 22, 2013 (File No. 333-190880)).
10.50   Amended and Restated Employment Agreement, dated November 14, 2013, between Fidelity & Guaranty Life Business Services, Inc. and Rajesh Krishnan (incorporated by reference to Exhibit 10.40 of Fidelity & Guaranty Life’s Registration Statement on Form S-1/A, filed on November 22, 2013 (File No. 333-190880)).
10.51   Employment Agreement, dated November 14, 2013, between Fidelity & Guaranty Life Business Services, Inc. and Wendy J.B. Young (incorporated by reference to Exhibit 10.41 of Fidelity & Guaranty Life’s Registration Statement on Form S-1/A, filed on November 22, 2013 (File No. 333-190880)).
10.52   Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.5 of Fidelity & Guaranty Life’s Registration Statement on Form S-1/A, filed on November 26, 2013 (File No. 333-190880)).
10.53   Credit Agreement between Fidelity & Guaranty Life Holdings, Inc. as borrower, the Company as guarantor, and RBC Capital Markets and Credit Suisse Securities (USA) LLC together as joint lead arrangers for the lenders, dated as of August 26, 2014 (incorporated by reference to Exhibit 10.1 of Fidelity & Guaranty Life’s Current Report on Form 8-K, filed on August 26, 2014 (File No. 001-36227)).
10.54   Second Amendment to Credit Agreement dated as of July 17, 2017 by and among Fidelity & Guaranty Life Holdings, Inc., each of the lenders from time to time party thereto and Royal Bank of Canada (incorporated by reference to Exhibit 10.1 of Fidelity & Guaranty Life’s Form 8-K, filed on July 21, 2017 (File No. 001-36227)).
10.55   Revolving Loan Note, dated August 26, 2014 (incorporated by reference to Exhibit 10.2 of Fidelity & Guaranty Life’s Current Report on Form 8-K, filed on August 26, 2014 (File No. 001-36227)).
10.56   Guarantee Agreement, dated as of August 26, 2014, among Fidelity & Guaranty Life, other Guarantors, and Royal Bank of Canada, as Administrative Agent (incorporated by reference to Exhibit 10.3 of Fidelity & Guaranty Life’s Current Report on Form 8-K, filed on August 26, 2014 (File No. 001-36227)).
10.57   Employment Agreement, dated October 6, 2014, between Chris Littlefield and Fidelity & Guaranty Life Business Services, Inc. (incorporated by reference to Exhibit 10.1 of Fidelity & Guaranty Life’s Current Report on Form 8-K, filed on October 7, 2014 (File No. 001-36227)).

 

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10.58   Employment Agreement by and between Fidelity & Guaranty Life Business Services, Inc. and Christopher J. Littlefield, dated as of May 6, 2015 (incorporated by reference to Exhibit 10.1 of Fidelity & Guaranty Life’s Form 8-K, filed on May 8, 2015 (File No. 001-36227)).
10.59   Form of Retention Letter from Fidelity & Guaranty Life to its executive officers, dated July 10, 2015 (incorporated by reference to Exhibit 10.4 of Fidelity & Guaranty Life’s Quarterly Report on Form 10-Q, filed on August 5, 2015 (File No. 001-36227)).
10.60   Form of Indemnification Agreement by and between Fidelity & Guaranty Life and its directors and executive officers, dated as of July 14, 2015 (incorporated by reference to Exhibit 10.5 of Fidelity & Guaranty Life’s Quarterly Report on Form 10-Q, filed on August 5, 2015 (File No. 001-36227)).
21.1   Subsidiaries of the Company.
14.1   Code of Business Conduct and Ethics
16.1   Letter from WithumSmith+Brown, PC dated December 1, 2017.
99.1   Front Street Re Ltd. and Front Street Re (Cayman) Ltd. Combined Financial Statements as of September 30, 2017 and 2016 and for each of the years in the three-year period ended September 30, 2017.
99.2   Unaudited Pro Forma Condensed Combined Financial Information of CF Corp. as of September 30, 2017 and for the year ended December 31, 2016 and the nine months ended September 30, 2017.

 

* The exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon its request.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  FGL HOLDINGS
     
  By: /s/ Eric L. Marhoun
    Name: Eric L. Marhoun
    Title: General Counsel and Secretary
     
Dated: December 1, 2017    

 

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Section 2: EX-3.1 (EXHIBIT 3.1)

 

Exhibit 3.1

 

THE COMPANIES LAW (2016 REVISION)

 OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

 

AMENDED AND RESTATED

MEMORANDUM AND ARTICLES OF ASSOCIATION

 

OF

 

FGL Holdings

(adopted by special resolution dated 8 AUGUST 2017 and EFFECTIVE ON 30 NOVEMBER 2017)

 

 

 

 

THE COMPANIES LAW (2016 REVISION)

OF THE CAYMAN ISLANDS

COMPANY LIMITED BY SHARES

 

AMENDED AND RESTATED

MEMORANDUM OF ASSOCIATION

OF

FGL Holdings

(adopted by special resolution dated 8 AUGUST 2017 and EFFECTIVE ON 30 NOVEMBER 2017)

 

1The name of the Company is FGL Holdings

 

2The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors may decide.

 

3The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the laws of the Cayman Islands.

 

4The liability of each Member is limited to the amount unpaid on such Member's shares.

 

5The share capital of the Company is US$90,000 divided into 800,000,000 Ordinary Shares of a par value of US$0.0001 each and 100,000,000 Preferred Shares of a par value of US$0.0001 each.

 

6The Company has power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

 

7Capitalised terms that are not defined in this Memorandum of Association bear the respective meanings given to them in the Articles of Association of the Company.

 

 2

 

 

THE COMPANIES LAW (2016 REVISION)

 OF THE CAYMAN ISLANDS

 COMPANY LIMITED BY SHARES

 

AMENDED AND RESTATED

 ARTICLES OF ASSOCIATION

OF

FGL Holdings

(adopted by special resolution dated 8 AUGUST 2017 and EFFECTIVE ON 30 NOVEMBER 2017)

 

1Interpretation

 

1.1In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith:

 

"Affiliate" means, as to any person, any person which directly or indirectly controls, is controlled by, or is under common control with such person. For purposes of this definition, "control" of a person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by ownership of voting shares, by agreement or otherwise.
   
"Applicable Law" means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any Governmental Authority applicable to such person.
   
"Articles" means these articles of association of the Company.
   
"Auditor" means the person for the time being performing the duties of auditor of the Company (if any).
   
"Blackstone" means Blackstone Group, L.P.
   
"Blackstone Group" means: (a) Blackstone; (b) Blackstone Tactical Opportunities Fund II, L.P., an investment fund managed by Blackstone; (c) any investment fund or other collective investment vehicle whose general partner or managing member is owned, directly or indirectly, by Blackstone or one or more of Blackstone's subsidiaries; and (d) any Affiliate or Subsidiary of any of the foregoing (other than: (x) the Company; and (y) employees of the Company and Blackstone or either of their respective Subsidiaries).

 

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"Business Day" means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City.
   
"Cause" means a conviction for a criminal offence involving dishonesty or engaging in conduct which brings a Director or the Company into disrepute or which results in a material financial detriment to the Company.
   
"Code" means the United States Internal Revenue Code of 1986, as amended from time to time, or any United States Federal statute from time to time in effect that has replaced such statute, and any reference in the Articles to a provision of the Code or a United States Treasury regulation promulgated thereunder means such provision or regulation as amended from time to time or any provision of a United States Federal law or any United States Treasury regulation, from time to time in effect that has replaced such provision or regulation.
   
"Company" means the above named company.
   
"Controlled Share" means an Ordinary Share owned by a US Person either: (a) directly, indirectly or constructively under Section 958 of the Code; or (b) beneficially within the meaning of Section 13(d)(3) of the Exchange Act.
   
"Directors" means the directors for the time being of the Company.
   
"Dividend" means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles.
   
"Electronic Record" has the same meaning as in the Electronic Transactions Law.
   
"Electronic Transactions Law" means the Electronic Transactions Law (2003 Revision) of the Cayman Islands.
   
"Equity Security" means a Share, any security exercisable or convertible into or exchangeable for Shares and all options, warrants, and other rights to purchase or otherwise subscribe for Shares, including any share appreciation or similar rights, contractual or otherwise.

 

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"Exchange Act" means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
   
"FNF" means Fidelity National Financial, Inc.
   
"FNF Group" means: (a) FNF; (b) any subsidiary of FNF; (c) any investment fund or other investment vehicle whose general partner or managing member is owned, directly or indirectly, by FNF or one or more of FNF's Subsidiaries or Affiliates; (d) Fidelity National Financial Ventures, LLC; and (e) any affiliate, successor or officer of any of the foregoing.
   
"Governmental Authority" means any Cayman Islands, United States Federal, state, county, city, local or foreign governmental, administrative or regulatory authority, commission, committee, agency or body (including any court, tribunal or arbitral body and any self-regulating authority such as the United States Financial Industry Regulatory Authority).
   
"Group" shall have the meaning ascribed to it in Rule 13d-5 promulgated under the Exchange Act.
   
"Member" has the same meaning as in the Statute.
   
"Memorandum" means the memorandum of association of the Company.
   
"Minimum Member" means a Member meeting the minimum requirements set forth for eligible members to submit proposals under Rule 14a-8 of the Exchange Act or any applicable rules thereunder as may be amended or promulgated thereunder from time to time.
   
"Ordinary Resolution" means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles.
   
"Ordinary Share" means an ordinary share of a par value of US$0.0001 in the share capital of the Company.

 

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"Preferred Share" means a preferred share of a par value of US$0.0001 in the share capital of the Company.
   
"Register of Members" means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members.
   
"Registered Office" means the registered office for the time being of the Company.
   
"Seal" means the common seal of the Company and includes every duplicate seal.
   
"Share" means an Ordinary Share or a Preferred Share in the Company and includes a fraction of a share in the Company.
   
"Special Resolution" has the same meaning as in the Statute.
   
"Statute" means the Companies Law (2016 Revision) of the Cayman Islands.
   
"Subscriber" means the subscriber to the Memorandum.
   
"Subsidiary" means, with respect to any person, any other person the majority of whose equity securities or shares or voting securities or shares able to appoint the board of directors or comparable governing body are directly or indirectly owned or controlled by such person.
   
"Total Voting Power" means the total votes attributable to all issued Shares of the Company.
   
"Treasury Share" means a Share held in the name of the Company as a treasury share in accordance with the Statute.
   
"US Person" means a United States person as defined in Section 957(c) of the Code.

 

1.2In the Articles:

 

(a)words importing the singular number include the plural number and vice versa;

 

(b)words importing the masculine gender include the feminine gender;

 

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(c)"written" and "in writing" include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record;

 

(d)"shall" shall be construed as imperative and "may" shall be construed as permissive;

 

(e)references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced;

 

(f)any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

 

(g)the term "and/or" is used herein to mean both "and" as well as "or." The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or "or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not be interpreted to require the conjunctive (in each case, unless the context otherwise requires);

 

(h)headings are inserted for reference only and shall be ignored in construing the Articles;

 

(i)any requirements as to delivery under the Articles include delivery in the form of an Electronic Record;

 

(j)any requirements as to execution or signature under the Articles including the execution of the Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Law;

 

(k)sections 8 and 19(3) of the Electronic Transactions Law shall not apply;

 

(l)the term "clear days" in relation to the period of a notice means that period excluding the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;

 

(m)the term "holder" in relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share; and

 

(n)words importing "person" shall be construed in the broadest sense and means and includes a natural person, a partnership, a company, a corporation, an association, a joint share company, a limited liability company, a trust, a joint venture, an unincorporated organisation and any other entity and any government, governmental department, commission, board, bureau, agency or instrumentality, or any private or public court or tribunal.

 

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2Commencement of Business

 

2.1The business of the Company may be commenced as soon after incorporation of the Company as the Directors shall see fit.

 

2.2The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company, including the expenses of registration.

 

3Issue of Shares

 

3.1Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in general meeting) and without prejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividend or other distribution, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper, and may also (subject to the Statute and the Articles) vary such rights. Notwithstanding the foregoing, the Subscriber shall have the power to:

 

(a)issue one Ordinary Share to itself;

 

(b)transfer that Ordinary Share by an instrument of transfer to any person; and

 

(c)update the Register of Members in respect of the issue and transfer of that Ordinary Share.

 

3.2The Company shall not issue Shares to bearer.

 

4Rights Attaching to Shares

 

4.1The voting rights of the Shares shall be subject to the following provisions:

 

(a)except as provided in the other provisions of this Article, every Member of record owning Shares conferring the right to vote present in person or by proxy shall have one vote, or such other number of votes as may be specified in the terms of the issue and rights and privileges attaching to such Shares or in the Articles, for each such Share registered in such Member's name;

 

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(b)if, as a result of giving effect to the foregoing provisions of this Article or otherwise, the votes conferred by the Controlled Shares, directly or indirectly or by attribution, to any US Person that owns (within the meaning of Section 958(a) of the Code) any Shares, would otherwise represent more than 9.5% of the Total Voting Power, the votes conferred by such Controlled Shares shall be reduced by whatever amount is necessary so that after any such reduction the votes conferred by the Controlled Shares to such US Person shall constitute 9.5% of the Total Voting Power (provided, however, that: (a) votes shall be reduced only in the Controlled Shares (other than Controlled Shares held directly by members of the Blackstone Group or members of the FNF Group); and (b) votes shall be reduced in Controlled Shares held directly by the members of the Blackstone Group or the FNF Group only if and to the extent that reductions in the vote of other Controlled Shares do not result in satisfaction of the 9.5% threshold set forth in this Article 4.1(b). Notwithstanding anything in the Articles to the contrary, nothing in this Article 4.1 will reduce the votes conferred by: (i) any Shares held directly by the members of the Blackstone Group, without the consent of a majority of the Blackstone Group shareholders (as determined based on their ownership of the Ordinary Shares); or (ii) any Shares held directly by a member of the FNF Group without the consent of the applicable member of the FNF Group;

 

(c)any reduction in votes required by this Article 4.1(b) shall be effected beginning with the Controlled Shares of the US Person whose Controlled Shares have the largest number of votes and continuing, as required, with the Controlled Shares of each US Person whose Controlled Shares successively have a smaller number of votes (after giving effect to prior reductions), the reduction in votes conferred by the Controlled Shares shall be effected proportionately among all of the Controlled Shares of such US Person in accordance with the relative voting power of such Controlled Shares. If varying the order in which votes are reduced would result in a more equitable allocation of the reduction of votes as determined by the Directors, the Directors shall have the discretion to vary the order in which votes are reduced;

 

(d)after all required reductions to the votes conferred by the Controlled Shares are effected pursuant to Article 4.1(c), the amount of any reduction in the votes of the Controlled Shares of each US Person effected by application of Articles 4.1(b) and (c) shall be reallocated among and conferred on the shares held directly by such US Person, proportionately in accordance with the reduction in voting power of such shares pursuant to Article 4.1(c), to the extent that so doing does not cause the votes conferred by the Controlled Shares, directly or indirectly or by attribution, to any US Person that owns (within the meaning of Section 958(c) of the Code) any Shares to exceed 9.5% of the Total Voting Power;

 

(e)upon written notification by a Member to the Directors, the number of votes conferred by the total number of Shares held directly by such Member shall be reduced to that percentage of the Total Voting Power, as so designated by such Member (subject to acceptance of such reduction by the Directors in their sole discretion), so that (and to the extent that) such Member may meet any applicable insurance or other regulatory requirement or voting threshold or limitation that may be applicable to such Member or to evidence that such person's voting power is no greater than such threshold;

 

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(f)notwithstanding the foregoing provisions of this Article, after having applied such provisions as best as they consider reasonably practicable, the Directors may make final adjustments to the aggregate number of votes conferred, directly or indirectly or by attribution, by the Controlled Shares on any US Person to the extent that the Directors reasonably determine, by affirmative majority vote of the Directors, that it is necessary to do so to avoid any adverse tax consequences or materially adverse legal or regulatory treatment to the Company, any of its Subsidiaries or any Member or its Affiliates. Such adjustments intended to implement the 9.5% limitation set forth in Article 4.1(b) shall be subject to the proviso contained in such Article 4.1(b), but adjustments intended to implement the limitation set forth in a notification pursuant to Article 4.1(e) shall not be subject to the proviso contained in Article 4.1(b); and

 

(g)each Member shall provide the Company with such information as the Company may reasonably request so that the Company and the Directors may make determinations as to the ownership (direct or indirect or by attribution) of Controlled Shares to such Member or to any person to which Shares may be attributed as a result of the ownership of Shares by such Member. If a Member fails to provide a timely, complete and accurate response to any such request, the Directors may, upon an affirmative vote of a majority of the Directors and after a reasonable cure period, make adjustments to the aggregate number of votes conferred upon the Shares held by such Member.

 

4.2Any US Person shall give notice to the Company in writing within ten days following the date that such person acquires actual knowledge that such person would hold directly or indirectly or by attribution Controlled Shares that would but for Article 4.1(b) represent more than 9.5% of the voting power of all Shares entitled to vote generally at an election of Directors.

 

4.3Notwithstanding the foregoing, no person shall be liable to any other person or the Company for any losses or damages resulting from a Member's failure to respond to, or submission of incomplete or inaccurate information in response to, a request under Article 4.1(e) above or from such person's failure to give notice under Article 4.2. The Directors may rely on the information provided by a person under this Article in the satisfaction of its obligations under this Article. The Company may, but shall have no obligation to, provide notice to any person of any adjustment to its voting power that may result from the application of this Article.

 

5Tax Restrictions

 

5.1No Member or holder of Equity Securities that is a US Person (in all cases, excluding any member of the Blackstone Group and any member of the FNF Group), shall knowingly permit itself (or, to its actual knowledge, any direct or indirect beneficial owner thereof) to own (directly, indirectly or constructively pursuant to Section 958 of the Code) Equity Securities possessing fifty per cent (50%) or more of:

 

(a)the total voting power of the Shares or Equity Securities; or

 

(b)the total value of the Shares or Equity Securities.

 

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No Member or holder of Equity Securities (or, to its actual knowledge, any direct or indirect beneficial owner thereof) nor any "related person" (within the meaning of Section 953(c) of the Code) to such Member or holder of Equity Securities (or such owner) (in all cases, excluding any member of the Blackstone Group and any member of the FNF Group) shall make any investment, or enter into a transaction, that, to the actual knowledge of such Member at the time such Member, holder of Equity Securities, owner or related person becomes bound to make the investment or enter into the transaction, would cause such Member, holder of Equity Securities, owner or related person, or any other US Person to own (directly, indirectly or constructively pursuant to Section 958 of the Code) issued Shares or Equity Securities possessing fifty per cent (50%) or more of: (a) the total voting power of the Shares or Equity Securities; or (b) the total value of the Shares or Equity Securities.

 

5.2In the event any Member or holder of Equity Securities that is a US Person (in all cases, excluding any member of the Blackstone Group and any member of the FNF Group) violates Article 5.1 (without regard to any knowledge qualifier therein), at the discretion of the Directors, such Member or holder of Equity Securities shall, and shall cause any direct or indirect beneficial owner of such Member or holder of Equity Securities and any “related person” (within the meaning of Section 953(c) of the Code) to such Member or holder of Equity Securities to:

 

(a)sell some or all of its Equity Securities at fair market value (as determined by the Company and such Member or holder in good faith) as directed by the Directors; or

 

(b)allow the Company to repurchase some or all of its Equity Securities at fair market value (as determined by the Company and such Member or holder in good faith).

 

Notwithstanding anything to the contrary herein, upon a breach of Article 5.1 (without regard to any knowledge qualifier therein), the breaching Member or holder of Equity Securities shall be required to take any reasonable action the Directors deem appropriate.

 

6Register of Members

 

6.1The Company shall maintain or cause to be maintained the Register of Members in accordance with the Statute.

 

6.2The Directors may determine that the Company shall maintain one or more branch registers of Members in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register and which shall constitute the branch register or registers, and to vary such determination from time to time.

 

7Closing Register of Members or Fixing Record Date

 

7.1For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose, the Directors may provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed forty days.

 

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7.2In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or other distribution, or in order to make a determination of Members for any other purpose.

 

7.3If the Register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination shall apply to any adjournment thereof.

 

8Certificates for Shares

 

8.1A Member shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled and subject to the Articles no new certificate shall be issued until the former certificate representing a like number of relevant Shares shall have been surrendered and cancelled.

 

8.2The Company shall not be bound to issue more than one certificate for Shares held jointly by more than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.

 

8.3If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.

 

8.4Every share certificate sent in accordance with the Articles will be sent at the risk of the Member or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the course of delivery.

 

9Transfer of Shares

 

9.1Subject to Article 3.1, Shares are freely transferable.

 

9.2The instrument of transfer of any Share shall be in writing and shall be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee). The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members.

 

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10Redemption, Repurchase and Surrender of Shares

 

10.1Subject to the provisions of the Statute the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares shall be effected in such manner and upon such other terms as the Company may, by Special Resolution, determine before the issue of the Shares.

 

10.2Subject to the provisions of the Statute, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member.

 

10.3The Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Statute, including out of capital.

 

10.4The Directors may accept the surrender for no consideration of any fully paid Share.

 

11Treasury Shares

 

11.1The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.

 

11.2The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration).

 

12Variation of Rights of Shares

 

12.1Subject to Article 3.1, if at any time the share capital of the Company is divided into different classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class, or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except that the necessary quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll.

 

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12.2For the purposes of a separate class meeting, the Directors may treat two or more or all the classes of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate classes of Shares.

 

12.3The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith.

 

13Commission on Sale of Shares

 

The Company may, in so far as the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as may be lawful.

 

14Non Recognition of Trusts

 

The Company shall not be bound by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share, or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an absolute right to the entirety thereof in the holder.

 

15Lien on Shares

 

15.1The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's lien on a Share shall also extend to any amount payable in respect of that Share.

 

15.2The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold.

 

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15.3To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company's power of sale under the Articles.

 

15.4The net proceeds of such sale after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale.

 

16Call on Shares

 

16.1Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall (subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made.

 

16.2A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed.

 

16.3The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof.

 

16.4If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine (and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive payment of the interest or expenses wholly or in part.

 

16.5An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions of the Articles shall apply as if that amount had become due and payable by virtue of a call.

 

16.6The Directors may issue Shares with different terms as to the amount and times of payment of calls, or the interest to be paid.

 

16.7The Directors may, if they think fit, receive an amount from any Member willing to advance all or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable) pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance.

 

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16.8No such amount paid in advance of calls shall entitle the Member paying such amount to any portion of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such payment, become payable.

 

17Forfeiture of Shares

 

17.1If a call or instalment of a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited.

 

17.2If the notice is not complied with, any Share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture.

 

17.3A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favour of that person.

 

17.4A person any of whose Shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received payment in full of all monies due and payable by him in respect of those Shares.

 

17.5A certificate in writing under the hand of one Director or officer of the Company that a Share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share.

 

17.6The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by way of premium as if it had been payable by virtue of a call duly made and notified.

 

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18Transmission of Shares

 

18.1If a Member dies the survivor or survivors (where he was a joint holder) or his legal personal representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or sole holder.

 

18.2Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution, as the case may be.

 

18.3A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles) the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with.

 

19Amendments of Memorandum and Articles of Association and Alteration of Capital

 

19.1The Company may by Ordinary Resolution:

 

(a)increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;

 

(b)consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares;

 

(c)convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares of any denomination;

 

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(d)by subdivision of its existing Shares or any of them divide the whole or any part of its share capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and

 

(e)cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled.

 

19.2All new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital.

 

19.3Subject to the provisions of the Statute and the provisions of the Articles as regards the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution:

 

(a)change its name;

 

(b)alter or add to the Articles;

 

(c)alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and

 

(d)reduce its share capital or any capital redemption reserve fund.

 

20Offices and Places of Business

 

Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition to its Registered Office, maintain such other offices or places of business as the Directors determine.

 

21General Meetings

 

21.1All general meetings other than annual general meetings shall be called extraordinary general meetings.

 

21.2The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general meeting shall be held at such time and place as the Directors shall appoint and if no other time and place is prescribed by them, it shall be held at the Registered Office on the second Wednesday in December of each year at ten o'clock in the morning. At these meetings the report of the Directors (if any) shall be presented.

 

21.3The Directors may call general meetings.

 

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22Notice of General Meetings

 

22.1At least five days' notice shall be given of any general meeting. Every notice shall specify the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed:

 

(a)in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat; and

 

(b)in the case of an extraordinary general meeting, by a majority in number of the Members having a right to attend and vote at the meeting, together holding not less than ninety five per cent. in par value of the Shares giving that right.

 

22.2The accidental omission to give notice of a general meeting to, or the non receipt of notice of a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting.

 

23Advance Notice for Business

 

23.1At each annual general meeting, the Members shall appoint the Directors then subject to appointment in accordance with the procedures set forth in the Articles and subject to Applicable Law and the rules of any applicable stock exchange or quotation system on which Shares may be then listed or quoted. At any such annual general meeting any other business properly brought before the annual general meeting may be transacted.

 

23.2To be properly brought before an annual general meeting, business (other than nominations of Directors, which must be made in compliance with, and shall be exclusively governed by, Article 30) must be:

 

(a)specified in the notice of the annual general meeting (or any supplement thereto) given to Members by or at the direction of the Directors in accordance with the Articles;

 

(b)otherwise properly brought before the annual general meeting by or at the direction of the Directors; or

 

(c)otherwise properly brought before the annual general meeting by a Member who:

 

(i)is a Minimum Member at the time of giving of the notice provided for in this Article and at the time of the annual general meeting;

 

(ii)is entitled to vote at such annual general meeting; and

 

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(iii)complies with the notice procedures set forth in this Article.

 

23.3For any such business to be properly brought before any annual general meeting pursuant to Article 23.2(c), the Member must have given timely notice thereof in writing, either by personal delivery or express or registered mail (postage prepaid), to the Company not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the one-year anniversary of the date of the annual general meeting for the immediately preceding year. However, in the event that the date of the annual general meeting is more than 30 days before or after such anniversary date, in order to be timely, a Member's notice must be received by the Company not later than the later of: (x) the close of business 90 days prior to the date of such annual general meeting; and (y) if the first public announcement of the date of such advanced or delayed annual general meeting is less than 100 days prior to such date, 10 days following the date of the first public announcement of the annual general meeting date. In no event shall the public announcement of an adjournment or postponement of an annual general meeting, or such adjournment or postponement, commence a new time period or otherwise extend any time period for the giving of a Member's notice as described herein.

 

23.4Any such notice of other business shall set forth as to each matter the Member proposes to bring before the annual general meeting:

 

(a)a brief description of the business desired to be brought before the annual general meeting, the reasons for conducting such business at the annual general meeting and the text of any proposal regarding such business (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the Articles, the text of the proposed amendment), which shall not exceed 1,000 words;

 

(b)as to the Member giving notice and any beneficial owner on whose behalf the proposal is made:

 

(i)the name and address of such Member (as it appears in the Register of Members) and such beneficial owner on whose behalf the proposal is made;

 

(ii)the class and number of Shares which are, directly or indirectly, owned beneficially or of record by any such Member and by such beneficial owner, respectively, or their respective Affiliates (naming such Affiliates), as at the date of such notice;

 

(iii)a description of any agreement, arrangement or understanding (including, without limitation, any swap or other derivative or short positions, profit interests, options, hedging transactions, and securities lending or borrowing arrangement) to which such Member or any such beneficial owner or their respective Affiliates is, directly or indirectly, a party as at the date of such notice: (x) with respect to any Shares; or (y) the effect or intent of which is to mitigate loss to, manage the potential risk or benefit of share price changes (increases or decreases) for, or increase or decrease the voting power of such Member or beneficial owner or any of their Affiliates with respect to Shares or which may have payments based in whole or in part, directly or indirectly, on the value (or change in value) of any Shares (any agreement, arrangement or understanding of a type described in this Article 23.4(iii), a "Covered Arrangement"); and

 

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(iv)a representation that the Member is a holder of record of Shares entitled to vote at such annual general meeting and intends to appear in person or by proxy at the annual general meeting to propose such business;

 

(c)a description of any direct or indirect material interest by security holdings or otherwise of the Member and of any beneficial owner on whose behalf the proposal is made, or their respective Affiliates, in such business (whether by holdings of securities, or by virtue of being a creditor or contractual counterparty of the Company or of a third party, or otherwise) and all agreements, arrangements and understandings between such Member or any such beneficial owner or their respective Affiliates and any other person or persons (naming such person or persons) in connection with the proposal of such business by such Member;

 

(d)a representation whether the Member or the beneficial owner intends or is part of a Group which intends:

 

(i)to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Ordinary Shares (or other Shares) required to approve or adopt the proposal; and/or

 

(ii)otherwise to solicit proxies from Members in support of such proposal;

 

(e)an undertaking by the Member and any beneficial owner on whose behalf the proposal is made to:

 

(i)notify the Company in writing of the information set forth in Articles 23.4(b)(ii), (b)(iii) and (c) above as at the record date for the annual general meeting promptly (and, in any event, within five (5) Business Days) following the later of the record date or the date notice of the record date is first disclosed by public announcement; and

 

(ii)update such information thereafter within two (2) Business Days of any change in such information and, in any event, as at close of business on the day preceding the meeting date; and

 

(f)any other information relating to such Member, any such beneficial owner and their respective Affiliates that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, such proposal pursuant to Section 14 of the Exchange Act, to the same extent as if the Shares were registered under the Exchange Act.

 

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23.5Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to the proposal of any business pursuant to this Article, other than nominations for Directors which must be made in compliance with, and shall be exclusively governed by, Article 30, shall be deemed satisfied by a Member if such Member has submitted a proposal to the Company in compliance with Rule 14a-8 of the Exchange Act and such Member's proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for the annual general meeting; provided, that such Member shall have provided the information required by Article 23.4; provided, further, that the information required by Article 23.4(b) may be satisfied by providing the information to the Company required pursuant to Rule 14a-8(b) of the Exchange Act.

 

23.6Notwithstanding anything in the Articles to the contrary:

 

(a)no other business brought by a Member (other than the nominations of Directors, which must be made in compliance with, and shall be exclusively governed by, Article 30) shall be conducted at any annual general meeting except in accordance with the procedures set forth in this Article; and

 

(b)unless otherwise required by Applicable Law and the rules of any applicable stock exchange or quotation system on which Shares may be then listed or quoted, if a Member intending to bring business before an annual general meeting in accordance with this Article does not: (x) timely provide the notifications contemplated by Article 23.4(e) above; or (y) timely appear in person or by proxy at the annual general meeting to present the proposed business, such business shall not be transacted, notwithstanding that proxies in respect of such business may have been received by the Company or any other person or entity.

 

23.7Except as otherwise provided by Applicable Law or the Articles, the chairman of any annual general meeting shall have the power and duty to determine whether any business proposed to be brought before an annual general meeting was proposed in accordance with the foregoing procedures (including whether the Member solicited or did not so solicit, as the case may be, proxies in support of such Member's proposal in compliance with such Member's representation as required by Article 23.4(d)) and if any business is not proposed in compliance with this Article, to declare that such defective proposal shall be disregarded. The requirements of this Article shall apply to any business to be brought before an annual general meeting by a Member other than nominations of Directors (which must be made in compliance with, and shall be exclusively governed by, Article 30) and other than matters properly brought under Rule 14a-8 of the Exchange Act. For purposes of the Articles, "public announcement" shall mean:

 

(a)prior to the initial public offering of the Company, notice of the annual general meeting given to Members by or at the direction of the Directors in accordance with the procedures set forth in the Articles; and

 

(b)on and after the initial public offering of the Company, disclosure in a press release of the Company reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed or furnished by the Company with or to the United States Securities Exchange Commission pursuant to Section 13, 14 or 15(b) of the Exchange Act.

 

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23.8Nothing in this Article shall be deemed to affect any rights of:

 

(a)Members to request inclusion of proposals in the Company's proxy statement pursuant to applicable rules and regulations under the Exchange Act; or

 

(b)the holders of any class of Preferred Shares, or any other class of Shares authorised to be issued by the Company, to make proposals pursuant to any applicable provisions thereof.

 

23.9Notwithstanding the foregoing provisions of this Article, a Member shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Article, if applicable.

 

24Proceedings at General Meetings

 

24.1No business shall be transacted at any general meeting unless a quorum is present. The holders of a majority of the issued Shares being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorised representative or proxy shall be a quorum.

 

24.2A person may participate at a general meeting by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting.

 

24.3If a quorum is not present within half an hour from the time appointed for the meeting to commence or if during such a meeting a quorum ceases to be present, the meeting, if convened upon a Members' requisition, shall be dissolved and in any other case it shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting to commence, the meeting shall be dissolved.

 

24.4The Directors may, at any time prior to the time appointed for the meeting to commence, appoint any person to act as chairman or co-chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman or co-chairman, if any, of the board of Directors shall preside as chairman or co-chairman at such general meeting. If there is no such chairman or co-chairman, or if he shall not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors present shall elect one of their number to be chairman of the meeting.

 

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24.5If no Director is willing to act as chairman or co-chairman or if no Director is present within fifteen minutes after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the meeting.

 

24.6The chairman or co-chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

 

24.7When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting.

 

24.8A resolution put to the vote of the meeting shall be decided on a poll.

 

24.9A poll shall be taken as the chairman or co-chairman directs, and the result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded.

 

24.10A poll demanded on the election of a chairman or co-chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs, and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of the poll.

 

24.11In the case of an equality of votes the chairman or each co-chairman, if any, shall be entitled to a second or casting vote.

 

25Votes of Members

 

25.1Subject to any rights or restrictions attached to any Shares, every Member present in any such manner shall have one vote for every Share of which he is the holder.

 

25.2In the case of joint holders the vote of the senior holder who tenders a vote, whether in person or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the Register of Members.

 

25.3A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court, and any such committee, receiver, curator bonis or other person may vote by proxy.

 

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25.4No person shall be entitled to vote at any general meeting unless he is registered as a Member on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid.

 

25.5No objection shall be raised as to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman or co-chairman whose decision shall be final and conclusive.

 

25.6Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify the number of Shares in respect of which each proxy is entitled to exercise the related votes.

 

25.7A Member holding more than one Share need not cast the votes in respect of his Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed.

 

26Proxies

 

26.1The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under the hand of its duly authorised representative. A proxy need not be a Member.

 

26.2The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting or adjourned meeting to commence at which the person named in the instrument proposes to vote.

 

The chairman or co-chairman may in any event at his discretion declare that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared to have been duly deposited by the chairman or co-chairman, shall be invalid.

 

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26.3The instrument appointing a proxy may be in any usual or common form (or such other form as the Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.

 

26.4Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy.

 

27Corporate Members

 

Any corporation or other non-natural person which is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member.

 

28Shares that May Not be Voted

 

Shares in the Company that are beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding Shares at any given time.

 

29Directors

 

29.1There shall be a board of Directors consisting of not less than one person provided however that the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors. The first Directors of the Company shall be determined in writing by, or appointed by a resolution of, the Subscriber.

 

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29.2The Directors shall be divided into three classes: Class A, Class B and Class C. The number of Directors in each class shall be as nearly equal as possible. Upon the adoption of the Articles, the existing Directors shall by resolution classify themselves as Class A, Class B or Class C Directors. The Class A Directors shall stand elected for a term expiring at the Company's third annual general meeting following effectiveness of the Articles, the Class B Directors shall stand elected for a term expiring at the Company's first annual general meeting following effectiveness of the Articles and the Class C Directors shall stand elected for a term expiring at the Company's second annual general meeting following effectiveness of the Articles. At each annual general meeting following effectiveness of the Articles, the class of Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual general meeting after such election. Except as the Statute or other applicable law may otherwise require, in the interim between annual general meetings or extraordinary general meetings called for the election and/or the removal of one or more Directors and the filling of any vacancy in that connection, additional Directors and any vacancies in the board of Directors, including unfilled vacancies resulting from the removal of Directors for Cause, may be filled by the vote of a majority of the remaining Directors then in office, although less than a quorum (as defined in the Articles), or by the sole remaining Director. All Directors shall hold office until the expiration of their respective terms of office and until their successors shall have been elected and qualified. A Director elected to fill a vacancy resulting from the death, resignation or removal of a Director shall serve for the remainder of the full term of the Director whose death, resignation or removal shall have created such vacancy and until his successor shall have been elected and qualified. Holders of Shares may nominate persons for election as Director by sending a written notice addressed to the Company at the Registered Office by prepaid postal delivery, such notice to arrive at least twenty Business Days before the date of a general meeting at which the election of Directors is to be considered.

 

30Nomination of Directors

 

30.1Nominations of persons for election as Directors may be made at an annual general meeting only by:

 

(a)the Directors; or

 

(b)by any Member who:

 

(i)is a Minimum Member at the time of giving of the notice provided for in this Article and at the time of the annual general meeting;

 

(ii)is entitled to vote for the appointments at such annual general meeting; and

 

(iii)complies with the notice procedures set forth in this Article (notwithstanding anything to the contrary set forth in the Articles, this Article 30.1(b) shall be the exclusive means for a Member to make nominations of persons for election of Directors at an annual general meeting).

 

30.2Any Member entitled to vote for the elections may nominate a person or persons for election as Directors only if written notice of such Member's intent to make such nomination is given in accordance with the procedures set forth in this Article, either by personal delivery or express or registered mail (postage prepaid), to the Company not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the one-year anniversary of the date of the annual general meeting for the immediately preceding year. However, in the event that the date of the annual general meeting is more than 30 days before or after such anniversary date, in order to be timely, a Member's notice must be received by the Company not later than the later of: (x) the close of business 90 days prior to the date of such annual general meeting; and (y) if the first public announcement of the date of such advanced or delayed annual general meeting is less than 100 days prior to such date, 10 days following the date of the first public announcement of the annual general meeting date. In no event shall the public announcement of an adjournment or postponement of an annual general meeting, or such adjournment or postponement, commence a new time period or otherwise extend any time period for the giving of a Member's notice as described herein. Members may nominate a person or persons (as the case may be) for election to the Directors only as provided in this Article and only for such class(es) as are specified in the notice of annual general meeting as being up for election at such annual general meeting.

 

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30.3Each such notice of a Member's intent to make a nomination of a Director shall set forth:

 

(a)as to the Member giving notice and any beneficial owner on whose behalf the nomination is made:

 

(i)the name and address of such Member (as it appears in the Register of Members) and any such beneficial owner on whose behalf the nomination is made;

 

(ii)the class and number of Shares which are, directly or indirectly, owned beneficially and of record by such Member and any such beneficial owner, respectively, or their respective Affiliates (naming such Affiliates), as at the date of such notice;

 

(iii)a description of any Covered Arrangement to which such Member or beneficial owner, or their respective Affiliates, directly or indirectly, is a party as at the date of such notice;

 

(iv)any other information relating to such Member and any such beneficial owner that would be required to be disclosed in a proxy statement in connection with a solicitation of proxies for the election of Directors in a contested election pursuant to Section 14 of the Exchange Act; and

 

(v)a representation that the Member is a holder of record of Shares entitled to vote at such annual general meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in such Member's notice;

 

(b)a description of all arrangements or understandings between the Member or any beneficial owner, or their respective Affiliates, and each nominee or any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the Member;

 

(c)a representation whether the Member or the beneficial owner is or intends to be part of a Group which intends:

 

(i)to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Ordinary Shares (or other Shares) required to elect the Director or Directors nominated; and/or

 

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(ii)otherwise to solicit proxies from Members in support of such nomination or nominations;

 

(d)as to each person whom the Member proposes to nominate for election or re-election as a Director:

 

(i)all information relating to such person as would have been required to be included in a proxy statement filed in connection with a solicitation of proxies for the election of Directors in a contested election pursuant to Section 14 of the Exchange Act;

 

(ii)a description of any Covered Arrangement to which such nominee or any of his or her Affiliates is a party as at the date of such notice

 

(iii)the written consent of each nominee to being named in the proxy statement as a nominee and to serving as a Director if so elected; and

 

(iv)whether, if elected, the nominee intends to tender any advance resignation notice(s) requested by the Directors in connection with subsequent elections, such advance resignation to be contingent upon the nominee's failure to receive a majority vote and acceptance of such resignation by the Directors; and

 

(e)an undertaking by the Member of record and each beneficial owner, if any, to (i) notify the Company in writing of the information set forth in Articles 30.3(a)(2), (a)(iii), (b) and (d) above as at the record date for the annual general meeting promptly (and, in any event, within five (5) Business Days) following the later of the record date or the date notice of the record date is first disclosed by public announcement and (ii) update such information thereafter within two (2) Business Days of any change in such information and, in any event, as at close of business on the day preceding the meeting date.

 

30.4No person shall be eligible for election as a Director unless nominated in accordance with the procedures set forth in the Articles. Except as otherwise provided by Applicable Law or the Articles, the chairman of any annual general meeting to elect Directors or the Directors may, if the facts warrant, determine that a nomination was not made in compliance with the foregoing procedure or if the Member solicits proxies in support of such Member's nominee(s) without such Member having made the representation required by Article 30.3 (c); and if the chairman or the Directors should so determine, it shall be so declared to the annual general meeting, and the defective nomination shall be disregarded. Notwithstanding anything in the Articles to the contrary, unless otherwise required by Applicable Law or the rules of any applicable stock exchange or quotation system on which Shares may be then listed or quoted, if a Member intending to make a nomination at an annual general meeting in accordance with this Article does not:

 

(a)timely provide the notifications contemplated by of Article 30.3(e); or

 

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(b)timely appear in person or by proxy at the annual general meeting to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Company or any other person or entity.

 

30.5Notwithstanding the foregoing provisions of this Article, any Member intending to make a nomination at an annual general meeting in accordance with this Article, and each related beneficial owner, if any, shall also comply with all requirements of the Exchange Act and the rules and regulations thereunder applicable to the same extent as if the Shares were registered under the Exchange Act with respect to the matters set forth in the Articles; provided, however, that any references in the Articles to the Exchange Act are not intended to and shall not limit the requirements applicable to nominations made or intended to be made in accordance with Article 30.1(b).

 

30.6Nothing in this Article shall be deemed to affect any rights of the holders of any class of Preferred Shares, or any other class of Shares authorised to be issued by the Company, to appoint Directors pursuant to the terms thereof.

 

30.7To be eligible to be a nominee for election or re-election as a Director pursuant to Article 30.1(b), a person must deliver (not later than the deadline prescribed for delivery of notice) to the Company a written questionnaire prepared by the Company with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Company upon written request) and a written representation and agreement (in the form provided by the Company upon written request) that such person:

 

(a)is not and will not become a party to:

 

(i)any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a Director, will act or vote on any issue or question (a "Voting Commitment") that has not been disclosed to the Company; or

 

(ii)any Voting Commitment that could limit or interfere with such person's ability to comply, if elected as a Director, with such person's duties under Applicable Law;

 

(b)is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a Director that has not been disclosed therein;

 

(c)in such person's individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a Director, and will comply with, Applicable Law and corporate governance, conflict of interest, confidentiality and share ownership and trading policies and guidelines of the Company that are applicable to Directors generally; and

 

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(d)if elected as a Director, will act in the best interests of the Company and not in the interest of any individual constituency. The nominating and governance committee shall review all such information submitted by the Member with respect to the proposed nominee and determine whether such nominee is eligible to act as a Director. The Company and the nominating and governance committee of the Directors may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent Director or that could be material to a reasonable Member's understanding of the independence, or lack thereof, of such nominee.

 

30.8At the request of the Directors, any person nominated for election as a Director shall furnish to the Company the information that is required to be set forth in a Members' notice of nomination pursuant to this Article.

 

30.9Any Member proposing to nominate a person or persons for election as Director shall be responsible for, and bear the costs associated with, soliciting votes from any other voting Member and distributing materials to such Members prior to the annual general meeting in accordance with the Articles and applicable rules of the United States Securities Exchange Commission. A Member shall include any person or persons such Member intends to nominate for election as Director in its own proxy statement and proxy card.

 

31Powers of Directors

 

31.1Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors.

 

31.2All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall determine by resolution.

 

31.3The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

 

31.4The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

 

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32Appointment and Removal of Directors

 

32.1The Company may by Ordinary Resolution appoint any person to be a Director or may by Ordinary Resolution remove any Director for Cause (and not otherwise).

 

32.2The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with the Articles as the maximum number of Directors.

 

33Vacation of Office of Director

 

The office of a Director shall be vacated if:

 

(a)the Director gives notice in writing to the Company that he resigns the office of Director; or

 

(b)the Director absents himself (for the avoidance of doubt, without being represented by proxy) from three consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass a resolution that he has by reason of such absence vacated office; or

 

(c)the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors generally; or

 

(d)the Director is found to be or becomes of unsound mind; or

 

(e)all of the other Directors (being not less than two in number) determine that he should be removed as a Director for Cause (and not otherwise), either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held in accordance with the Articles or by a resolution in writing signed by all of the other Directors.

 

34Proceedings of Directors

 

34.1The quorum for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be a majority if there are three or more Directors, shall be two if there are two Directors, and shall be one if there is only one Director.

 

34.2Subject to the provisions of the Articles, the Directors may regulate their proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman or, if there are co-chairman, each co-chairman, shall have a second or casting vote.

 

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34.3A person may participate in a meeting of the Directors or committee of Directors by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting. Unless otherwise determined by the Directors the meeting shall be deemed to be held at the place where the chairman or co-chairman is located at the start of the meeting.

 

34.4A resolution in writing (in one or more counterparts) signed by all the Directors or all the members of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held.

 

34.5A Director may, or other officer of the Company on the direction of a Director shall, call a meeting of the Directors by at least two days' notice in writing to every Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall apply mutatis mutandis.

 

34.6The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose.

 

34.7The Directors may elect a chairman or co-chairman of their board and determine the period for which he is to hold office; but if no such chairman or co-chairman is elected, or if at any meeting the chairman or co-chairman is not present within fifteen minutes after the time appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting.

 

34.8All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as the case may be.

 

34.9A Director may be represented at any meetings of the board of Directors by a proxy appointed in writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing Director.

 

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35Presumption of Assent

 

A Director who is present at a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or co-chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action.

 

36Directors' Interests

 

36.1A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine.

 

36.2A Director may act by himself or by, through or on behalf of his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.

 

36.3A Director may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company.

 

36.4No person shall be disqualified from the office of Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon.

 

36.5A general notice that a Director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction.

 

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37Minutes

 

The Directors shall cause minutes to be made in books kept for the purpose of recording all appointments of officers made by the Directors, all proceedings at meetings of the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including the names of the Directors present at each meeting.

 

38Delegation of Directors' Powers

 

38.1The Directors may delegate any of their powers, authorities and discretions, including the power to sub-delegate, to any committee consisting of one or more Directors. Any such delegation may be made subject to any conditions the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying.

 

38.2The Directors may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying.

 

38.3The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and may be revoked by the Directors at any time.

 

38.4The Directors may by power of attorney or otherwise appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or any of the powers, authorities and discretions vested in him.

 

38.5The Directors may appoint such officers of the Company (including, for the avoidance of doubt and without limitation, any chairman (or co-chairman) of the board of Directors, vice chairman of the board of Directors, one or more chief executive officers, presidents, a chief financial officer, a secretary, a treasurer, vice-presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries or any other officers as may be determined by the Directors) as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise specified in the terms of his appointment an officer of the Company may be removed by resolution of the Directors or Members. An officer of the Company may vacate his office at any time if he gives notice in writing to the Company that he resigns his office.

 

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39No Minimum Shareholding

 

The Company in general meeting may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed a Director is not required to hold Shares.

 

40Remuneration of Directors

 

40.1The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors shall determine. The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of one such method and partly the other.

 

40.2The Directors may by resolution approve additional remuneration to any Director for any services which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration as a Director.

 

41Seal

 

41.1The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has been affixed shall be signed by at least one person who shall be either a Director or some officer of the Company or other person appointed by the Directors for the purpose.

 

41.2The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.

 

41.3A Director or officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.

 

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42Dividends, Distributions and Reserve

 

42.1Subject to the Statute and this Article and except as otherwise provided by the rights attached to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised or unrealised profits of the Company, out of the share premium account or as otherwise permitted by the Statute.

 

42.2Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly.

 

42.3The Directors may deduct from any Dividend or other distribution payable to any Member all sums of money (if any) then payable by him to the Company on account of calls or otherwise.

 

42.4The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner as may seem expedient to the Directors.

 

42.5Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required and how any costs involved are to be met.

 

42.6The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company.

 

42.7Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders.

 

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42.8No Dividend or other distribution shall bear interest against the Company.

 

42.9Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors, be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable shall be forfeited and shall revert to the Company.

 

43Capitalisation

 

The Directors may at any time capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given to the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective and binding on all such Members and the Company.

 

44Books of Account

 

44.1The Directors shall cause proper books of account to be kept with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Proper books of account shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company's affairs and to explain its transactions.

 

44.2The Directors shall determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting.

 

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44.3The Directors may cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.

 

45Audit

 

45.1The Directors may appoint an Auditor of the Company who shall hold office on such terms as the Directors determine.

 

45.2Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the Auditor.

 

45.3Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during their term of office, upon request of the Directors or any general meeting of the Members.

 

46Notices

 

46.1Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where the notice is given by e-mail by sending it to the e-mail address provided by such Member). Any notice, if posted from one country to another, is to be sent by airmail.

 

46.2Where a notice is sent by courier, service of the notice shall be deemed to be effected by delivery of the notice to a courier company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following the day on which the notice was delivered to the courier. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, pre paying and posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted. Where a notice is sent by cable, telex or fax, service of the notice shall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day that it was transmitted. Where a notice is given by e-mail service shall be deemed to be effected by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient.

 

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46.3A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

 

46.4Notice of every general meeting shall be given in any manner authorised by the Articles to every holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person shall be entitled to receive notices of general meetings.

 

47Winding Up

 

47.1If the Company shall be wound up the liquidator shall apply the assets of the Company in satisfaction of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in a winding up:

 

(a)if the assets available for distribution amongst the Members shall be insufficient to repay the whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them; or

 

(b)if the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise.

 

47.2If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares and with the sanction of a Special Resolution of the Company and any other sanction required by the Statute, divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability.

 

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48Indemnity and Insurance

 

48.1Every Director and officer of the Company (which for the avoidance of doubt, shall not include auditors of the Company), together with every former Director and former officer of the Company (each an "Indemnified Person") shall be indemnified out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default. No Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or indirect) of the carrying out of their functions unless that liability arises through the actual fraud, wilful neglect or wilful default of such Indemnified Person. No person shall be found to have committed actual fraud, wilful neglect or wilful default under this Article unless or until a court of competent jurisdiction shall have made a finding to that effect.

 

48.2The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall be returned to the Company (without interest) by the Indemnified Person.

 

48.3The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of any Director or other officer of the Company against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company.

 

49Financial Year

 

Unless the Directors otherwise prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation, shall begin on 1st January in each year.

 

50Transfer by Way of Continuation

 

If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

 

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51Mergers and Consolidations

 

The Company shall, with the approval of a Special Resolution, have the power to merge or consolidate with one or more constituent companies (as defined in the Statute), upon such terms as the Directors may determine.

 

52Business Opportunities

 

52.1In recognition and anticipation of the facts that: (a) directors, managers, officers, members, partners, managing members, employees and/or agents of one or more members of the Investor Group (each of the foregoing, an “Investor Group Related Person”) may serve as Directors and/or officers of the Company); and (b) the Investor Group engages, and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Company, directly or indirectly, may engage, the provisions of this Article are set forth to regulate and define the conduct of certain affairs of the Company as they may involve the Members and the Investor Group Related Persons, and the powers, rights, duties and liabilities of the Company and its officers, Directors and Members in connection therewith.

 

52.2To the fullest extent permitted by Applicable Law, the Investor Group and the Investor Group Related Persons shall have no duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Company. To the fullest extent permitted by Applicable Law, the Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for either the Investor Group or the Investor Group Related Persons, on the one hand, and the Company, on the other. Except to the extent expressly assumed by contract, to the fullest extent permitted by Applicable Law, the Investor Group and the Investor Group Related Persons shall have no duty to communicate or offer any such corporate opportunity to the Company and shall not be liable to the Company or its Members for breach of any fiduciary duty as a Member, Director and/or officer of the Company solely by reason of the fact that such party pursues or acquires such corporate opportunity for itself, himself or herself, directs such corporate opportunity to another person, or does not communicate information regarding such corporate opportunity to the Company.

 

52.3Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for both the Company and the Investor Group, about which a Director and/or officer of the Company who is also an Investor Group Related Person acquires knowledge.

 

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52.4To the extent a court might hold that the conduct of any activity related to a corporate opportunity that is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the fullest extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities. To the fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in the future and that have been conducted in the past.

 

52.5As used in this Article, the following definitions shall apply:

 

(a)Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under the Exchange Act; and

 

(b)Investor Group” shall mean Blackstone Tactical Opportunities Fund II, L.P., CF Capital Growth, LLC, CC Capital Management LLC, GSO Capital Partners LP and Fidelity National Financial, Inc. and their respective Affiliates, and the respective successors and assigns of the foregoing.

 

53Voting of Subsidiary Shares

 

53.1Notwithstanding any other provision of the Articles to the contrary (but subject to Article 53.2), if the Company, in its capacity as a member or shareholder of any Subsidiary of the Company that is not a company or corporation organised under the laws of the United States of America or any state (or limited liability company organised under the laws of the United States of AMerica or any state that is taxable as a company or corporation for United States Federal income tax purposes) and that is not treated as a pass-through vehicle or disregarded entity for United States federal income tax purposes (unless such disregarded entity owns, directly or indirectly, any subsidiary organised under the laws of a jurisdiction outside the United States of America that is treated as a corporation for United States federal income tax purposes), is required or has the right to vote at a general meeting or special meeting of such Subsidiary (whether in person or by its attorney-in-fact or proxy) (or by written resolution in lieu of a general meeting or special meeting), and the subject matter of the vote is:

 

(a)the appointment, removal or remuneration of directors of a non- United States Subsidiary of the Company; or

 

(b)any other subject matter with respect to a non-United States Subsidiary of the Company that legally requires the approval of the shareholders of such non-United States Subsidiary of the Company, the Directors shall refer the subject matter of the vote to the Members and seek instruction from the Members entitled to vote generally at an election of Directors for the Company's corporate representative or proxy to vote with respect to the resolution proposed by such Subsidiary of the Company.

 

The Directors shall cause the Company's corporate representative or proxy to vote the Company's shares in such Subsidiary of the Company pro rata to the votes received at the general meeting of the Company, with votes for or against the directing resolution being taken, respectively, as an instruction for the Company's corporate representative or proxy to vote the appropriate proportion of its share for and the appropriate proportion of its shares against the resolution proposed by such Subsidiary of the Company. The Directors shall have authority to resolve any ambiguity. All votes referred to the Members pursuant to this Article shall give effect to and otherwise be subject to the voting power restrictions of Article 4.

 

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53.2If the Directors, in their discretion, determine that the application of Article 53.1(b) with respect to a particular vote is not necessary to achieve the purposes of this Article, they may waive the application of Article 53.1(b) with respect to such vote.

 

54Bye-laws or Articles of Association of Certain Subsidiaries

 

The Directors shall require that the bye-laws or articles of association or similar organisational documents of each Subsidiary of the Company that is not a company or corporation organised under the laws of the United States of AMerica or any state (or limited liability company organised under the laws of the United States of America or any state that is taxable as a corporation for United States Federal income tax purposes) and that is not treated as a pass-through vehicle or disregarded entity for United States federal income tax purposes (unless such disregarded entity owns, directly or indirectly, any subsidiary organized under the laws of a jurisdiction outside the United States that is treated as a corporation for United States federal income tax purposes) contain provisions substantially similar to Article 53 and this Article. The Company shall enter into agreements, as and when determined by the Directors, with each such Subsidiary of the Company, only if and to the extent reasonably necessary and permitted under Applicable Law, to effectuate or implement this Article.

 

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Section 3: EX-3.2 (EXHIBIT 3.2)

 

Exhibit 3.2

 

EXECUTION VERSION

 

CERTIFICATE OF DESIGNATIONS

 

OF

 

SERIES A CUMULATIVE CONVERTIBLE PREFERRED SHARES

 

OF

 

FGL HOLDINGS

 

FGL HOLDINGS, an exempted company incorporated and existing under the laws of the Cayman Islands (the “Company”), does hereby certify:

 

That the Board of Directors of the Company (the “Board of Directors”), pursuant to the authority conferred upon the Board of Directors by the provisions of the Amended and Restated Memorandum and Articles of Association of the Company and applicable law, by way of written resolution dated November 30, 2017, duly adopted resolutions creating a class of preferred shares of the Company designated as “Series A Cumulative Convertible Preferred Shares”.

 

Section 1.          Designation. The designation of the class of preferred shares shall be “Series A Cumulative Convertible Preferred Shares” (the “Series A Shares”). Each Series A Share shall be identical in all respects to every other Series A Share. The Series A Shares will rank, on the terms set forth in Section 4(c) and Section 5, equally with Parity Shares and senior to Junior Shares, with respect to the payment of dividends and/or the distribution of assets following the commencement of any voluntary or involuntary liquidation of the Company.

 

Section 2.          Number of Shares. The number of authorized Series A Shares shall be 275,000, provided, that an additional 325,000 Series A Shares shall be authorized for issuance solely as PIK Shares. That number from time to time may be increased solely with the affirmative vote or consent of the holders of the Series A Shares pursuant to Section 12 and the Board of Directors; provided that no such increase shall be permitted that would cause the total number of authorized Preferred Shares, including the Series A Shares, to exceed the amount of Preferred Shares authorized by the Articles of Association.

 

Section 3.          Definitions. As used herein with respect to the Series A Shares:

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this Certificate of Designations, “control”, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

Agent Members” has the meaning set forth in Section 21(c).

 

Appoint” has the meaning set forth in Section 12(b)(v).

 

AOI” means, for any period, the adjusted operating income of the Company, calculated on a basis consistent with that adopted by Fidelity & Guaranty Life for the 2016 fiscal year, as reflected in its publicly filed financial statements.

 

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Arrearage” has the meaning set forth in Section 4(b).

 

Articles of Association” means the Second Amended and Restated Memorandum and Articles of Association of the Company, as they may be amended from time to time, and shall include this Certificate of Designations and the certificate of designations for any other authorized class of Preferred Shares.

 

Blackstone Funds” means, individually or collectively, any investment fund, coinvestment vehicles and/or other similar vehicles or accounts, in each case, managed by an Affiliate of The Blackstone Group L.P., or any of their respective successors.

 

Board of Directors” has the meaning set forth in the Recitals or a committee thereof duly authorized to act for such Board of Directors.

 

Business Day” means each weekday on which banking institutions in New York, New York are not authorized or obligated by law, regulation or executive order to close.

 

Calculation Agent” means the Transfer Agent acting in its capacity as calculation agent for the Series A Shares, and its successors and assigns.

 

Capital Stock” of any Person means (i) with respect to any Person that is a corporation or a company, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Ordinary Shares or Preferred Shares, and (ii) with respect to any Person that is not a corporation or a company, any and all partnership, limited liability company, membership or other equity interests of such Person, but in each case excluding any debt securities convertible into any of the foregoing.

 

Certificate of Designations” means this Certificate of Designations relating to the Series A Shares, as it may be amended from time to time.

 

Change of Control” means the occurrence of one of the following:

 

(i)          a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than a Permitted Holder, becomes or files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Ordinary Shares or other common equity of the Company representing more than 50% of the voting power of the issued and outstanding Ordinary Shares or other common equity of the Company;

 

(ii)         one or more Permitted Holders become, or commence a tender, exchange or similar offer and/or file a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such Permitted Holder(s) intends to become, in the aggregate, the direct or indirect ultimate “beneficial owners,” as defined in Rule 13d-3 under the Exchange Act, of Ordinary Shares or other common equity of the Company representing more than 60% of the voting power of the outstanding Ordinary Shares or other common equity of the Company; or

 

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(iii)        consummation of any consolidation, merger, amalgamation or scheme of arrangement of or involving the Company or similar transaction or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the property and assets of the Company to any Person other than one of the Company’s Subsidiaries, in each case pursuant to which the Ordinary Shares or other common equity of the Company will be converted into cash, securities or other property, other than pursuant to a transaction in which (A) the Persons that “beneficially owned” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, voting shares of the Company immediately prior to such transaction beneficially own, directly or indirectly, voting shares representing a majority of the total voting power of all issued and outstanding classes of voting shares of the continuing or surviving Person immediately after such transaction, or (B) the members of the Board of Directors or other governing body of the Company immediately prior to such transaction comprise a majority of the members of the Board of Directors or other governing body of the Company or such other continuing or surviving Person immediately after such transaction.

 

Closing Price” of the Ordinary Shares on any date of determination means the last reported sale price of the Ordinary Shares regular way on such date (or, if no such sale occurs on such date, the average of the reported closing bid and asked prices for such shares regular way on such date) on the Principal Market or, if there is no Principal Market for the Ordinary Shares, the average of the closing bid and asked prices quoted for the Ordinary Shares in the over-the-counter market as reported by OTC Markets Group Inc. or any similar organization, or if such closing prices are not so reported (or if the relevant price or prices required to be used to calculate the Closing Price as provided in this paragraph are not available in the relevant market on such date for any reason, the market price of the Ordinary Shares on such date as determined by a nationally recognized investment banking firm retained by the Company for this purpose).

 

Company” has the meaning set forth in the Recitals.

 

Competing Remarketing” means any ongoing Remarketing pursuant to Section 11, and any ongoing remarketing of the Series B Shares pursuant to Section 11 of the Series B Certificate of Designations; provided that no such Remarketing or remarketing shall be deemed to be ongoing past the applicable Remarketing Window for such Remarketing.

 

Constituent Person” has the meaning set forth in Section 10(a)(ii).

 

Conversion Agent” means the Transfer Agent acting in its capacity as conversion agent for the Series A Shares, and its successors and assigns.

 

Conversion Date” has the meaning set forth in Section 8(d).

 

Conversion Notice Date” has the meaning set forth in Section 8(d).

 

Conversion Price” means, at any time, a dollar amount equal to the higher of (i) a 5.0% discount to the arithmetic average of the VWAP per Ordinary Share on each of the 30 consecutive Trading Days from, but excluding the Conversion Notice Date, and (ii) the Floor Price.

 

Conversion Rate” means, at any time, the number of duly authorized, fully paid and nonassessable Ordinary Shares into which each Series A Share is convertible, after taking into account any adjustments pursuant to Section 9, determined by dividing (i) the Liquidation Preference (calculated as if the Conversion Date was the date fixed for liquidation the Company, and as adjusted pursuant hereto for share splits, share dividends, reclassifications and the like), by (ii) the Conversion Price.

 

Credit Agreement” means the Credit Agreement, dated as of November 30, 2017, by and among Fidelity & Guaranty Life Holdings, Inc., a Delaware corporation, CF Bermuda Holdings Limited, a Bermuda exempted limited liability company, the lenders from time to time a party thereto and Royal Bank of Canada, as administrative agent for the lenders and the other agents and arrangers party thereto.

 

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Current Market Price” as of any day means the average of the VWAP per Ordinary Share on each of the 10 consecutive Trading Days ending on the earlier of the day in question and the day before the Ex-date or other specified date with respect to the issuance or distribution requiring such computation, appropriately adjusted to take into account the occurrence during such period of any event described in Section 9. For the purpose of calculating the Current Market Price, consecutive Trading Days shall end on the day before the date in question.

 

Depositary” means DTC or its nominee, or any successor depositary appointed by the Company or its nominee.

 

Director Acceptance Letter” has the meaning set forth in Section 12(b)(ii).

 

Dividend Payment Date” has the meaning set forth in Section 4(a)(i). Each Dividend Payment Date “relates” to the Dividend Period most recently ending before such Dividend Payment Date, and vice versa (with the words “related” and “relating” having correlative meanings).

 

Dividend Period” means each period from and including a Dividend Payment Date (except that the initial Dividend Period shall commence on the Original Issue Date, and the initial Dividend Period for any Series A Shares issued in kind pursuant to Section 4 shall commence on the date such Series A Shares are issued) and continuing to but not including the next succeeding Dividend Payment Date.

 

Dividend Rate” means (i) for any day during the Fixed Rate Period, 7.5%, and (ii) for any date during the Floating Rate Period, the greater of (A) 7.5% and (B) a rate equal to Three-month LIBOR plus 5.5%; provided that in the event of an Modified Dividend Rate, such Modified Dividend Rate shall be the Dividend Rate.

 

Dividend Record Date” has the meaning specified in Section 4(a)(iii).

 

DTC” means The Depository Trust Company.

 

Engagement Date” has the meaning set forth in the definition of “Remarketing Window”.

 

Engagement Deadline” has the meaning set forth in Section 11(b).

 

Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

 

Exchange Property” has the meaning set forth in Section 10(a)(ii).

 

Ex-date”, when used with respect to any issuance or distribution, means the first date on which the Ordinary Shares or other relevant securities trade without the right to receive such issuance or distribution.

 

Expiration Date” has the meaning set forth in Section 9(a)(iv).

 

Expiration Time” has the meaning set forth in Section 9(a)(iv).

 

Fixed Rate Period” means each Dividend Period relating to a Dividend Payment Date occurring on or before November 30, 2027.

 

Floating Rate Period” means each Dividend Period relating to a Dividend Payment Date occurring after November 30, 2027.

 

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Floor Price” means (i) for a Conversion Date from and including November 30, 2027 to but not including November 30, 2028, $8.00, (ii) for a Conversion Date from and including November 30, 2028 to but not including November 30, 2029, $7.00, and (iii) for a Conversion Date from and after November 30, 2029, $6.00, in each case after taking into account any adjustment pursuant to Section 9.

 

FNF” means Fidelity National Financial, Inc., and its successors and permitted assigns.

 

Global Preferred Share” has the meaning set forth in Section 21(a).

 

GSO” means GSO Capital Partners LP, and its successors and permitted assigns.

 

GSO Group” means funds and accounts managed, advised or sub-advised by GSO and its Affiliates within the credit-focused business unit of The Blackstone Group L.P.

 

Holder” means, as to any Series A Share, the Person in whose name such share is registered in the register of members of the Company, which may be treated by the Company, Transfer Agent, Registrar, Calculation Agent, paying agent and Conversion Agent as the absolute owner of such share for the purpose of making payment and settling the related conversions and for all other purposes. References herein to “holders” of preferred shares of the Company shall mean, insofar as such shares are Series A Shares, the Holders thereof.

 

Included Series B Shares” has the meaning set forth in Section 11(h).

 

Junior Liquidation Shares” has the meaning set forth in the definition of “Junior Shares”.

 

Junior Payments” has the meaning set forth in Section 4(c)(i).

 

Junior Shares” means the Ordinary Shares and any other class or series of shares in the capital of the Company now existing or hereafter authorized over which the Series A Shares have preference or priority in the payment of dividends or in the distribution of assets following the commencement of any voluntary or involuntary liquidation of the Company. Junior Shares over which the Series A Shares have preference or priority in such distribution of assets are herein called “Junior Liquidation Shares”.

 

Liquidation Preference” has the meaning set forth in Section 5(a). References to the “liquidation preference” of any Preferred Shares of the Company in the Articles of Association shall mean the Liquidation Preference if such Preferred Shares are Series A Shares.

 

London Banking Day” means any day on which commercial banks are open in London for general business (including dealings in foreign exchange and foreign currency deposits).

 

Market Disruption Event” means, on any day when the Ordinary Shares are listed or admitted to trading or quoted on a securities exchange or quotation facility (whether U.S. national or regional or non-U.S.), any of the following events that occurs or continues to exist on such day:

 

(i)          any suspension of, or limitation imposed on, trading by the Principal Market during the one-hour period prior to the close of trading for the regular trading session (or for purposes of determining the VWAP per Ordinary Share, any period or periods aggregating one half-hour or longer during the regular trading session) on the Principal Market on such day, and whether by reason of movements in price exceeding limits permitted by the Principal Market, or otherwise, relating to the Ordinary Shares (specifically or among other shares generally) or to futures or options contracts relating to the Ordinary Shares (specifically or among other shares generally) on the Principal Market;

 

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(ii)         any event that disrupts or impairs (as determined by the Company in its reasonable discretion) the ability of market participants, during the one-hour period prior to the close of trading for the regular trading session (or for purposes of determining the VWAP per Ordinary Share, any period or periods aggregating one half-hour or longer during the regular trading session) on the Principal Market on such day, to effect transactions in, or obtain market values for, the Ordinary Shares (specifically or among other shares generally) on the Principal Market on such day or to effect transactions in, or obtain market values for, futures or options contracts relating to the Ordinary Shares (specifically or among other shares generally) on the Principal Market on such day; or

 

(iii)        the principal exchange or quotation facility (whether or not the Principal Market) on which futures or options contracts relating to the Ordinary Shares are listed or admitted to trading or quoted fails to open, or closes prior to its respective scheduled closing time, for the regular trading session on such day (without regard to after hours or any other trading outside of the regular trading session hours), unless such earlier closing time is announced by such exchange or facility at least one hour prior to the earlier of (A) the actual closing time for the regular trading session on such day and (B) the submission deadline for orders to be entered into such exchange or facility for execution at the actual closing time on such day.

 

Modified Dividend Rate” means, in connection with a Remarketing, the dividend rate per annum (which may be fixed or floating, and any spread with respect to a floating dividend rate) rounded to the nearest one one-thousandth (0.001) of one percent that the Series A Shares shall bear as determined by the Board of Directors pursuant to the Remarketing Agreement and Section 11(j).

 

Modified Redemption Date” means, in connection with a Remarketing, the earliest redemption date for the Series A Shares (which shall be no earlier than the earliest redemption date prior to such Remarketing) that shall apply after such Remarketing as determined by the Company pursuant to the Remarketing Agreement.

 

Modified Remarketing Price” has the meaning set forth in Section 11(d).

 

Modified Terms” has the meaning set forth in Section 11(d).

 

NC Date” has the meaning set forth in Section 6(a); provided that if there is a Modified Redemption Date, the NC Date shall be the Modified Redemption Date.

 

Nonpayment” has the meaning set forth in Section 12(b)(i).

 

Normalized AOI” means the AOI for any period subject to the following adjustments: (i) add back any amounts for “legacy incentive compensation”, and “back project expenses”, (ii) add back (if negative) or subtract (if positive) any amounts for “single premium immediate annuities mortality & other reserve adjustments”; (iii) add back (if negative) or subtract (if positive) any amounts for “assumption review & DAC unlocking”, and (iv) “other, including bond prepayment income and tax valuation allowance adjustments”, in each case, calculated on a basis consistent with that adopted in prior years by Fidelity Life & Guaranty in its publicly filed financial statements.

 

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Officer” means the Director, Chief Executive Officer, the Chief Operating Officer, the Chief Administrative Officer, the Chief Financial Officer, the Controller, the Chief Accounting Officer, the Treasurer, any Assistant Treasurer, the General Counsel and Corporate Secretary and any Assistant Secretary of the Company.

 

Officers’ Certificate” means a certificate signed (i) by a Director, the Chief Executive Officer, the Chief Operating Officer, the Chief Administrative Officer, the Chief Financial Officer, the Controller or the Chief Accounting Officer, and (ii) by the Treasurer, any Assistant Treasurer, the General Counsel, Corporate Secretary or any Assistant Secretary of the Company, and delivered to the Conversion Agent.

 

Ordinary Shares” means the ordinary shares in the capital of the Company, par value $0.0001 per share.

 

Original Holder” means any Holder that is (i) a member of the GSO Group or (ii) any transferee of such member that is an Affiliate of GSO.

 

Original Issue Date” means November 30, 2017.

 

Original Liquidation Preference” means $1,000.00 per Series A Share.

 

Original Remarketing Price” means an amount equal to the Liquidation Preference for the Series A Shares to be remarketed.

 

Original Series B Holders” means any Holder of Series B Shares that is (i) FNF, or (ii) any transferee of FNF that is an Affiliate of FNF.

 

Parity Dividend Shares” has the meaning set forth in the definition of “Parity Shares”.

 

Parity Liquidation Shares” has the meaning set forth in the definition of “Parity Shares”.

 

Parity Shares” means any class or series of shares in the capital of the Company hereafter authorized that ranks equally with the Series A Shares in the payment of dividends or in the distribution of assets following the commencement of any voluntary or involuntary liquidation of the Company. Parity Shares so ranking equally in the payment of dividends are herein called “Parity Dividend Shares”. Parity Shares so ranking equally in such distribution of assets are herein called “Parity Liquidation Shares”. The Series B Shares shall be deemed to be Parity Shares, Parity Dividend Shares and Parity Liquidation Shares.

 

Participation Deadline” has the meaning set forth in Section 11(a).

 

Participating Holders” has the meaning set forth in Section 11(a).

 

Participating Series B Holders” has the meaning set forth in Section 11(h).

 

Permitted Holders” means:

 

(i) each of Blackstone Tactical Opportunities Fund II, L.P., GSO, FNF, Cannae Holdings, Inc., BilCar, LLC, CC Capital Management, LLC, CFS Holdings (Cayman), LP, CFS II Holdings (Cayman), LP and the Blackstone Funds;

 

(ii) any Affiliate or Related Party of any Person specified in clause (i); and

 

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(iii) any Person both the Capital Stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) are owned 50% or more by Persons specified in clauses (i) and (ii) or any group in which the Persons specified in clauses (i) and (ii) own a majority of the voting power of the Voting Stock held by such group, and any Person that is a member of any such group.

 

Person” means a legal person, including any individual, company, corporation, estate, body corporate, partnership, limited liability company, trust, joint venture, association or other legal entity.

 

PIK Shares” has the meaning set forth in Section 4(a)(ii).

 

Preferred Shares” means any and all series or classes of preferred shares in the capital of the Company, having a par value of $0.0001 per share, including the Series A Shares and Series B Shares.

 

Preferred Share Director” has the meaning specified in Section 12(b)(i).

 

Principal Market” means, with respect to any day on which the Ordinary Shares are listed or admitted to trading or quoted on any securities exchange or quotation facility (whether U.S. national or regional or non-U.S.), the principal such exchange or facility on which the Ordinary Shares are so listed or admitted or so quoted.

 

Purchased Shares” has the meaning set forth in Section 9(a)(iv).

 

Record Date” has the meaning set forth in Section 9(d).

 

Redemption Price” has the meaning set forth in Section 6(a).

 

Registrar” means the Transfer Agent acting in its capacity as registrar for the Series A Shares, and its successors and assigns.

 

Regulatory Entities” means all governmental or self-regulatory authorities in the United States or elsewhere having jurisdiction over the Company or any of its Subsidiaries.

 

Reimbursed Holders” has the meaning set forth in Section 11(g).

 

Related Party” means:

 

(i)          any controlling stockholder, majority owned Subsidiary, or immediate family member (in the case of an individual) of any Permitted Holder; or

 

(ii)         any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding a majority (and controlling) interest of which consist of one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (i).

 

Remarketing” has the meaning set forth in Section 11(a).

 

Remarketing Agent” means any Remarketing Agent(s) appointed by the Company pursuant to Section 11.

 

Remarketing Agreement” means a Remarketing Agreement to be entered into between the Company and one or more Remarketing Agents setting forth the terms of a Remarketing.

 

Remarketing Date” means the date the Series A Shares offered in the Remarketing Period are priced by the Company and the Remarketing Agent(s).

 

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Remarketing Fee” means, in the event of a Successful Remarketing, a remarketing fee, if any, paid to the Remarketing Agent(s) to be agreed upon in writing by the Company and the Remarketing Agent(s) prior to any Remarketing pursuant to the Remarketing Agreement.

 

Remarketing Interest Amount” means interest on the Remarketing Loss Share Amount at a rate of 7.5% per annum accrued daily during the Remarketing Loss Share Pricing Period.

 

Remarketing Loss” has the meaning set forth in Section 11(g).

 

Remarketing Loss Share Amount” has the meaning set forth in Section 11(g).

 

Remarketing Loss Share Pricing Period” has the meaning set forth in Section 11(g).

 

Remarketing Notice” has the meaning set forth in Section 11(a).

 

Remarketing Period” has the meaning set forth in Section 11(c).

 

Remarketing Price” means, as applicable, the Original Remarketing Price or the Modified Remarketing Price.

 

Remarketing Process” means the Remarketing process specified in Section 11, commencing with the delivery of a Remarketing Notice.

 

Remarketing Reimbursement” has the meaning set forth in Section 11(g).

 

Remarketing Settlement Date” means the third Business Day immediately following the Remarketing Date for a Successful Remarketing, or such other date as the Company and the Remarketing Agent may mutually agree.

 

Remarketing Window” means the period from (i) the fifth Business Day following the earlier of (A) the Engagement Deadline, and (B) the date on which the Remarketing Agent(s) are engaged by the Company pursuant to Section 11 (the “Engagement Date”), through (ii) the 20th Business Day following the Engagement Deadline or Engagement Date, as applicable, provided that such period may be extended (and the Remarketing delayed) to no later than 180 days after the Engagement Deadline or Engagement Date, as applicable, if (i) the Remarketing Agent determines that the Remarketing is impractical due to then-prevailing market conditions, or (ii) if the Board of Directors determines in good faith (x) that such delay would enable the Company to avoid disclosure of material information, the disclosure of which at that time would not be in the Company’s best interests, or (y) that the Remarketing to be delayed would, if not delayed, materially adversely affect the Company and its Subsidiaries taken as a whole or materially interfere with, or jeopardize the success of, any pending or proposed material transaction, including any debt or equity financing, any acquisition or disposition, any recapitalization or reorganization or any other material transaction, whether due to commercial reasons, a desire to avoid premature disclosure of information or any other reason.

 

Reorganization Event” has the meaning set forth in Section 10(a).

 

Reuters Screen LIBOR01” means the display on the Reuters Eikon (or any successor service) on the “LIBOR01” page (or any other page as may replace such page on such service for the purpose of displaying the London interbank rates of major banks for U.S. dollar deposits).

 

Securities Act” means the United States Securities Act of 1933, as amended from time to time.

 

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Series A Shares” has the meaning set forth in Section 1.

 

Series B Certificate of Designations” means the Certificate of Designations for the Series B Shares.

 

Series B Participation Notice” has the meaning set forth in Section 11(h).

 

Series B Remarketing Notice” has the meaning set forth in Section 11(h).

 

Series B Shares” means the Series B Cumulative Convertible Preferred Shares of Company.

 

Shareholder Approval” has the meaning set forth in Section 8(e).

 

Subsidiary” means, with respect to any Person, any entity of which (i) such Person or any other Subsidiary of such Person is a general partner (in the case of a partnership) or managing member (in the case of a limited liability company), (ii) voting power to elect or appoint a majority of the board of directors, board of managers or others performing similar functions with respect to such organization is held by such Person or by any one or more of such Person’s Subsidiaries, (iii) at least fifty percent (50%) of any class of shares or Capital Stock or of the outstanding equity interests are beneficially owned by such Person or (iv) any Person that would otherwise be deemed a “subsidiary” under Rule 12b-2 under the Exchange Act.

 

Successful Remarketing” has the meaning set forth in Section 11(e).

 

Three-month LIBOR” means, with respect to any Floating Rate Period, the offered rate expressed as a percentage per annum for deposits in U.S. dollars for a three-month period commencing on the first day of such Floating Rate Period, as that rate appears on Reuters Screen LIBOR01 as of 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such Floating Rate Period.

 

If Three-month LIBOR does not appear on Reuters Screen LIBOR01, Three-month LIBOR shall be determined on the basis of the rates at which deposits in U.S. dollars for a three-month period, commencing on the first day of such Floating Rate Period, and in a principal amount of not less than $1,000,000, are offered to prime banks in the London interbank market by four major banks in that market selected by the Company and identified to the Calculation Agent at approximately 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such Floating Rate Period. The Calculation Agent shall request the principal London office of each of these banks to provide a quotation of its rate. If at least two such quotations are provided, Three-month LIBOR for such Floating Rate Period shall be the arithmetic mean of such quotations (rounded upward if necessary to the nearest 0.00001%).

 

If fewer than two such quotations are provided as described in the preceding paragraph, Three-month LIBOR with respect to such Floating Rate Period shall be the arithmetic mean (rounded upward if necessary to the nearest 0.00001%) of the rates quoted by three major banks in New York City selected by the Company and identified to the Calculation Agent at approximately 11:00 A.M., New York City time, on the first day of such Floating Rate Period for loans in U.S. dollars to leading European banks for a three-month period, commencing on the first day of such Floating Rate Period, and in a principal amount of not less than $1,000,000.

 

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If fewer than three banks selected by the Company and identified to the Calculation Agent to provide quotations are quoting as described in the preceding paragraph the Calculation Agent shall: (i) determine the base rate that is most comparable to the Three-month LIBOR that was last displayed on Reuters Screen LIBOR01; and (ii) apply such changes to that rate such that it is as similar as practicable, in the opinion of the Calculation Agent, to the rate that would have prevailed under the Three-month LIBOR that was last displayed on Reuters Screen LIBOR01, provided, that if the Calculation Agent determines there is an industry accepted successor base rate to the Three-month LIBOR that was last displayed on Reuters Screen LIBOR01, such successor base rate will be the rate applied under (i).

 

If Three-month LIBOR calculated in accordance with the foregoing paragraphs for any Floating Rate Period is less than zero, then Three-month LIBOR shall be deemed to be zero for such Floating Rate Period.

 

Trading Day” means, for purposes of determining a VWAP or Closing Price per share of Ordinary Shares, a day on which the Principal Market is open for the transaction of business and on which a Market Disruption Event does not occur or exist, or if the shares of Ordinary Shares are not listed or admitted to trading and are not quoted on any securities exchange or quotation facility, a Business Day.

 

Transfer Agent” means Continental Stock Transfer & Trust Company acting as Transfer Agent, Registrar, Calculation Agent, paying agent and Conversion Agent for the Series A Shares, and its successors and assigns.

 

Trust” has the meaning set forth in Section 6(e).

 

Unsuccessful Remarketing” has the meaning set forth in Section 11(f).

 

Voting Holders” has the meaning set forth in Section 12(b)(i).

 

Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable, of such Person.

 

VWAP” per Ordinary Share on any Trading Day means the per share volume-weighted average sale price per share of Ordinary Shares on the Principal Market as displayed under the heading Bloomberg VWAP on Bloomberg page “CF Equity VWAP” (or any appropriate successor page) in respect of the period from the open of trading until the close of trading on the Principal Market on such Trading Day (or if such volume-weighted average price is unavailable or not provided for any reason, or there is no Principal Market for the Ordinary Shares, the market price of one Ordinary Share on such Trading Day determined, using a volume-weighted average method, by a nationally recognized investment banking firm retained for this purpose by the Company). When used with respect to any other securities, “VWAP” shall have the meaning set forth above with references to the price per Ordinary Share meaning the price per unit of such other securities, with references to Bloomberg page “CF Equity VWAP” meaning the applicable Bloomberg page displaying the volume-weighted average sale price per unit of such securities and references to the Principal Market meaning the principal exchange or other market in which such securities are then listed, quoted or traded. The VWAP during any period shall be appropriately adjusted to take into account the occurrence during such period of any event described in Section 9.

 

In addition to the above definitions, unless the context requires otherwise:

 

(i)          any reference to any statute, regulation, rule or form as of any time shall mean such statute, regulation, rule or form as amended or modified and shall also include any successor statute, regulation, rule or form from time to time (and in the case of statutes, include any rules and regulations promulgated under the statute);

 

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(i)          references to “$” or “dollars” means the lawful coin or currency of the United States of America; and

 

(ii)         references to “Section” are references to Sections of this Certificate of Designations.

 

Section 4.          Dividends.

 

(a)           Quarterly Dividends.

 

(i)          Subject to applicable law, the Holders of the Series A Shares shall be entitled to receive, when, as and if declared by the Board of Directors (or a duly authorized committee of the Board of Directors), out of assets lawfully available for that purpose, cumulative cash dividends on the Original Liquidation Preference of $1,000.00 at a rate per annum equal to the then-applicable Dividend Rate. Subject to applicable law, dividends shall be payable quarterly in arrears on the first days of January, April, July and October, respectively, in each year, commencing on January 1, 2018; provided, however, that (x) if any such day during the Fixed Rate Period is not a Business Day, then such day shall nevertheless be a Dividend Payment Date but dividends on the Series A Shares, when, as and if declared, shall be paid on the next succeeding Business Day (without adjustment in the amount of the dividend per Series A Share), and (y) if any such day during the Floating Rate Period is not a Business Day, then the next succeeding Business Day shall be the applicable Dividend Payment Date and dividends, when, as and if declared, shall be paid on such next succeeding Business Day (each such day on which dividends are payable, after giving effect to this proviso if applicable, a “Dividend Payment Date”). Dividends on the Series A Shares shall begin to accumulate on the Original Issue Date (or, with respect to any Series A Shares issued in kind pursuant to this Section 4, the date on which such Series A Shares are issued) and shall be deemed to accumulate from day to day whether or not earned or declared until paid. Dividends payable on the Series A Shares in respect of each Fixed Rate Period shall be computed by the Calculation Agent on the basis of a 360-day year consisting of twelve 30-day months, and dividends payable on the Series A Shares in respect of each Floating Rate Period shall be computed by the Calculation Agent by multiplying the per annum dividend rate in effect for that Floating Rate Period by a fraction, the numerator of which will be the actual number of days in that Floating Rate Period and the denominator of which will be 360, and multiplying the rate obtained by $1,000 to determine the dividend per Series A Share. The Calculation Agent’s determination of any Dividend Rate, and its calculation of the amount of dividends for any Dividend Period, will be maintained on file at the Company’s principal offices and will be available to any Holder upon request and will be final and binding in the absence of manifest error. The Company may terminate the appointment of the Calculation Agent and may appoint a successor agent at any time and from time to time, provided that the Company shall use its best efforts to ensure that there is, at all relevant times when the Series A Shares are issued and outstanding, a person or entity appointed and serving as such agent.

 

(ii)         Dividends payable on Series A Shares on any Dividend Payment Date shall be paid in cash or, at the option of the Company, in lieu of paying such cash dividends, the Company may instead effect a share capitalization by issuing new duly authorized and fully paid and nonassessable Series A Shares (any such Series A Shares, “PIK Shares”) to the extent the Company chooses not to pay a cash dividend. If the Company elects to effect a share capitalization by issuing PIK Shares in accordance with the foregoing, the number of PIK Shares to be issued will be calculated by dividing the portion of such dividend not paid in cash by the Original Liquidation Preference, and such PIK Shares shall be entitled to receive cumulative dividends at the rates specified in the preceding paragraph from their date of issuance and shall otherwise be treated as Series A Shares for purposes of all other provisions hereof. The Company may not effect a share capitalization by issuing PIK Shares to the extent (A) there are not sufficient authorized but unissued Series A Shares to permit such share capitalization, (B) a Remarketing Process has commenced pursuant to Section 11 and not concluded or terminated, or (C) from and after May 31, 2018, if the aggregate issuance of Ordinary Shares upon conversion of Series A Shares and Series B Shares following such issuance of PIK Shares would be greater than 19.99% of the Ordinary Shares issued and outstanding as of the date hereof (calculated using the methodology applied under Section 312.03 of the NYSE Listed Company Manual and assuming that such Series A Shares were convertible pursuant to Section 7 at the time of the applicable Dividend Payment Date at a Conversion Price equal to the value of clause (iii) of the definition of Floor Price), until such time as the Company obtains the Shareholder Approval.

 

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(iii)        Dividends that are payable on the Series A Shares or any share capitalization effected on any Dividend Payment Date shall be payable, and any PIK Shares shall be issuable, to Holders of record of the Series A Shares as they appear on the register of members of the Company on the applicable record date, which shall be the 15th calendar day of the month immediately preceding such Dividend Payment Date or such other record date fixed by the Board of Directors (or a duly authorized committee of the Board of Directors) that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

 

(iv)        In connection with a Successful Remarketing of the Series A Shares, the Dividend Rate may be increased to an Modified Dividend Rate in accordance with Section 11 below. If the Dividend Rate on the Series A Shares is increased in accordance with Section 11 below, dividends shall accumulate at the Modified Dividend Rate pursuant to the terms of this Section 4 from (and including) the Remarketing Settlement Date. Any reference herein to accumulated and unpaid dividends shall include any such dividends at the Modified Dividend Rate, if applicable.

 

(b)           Cumulative Dividends. Dividends on the Series A Shares shall be cumulative, and from and after any Dividend Payment Date or other date on which any dividend or any payment upon redemption, or any Conversion Date on which any payment upon conversion, in each case has accumulated or been deemed to have accumulated through such date has not been paid in full (the “Arrearage”), additional dividends shall accumulate in respect of the Arrearage at the then-applicable Dividend Rate. Such additional dividends in respect of any Arrearage shall be deemed to accumulate daily from such Dividend Payment Date, or other date on which any dividend or any payment upon redemption or Conversion Date, whether or not earned or declared, until the Arrearage is paid and shall constitute additional Arrearage from and after the immediately following Dividend Payment Date to the extent not paid on such Dividend Payment Date. References in any Article herein to dividends that have “accumulated” or that have been deemed to have accumulated with respect to the Series A Shares shall include the amount, if any, of any Arrearage together with any dividends accumulated or deemed to have accumulated on such Arrearage pursuant to the immediately preceding two sentences.

 

(c)          Priority of Dividends.

 

(i)          For so long as any Series A Shares remain issued and outstanding, the Company will not, and will cause its Subsidiaries not to, declare, pay or set apart funds for any dividends or other distributions with respect to any Junior Shares or redeem, repurchase or otherwise acquire, or make a liquidation payment relating to, any Junior Shares, or make any guarantee payment with respect thereto, in any case during or in respect of any Dividend Period (collectively, “Junior Payments”), unless: (1)(A) full dividends (including any Arrearage and dividends accumulated in respect thereof) have been or contemporaneously are declared and paid in cash or in kind on the Series A Shares for all Dividend Periods prior to the date of such Junior Payment and the Dividend Period in which such Junior Payment falls, and (B) no PIK Shares are then issued and outstanding; (2) Fidelity & Guaranty Life Insurance Company, or any successor “primary” insurance Subsidiary of the Company, maintains an A.M. Best Company financial strength rating of A- or higher; (3) the Company is in compliance with the covenants set forth in Section 12(c); (4) any such Junior Payments, when aggregated with all other Junior Payments, other than on the Series A Shares and the Series B Shares, in any given fiscal year of the Company, does not represent an amount greater than 20% of the Normalized AOI of the Company for the preceding fiscal year; and (5) if any Change of Control has occurred, the requirements of Section 12(c)(iv) were satisfied with respect to such Change of Control; provided, however, that the foregoing restriction will not apply to:

 

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A.           purchases, redemptions or other acquisitions of Junior Shares (and the payment of cash in lieu of fractional shares in connection therewith) required by any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors of the Company or any Subsidiary;

 

B.           the purchase of fractional interests in Junior Shares pursuant to the conversion or exchange provisions of such Junior Shares;

 

C.           declaration of a non-cash dividend on the Capital Stock of the Company in connection with the implementation of a shareholders rights plan on customary terms designed to protect the Company against unsolicited offers to acquire its Capital Stock, or the issuance of Capital Stock of the Company under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto;

 

D.           dividends or distributions payable solely in Junior Shares, or warrants, options or rights to acquire Junior Shares; or

 

E.           conversions of any Junior Shares into, or exchanges of any Junior Shares for, a class or series of other Junior Shares.

 

Notwithstanding anything contained herein to the contrary, if any Junior Payment was permitted under this Section 4(c)(i) at the time it was declared or when it first became a contractual obligation, it shall be deemed permitted hereunder at the time it is actually paid; provided that such Junior Payment occurs within 60 days of such declaration or entry into such contractual obligation.

 

(ii)         For so long as any Series A Shares remain issued and outstanding, if full dividends (including any Arrearage and dividends accumulated in respect thereof) are not paid in full for any Dividend Period on the Series A Shares and any Parity Dividend Shares, all dividends paid or declared for payment on a dividend payment date with respect to the Series A Shares and the Parity Dividend Shares shall be shared (A) first ratably by the holders of any Parity Dividend Shares who have the right to receive dividends with respect to past dividend periods for which such dividends were not declared and paid, in proportion to the respective amounts of the undeclared and unpaid dividends relating to past dividend periods, and thereafter (B) ratably by the holders of Series A Shares and any Parity Dividend Shares, in proportion to the respective amounts of the undeclared and unpaid dividends relating to the current dividend period. Any proportional dividend on Parity Dividend Shares that have cumulative dividend rights will take into account the amount of any accumulated but unpaid dividends and arrearage with respect to such shares. To the extent a dividend period with respect to any Parity Dividend Shares coincides with more than one Dividend Period with respect to the Series A Shares, for purposes of the immediately preceding sentence the Board of Directors shall treat such dividend period as two or more consecutive dividend periods, none of which coincides with more than one Dividend Period with respect to the Series A Shares, or shall treat such dividend period(s) with respect to any Parity Dividend Shares and Dividend Period(s) with respect to the Series A Shares for purposes of the immediately preceding sentence in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on such Parity Dividend Shares and the Series A Shares. To the extent a Dividend Period with respect to the Series A Shares coincides with more than one dividend period with respect to any Parity Dividend Shares, for purposes of the first sentence of this paragraph the Board of Directors shall treat such Dividend Period as two or more consecutive Dividend Periods, none of which coincides with more than one dividend period with respect to such Parity Dividend Shares, or shall treat such Dividend Period(s) with respect to the Series A Shares and dividend period(s) with respect to any Parity Dividend Shares for purposes of the first sentence of this paragraph in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on the Series A Shares and such Parity Dividend Shares. The term “dividend period” as used in this paragraph means such dividend periods as are provided for in the terms of any Parity Dividend Shares and, in the case of Series A Shares, Dividend Periods applicable to shares of Series A Shares; and the term “dividend payment dates” as used in this paragraph means such dividend payment dates as are provided for in the terms of any Parity Dividend Shares and, in the case of Series A Shares, Dividend Payment Dates applicable to Series A Shares.

 

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(iii)        Subject to this Section 4, such dividends (payable in cash, in kind, securities or other property) as may be determined by the Board of Directors (or a duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Junior Shares and any Parity Dividend Shares, from time to time out of any funds legally available for such payment, and the Holders of Series A Shares shall not be entitled to participate in any such dividends.

 

(iv)        Notwithstanding any other section of this Section 4, the Company will not, and will cause its Subsidiaries not to, make any Junior Payment if such payment would cause the aggregate issuance of Ordinary Shares upon conversion of Series A Shares and Series B Shares to be greater than 19.99% of the Ordinary Shares issued and outstanding as of the date hereof (calculated using the methodology applied under Section 312.03 of the NYSE Listed Company Manual and assuming that such Series A Shares were convertible pursuant to Section 7 at the time of the applicable Dividend Payment Date at a Conversion Price equal to the value of clause (iii) of the definition of Floor Price), until such time as the Company obtains the Shareholder Approval.

 

Section 5.             Liquidation Rights.

 

(a)          Liquidation. Subject to applicable law, in the event of any voluntary or involuntary liquidation of the Company, Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Junior Liquidation Shares and subject to the rights of the holders of any Parity Liquidation Shares and the rights of the Company’s creditors, to receive in full in respect of each Series A Share a liquidating distribution in the amount of the Original Liquidation Preference plus all accumulated and unpaid dividends in respect of such share, whether or not declared (including Arrearage and dividends accumulated in respect thereof) to, but excluding, the date fixed for liquidation or, if applicable, the date of a Remarketing or repurchase pursuant to Section 11 or redemption pursuant to Section 6 (the “Liquidation Preference”). Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary winding up of the affairs, liquidation or dissolution of the Company other than what is expressly provided for in this Section 5.

 

(b)          Partial Payment. If, following the commencement of any voluntary or involuntary liquidation of the Company, the assets of the Company are not sufficient to pay the liquidating distributions payable with respect to the Series A Shares and the Parity Liquidation Shares, the amounts paid to the Holders and to the holders of all Parity Liquidity Shares shall be paid pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled.

 

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(c)          Residual Distributions. If the respective aggregate liquidating distributions to which all Holders and all holders of any Parity Liquidation Shares are entitled have been paid, the holders of Junior Liquidation Shares shall be entitled to receive all remaining assets of the Company according to their respective rights and preferences.

 

(d)          Merger, Amalgamation, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the sale, lease or other disposition (for cash, shares, securities or other consideration) of all or substantially all of the assets of the Company shall not be deemed to be a voluntary or involuntary liquidation of the Company, nor shall the consolidation, merger, amalgamation, binding share exchange or reclassification or any similar transaction involving the Company (whether or not the Company is the surviving or resulting entity) be deemed to be a voluntary or involuntary liquidation of the Company.

 

Section 6.             Redemption.

 

(a)          Optional Redemption. The Series A Shares are perpetual and have no maturity date. The Series A Shares may not be redeemed prior to the first Dividend Payment Date falling on or after November 30, 2022 (the “NC Date”); provided that nothing herein shall be construed to limit the repurchase or acquisition by the Company or any Affiliate of the Company of Series A Shares through privately negotiated transactions, tender offers or otherwise (including redemption under Section 6(b)). The Company, at the option of its Board of Directors or any duly authorized committee thereof, may redeem out of funds lawfully available therefor, in whole or in part, the Series A Shares at the time issued and outstanding, at any time on or after the NC Date, upon notice given as provided in Section 6(d) below, and at a redemption price in cash equal to the Liquidation Preference (calculated as if the date of redemption was the date fixed for winding up) on the Series A Shares being redeemed (the “Redemption Price”). In connection with a Successful Remarketing of the Series A Shares, the NC Date may be changed by the Board of Directors to a later date as set forth in Section 11.

 

(b)          Redemption of PIK Shares. The Company, at the option of its Board of Directors or any duly authorized committee thereof, may redeem out of funds lawfully available therefor, in whole or in part, the PIK Shares at the time issued and outstanding, at any time, upon notice given as provided in Section 6(d) below, for cash at the Redemption Price.

 

(c)          Notice of Company Redemption. Notice of every redemption of Series A Shares (including any PIK Shares) pursuant to Section 6(a)or Section 6(b) shall be mailed by first class mail, postage prepaid, addressed to the Holders of such shares to be redeemed at their respective last addresses appearing on the register of members of the Company. In respect of any mailing pursuant to Section 6(a) or Section 6(b), such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Section 6(c) shall be conclusively presumed to have been duly given, whether or not any Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of the Series A Shares designated for redemption shall not affect the validity of the proceedings for the redemption of any other Series A Shares. Each notice shall state:

 

(i)          the expected redemption date;

 

(ii)         the number of Series A Shares to be redeemed and, if fewer than all the shares of a Holder are to be redeemed, the number of such shares to be redeemed;

 

(iii)        the applicable Redemption Price;

 

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(iv)        the place or places where the certificates for such shares are to be surrendered for payment of the Redemption Price; and

 

(v)         that dividends on the shares to be redeemed will cease to accumulate on the redemption date.

 

Notwithstanding the foregoing, if the Series A Shares are held by a Depositary, the Company may give such notice in any manner permitted by the Depositary.

 

(d)          Partial Redemption. In case of any redemption of only part of the Series A Shares at the time issued and outstanding, the number of Series A Shares to be redeemed from each Holder shall be pro rata in proportion to the number of issued and outstanding Series A Shares held by such Holders. Subject to the provisions of this Section 6 and the Articles of Association, the Board of Directors or any duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which the Series A Shares shall be redeemed from time to time.

 

(e)          Effectiveness of Redemption. If notice of redemption has been duly given pursuant to Section 6(c) and if on or before the redemption date specified in the notice all funds necessary for payment of the applicable Redemption Price have been set aside by the Company, separate and apart from its other assets, for the benefit of the Holders of the shares called for redemption, so as to be and continue to be available therefor, or deposited by the Company with a bank or trust company selected by the Board of Directors or any duly authorized committee thereof in trust for the pro rata benefit of the Holders of the shares called for redemption (the “Trust”), then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the date of such deposit the voting rights and covenants set forth in Section 12 shall cease to be of further effect and any PIK Shares in respect of which such deposit has been made shall be deemed to be not outstanding for purposes of Section 4(c)(i)(1)(B). On and after the redemption date all shares so called for redemption shall cease to be issued and outstanding, all dividends with respect to such shares shall cease to accumulate on such redemption date and all other rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the Holders thereof to receive the amount payable on such redemption from the Trust at any time after the redemption date from the funds so deposited, without interest. The Company shall be entitled to receive, from time to time, from the Trust any interest accrued on such funds, and the Holders of any shares called for redemption shall have no claim to any such interest. Any funds so deposited and unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released or repaid to the Company, and in the event of such repayment to the Company, the Holders of the shares so called for redemption shall be deemed to be unsecured creditors of the Company for an amount equivalent to the amount deposited as stated above for the redemption of such shares and so repaid to the Company, but shall in no event be entitled to any interest.

 

Section 7.             Right of the Original Holders to Convert.

 

From and after November 30, 2027, but subject to the last sentence of this Section 7, each Original Holder shall have the right, at such Original Holder’s option (including after a notice of redemption has been given pursuant to Section 6(a) or Section 6(b) but prior to the date of actual redemption), to convert all or any portion of such Original Holder’s Series A Shares at any time into a number of Ordinary Shares equal to the then-applicable Conversion Rate multiplied by the number of Series A Shares to be converted (subject to the conversion procedures of Section 8), plus cash in lieu of fractional shares. Notwithstanding the foregoing, an Original Holder shall not be permitted to exercise its right of conversion with respect to any Series A Shares unless it has first sought the Remarketing of such Series A Shares pursuant to Section 11, and such Series A Shares are not disposed of in accordance with the terms thereof (including as a result of an Unsuccessful Remarketing). The right of conversion set forth in this Section 7 shall only be exercisable by the Original Holders, and no subsequent Holders shall be entitled thereto.

 

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Section 8.             Conversion Procedures.

 

(a)          Conversion Date. Effective immediately prior to the close of business on any applicable Conversion Date, dividends shall no longer be declared or payable on any such converted Series A Shares and such Series A Shares shall cease to be issued and outstanding, in each case, subject to the right of the Original Holders to receive any payments to which they are entitled to as of such time pursuant to the terms hereof.

 

(b)          Rights Prior to Conversion. No allowance or adjustment, except pursuant to Section 9, shall be made in respect of dividends payable to holders of the Ordinary Shares of record as of any date prior to the close of business on any applicable Conversion Date. Prior to the close of business on any applicable Conversion Date, Ordinary Shares issuable upon conversion of, or other securities issuable upon conversion of, any Series A Shares shall not be deemed issued and outstanding for any purpose, and Holders shall have no rights with respect to the Ordinary Shares or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Ordinary Shares or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Ordinary Shares or other securities issuable upon conversion) by virtue of holding Series A Shares; provided that nothing in this Section 8(b) shall be deemed to restrict or limit the rights of Holders under the terms of the Series A Shares themselves, including the voting rights set forth in Section 12 and the rights to dividends and liquidating distributions set forth in Section 4 and Section 5, respectively.

 

(c)          Record Holder of the Ordinary Shares. Each conversion will be deemed to have been effective as to any Series A Shares surrendered for conversion on the Conversion Date; provided, however, that the Person or Persons entitled to receive the Ordinary Shares and/or cash, securities or other property issuable upon conversion of the Series A Shares shall be treated for all purposes as the record holder(s) of such Ordinary Shares and/or securities as of the close of business on the last Trading Day of the period used to determine the relevant Conversion Price for such conversion. In the event that an Original Holder shall not by written notice designate the name in which Ordinary Shares and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of Series A Shares should be registered or paid or the manner in which such shares should be delivered, the Company shall be entitled to register and deliver such shares, and make such payment, in the name of the Original Holder and in the manner shown on the records of the Company or, in the case of Global Preferred Shares, through the facilities of the Depositary. The Ordinary Shares and/or cash, securities or other property issuable upon conversion of the Series A Shares shall be delivered by the Company no later than the third Business Day following the last Trading Day of the period used to determine the relevant Conversion Price for such conversion.

 

(d)          Conversion Procedure. An Original Holder may commence a conversion pursuant to this Section 8 by delivering a complete and manually signed conversion notice, in the form provided by the Conversion Agent, or a facsimile of the conversion notice, to the Conversion Agent, provided that such notice may, pursuant to a written notice thereunder be made contingent upon (but only upon) the successful completion of any registered public offering of the Ordinary Shares to be issued on such conversion that is being conducted pursuant to the registration rights attaching to such Ordinary Shares at such time and such notice shall in all other respects be irrevocable (the date on which such notice is received, the “Conversion Notice Date”; provided that, if such date is not a Business Day or such compliance does not occur prior to the close of business on such date, the Conversion Notice Date shall be the next Business Day).

 

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On or before the 31st Trading Day following the Conversion Notice Date (the “Conversion Date”), the Original Holder must:

 

(i)          surrender the Series A Shares to the Conversion Agent (if the Series A Shares are certificated);

 

(ii)         pay any funds equal to the dividends payable on the next Dividend Payment Date that such Holder is required to pay under this Section 8(d);

 

(iii)        if required, furnish customary endorsements and transfer documents; and

 

(iv)        if required, pay any share transfer, documentary, stamp or similar taxes not payable by the Company pursuant to Section 22.

 

If an Original Holder’s interest is a beneficial interest in a global certificate representing Series A Shares, in order to convert an Original Holder must comply with clauses (ii), (iii) and (iv) listed above and comply with the Depositary’s procedures for converting a beneficial interest in a global security.

 

Provided that the Original Holder has complied with the foregoing, on the Conversion Date, the Conversion Agent shall, on such Original Holder’s behalf, convert the Series A Shares into Ordinary Shares, (x) in accordance with the terms of the notice delivered by such Original Holder to the Conversion Agent or (y) otherwise pursuant to any applicable Depositary procedures, if applicable.

 

If an Original Holder converts its Series A Shares after the close of business on a Dividend Record Date, but prior to the open of business on the Dividend Payment Date corresponding to such Dividend Record Date, then (x) the Original Holder of such Series A Shares at the close of business on such Dividend Record Date shall be entitled, notwithstanding such conversion, to receive, on such Dividend Payment Date, the unpaid dividends that have accrued on such Series A Shares to, but excluding, such Dividend Payment Date; and (y) the Original Holder of such Series A Shares must, upon surrender of such Series A Shares for conversion, accompany such Series A Shares with an amount of cash equal to the dividends that will be payable on such Series A Shares on such Dividend Payment Date.

 

(e)          Conversion Effect. The conversion may be effected in any manner permitted by applicable law and the Articles of Association, including redeeming or repurchasing the relevant Series A Shares and applying the proceeds thereof towards payment for the new Ordinary Shares. For purposes of the repurchase or redemption, the Board of Directors may, subject to the Company being able to pay its debts in the ordinary course of business, make payments out of amounts standing to the credit of the Company’s share premium account or out of its capital. Until such time as the Company obtains the approval of its shareholders of the conversion of the Series A Shares into Ordinary Shares for purposes of Section 312.03 of the NYSE Listed Company Manual (the “Shareholder Approval”), notwithstanding anything to the contrary in this Section 8, the aggregate issuance of Ordinary Shares upon conversion of Series A Shares and Series B Shares shall be capped at 19.99% of the Ordinary Shares issued and outstanding as of the date hereof and the Original Holder shall not be entitled to any cash or other consideration for Ordinary Shares not received due to this limitation.

 

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Section 9.            Anti-Dilution Adjustments.

 

(a)          Adjustments. The Floor Price will be subject to adjustment, without duplication, under the following circumstances:

 

(i)          the issuance to all holders of Ordinary Shares of Ordinary Shares as a dividend, bonus shares or distribution to all holders of Ordinary Shares, or a subdivision or combination of Ordinary Shares, in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / (OS1 / OS0)

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  OS0   =    the number of Ordinary Shares issued and outstanding at the close of business on the Record Date prior to giving effect to such event
     
  OS1   =    the number of Ordinary Shares that would be issued and outstanding immediately after, and solely as a result of, such event

 

(ii)         the issuance to all holders of Ordinary Shares of rights or warrants (including convertible securities) entitling them for a period expiring 60 days or less from the date of issuance of such rights or warrants to purchase Ordinary Shares at an exercise price per share less than (or having a conversion price per share less than) the Current Market Price as of the date such issuance is publicly announced, in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / [(OS0 + X) / (OS0 + Y)]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  OS0   =    the number of Ordinary Shares issued and outstanding at the close of business on the Record Date prior to giving effect to such event
     
  X   =    the total number of shares of Ordinary Shares issuable pursuant to such rights (or upon conversion of such securities)
     
  Y   =    the aggregate price payable to exercise such rights (or the aggregate conversion price for such securities paid upon conversion) divided by the average of the VWAP of the Ordinary Shares over each of the 10 consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights

 

 20 

 

 

However, the Floor Price will be readjusted to the extent that any such rights or warrants are not exercised prior to their expiration; provided that such readjustment shall not have any effect on Series A Shares that had been converted prior to such readjustment or on the Ordinary Shares issued pursuant thereto, and such readjustment shall apply only to such Series A Shares that remain issued and outstanding at the time of such readjustment.

 

(iii)        the dividend or other distribution to all holders of Ordinary Shares of shares in the capital of the Company (other than Preferred Shares), rights or warrants (including convertible securities) to acquire shares of the Company or evidences of its indebtedness or its assets (excluding any dividend, distribution or issuance covered by clause (i) or (ii) above or (iv) below), in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / [SP0 / (SP0 – FMV)]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  SP0   =    the Current Market Price as of the Record Date
     
  FMV   =    the fair market value (as reasonably determined by the Board of Directors) on the Record Date of the shares of the Company, rights or warrants, or evidences of indebtedness or assets so distributed, expressed as an amount per Ordinary Share

 

However, if the transaction that gives rise to an adjustment pursuant to this clause (iii) is one pursuant to which the payment of a dividend, bonus shares or other distribution on shares in the capital of the Company (other than Preferred Shares) consists of shares of, or similar equity interests in, a Subsidiary or other business unit of the Company (e.g., a spin-off), that are, or, when issued, will be, traded on a securities exchange or quoted on a quotations facility in the U.S. or elsewhere, then the Floor Price will instead be adjusted based on the following formula:

 

 21 

 

 

FP1 = FP0 / [(FMV0 + MP0 ) / MP0]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  FMV0   =    the average of the VWAP of the shares, similar equity interests or other securities distributed to holders of Ordinary Shares applicable to one Ordinary Share over each of the 10 consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such shares, similar equity interests or other securities on the principal exchange or other market on which they are then listed, quoted or traded
     
  MP0   =    the average of the VWAP of the Ordinary Shares over each of the 10 consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution on the principal exchange or other market on which Ordinary Shares is then listed or quoted; and

 

(iv)        the Company or one or more of its Subsidiaries make purchases of Ordinary Shares pursuant to a tender or exchange offer by the Company or a Subsidiary of the Company for Ordinary Shares to the extent (as reasonably determined by the Board of Directors) that the cash and value of any other consideration included in the payment per Ordinary Share validly tendered or exchanged exceeds the VWAP per Ordinary Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / [[FMV + (SP1 x OS1 )] / (SP1 x OS0 )]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Expiration Date
     
  FP1   =    the Floor Price in effect immediately after the Expiration Date
     
  FMV   =    the fair market value (as reasonably determined by the Board of Directors), on the Expiration Date, of the aggregate value of all cash and any other consideration paid or payable for Ordinary Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “Purchased Shares”)

 

 22 

 

 

  OS1   =    the number of Ordinary Shares issued and outstanding as of the last time tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Time”) (treating all Purchased Shares as issued and outstanding at the Expiration Time), less any Purchased Shares
     
  OS0   =    the number of shares of Ordinary Shares issued and outstanding at the Expiration Time, including any Purchased Shares
     
  SP1   =    the average of the VWAP of the Ordinary Shares over each of the 10 consecutive Trading Days commencing on the Trading Day immediately after the Expiration Date.

 

(b)          Calculation of Adjustments. Each adjustment to the Floor Price shall be calculated by the Company as soon as reasonably practicable after the event requiring such adjustment has been consummated (and all factors necessary to calculate such adjustment are known), in each case to the nearest 1/10,000th of one Ordinary Share (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). Notwithstanding anything herein to the contrary, except in the case of a combination or reverse stock split of Ordinary Shares pursuant to Section 9(a)(i), in no case will any adjustment be made if it would result in an increase to the then effective Floor Price. No adjustment to the Floor Price will be required unless such adjustment would require an increase or decrease of at least 1%; provided, however, that any such minor adjustments that are not required to be made, and are not made, will be carried forward and taken into account in any subsequent adjustment; and provided, further, that any such adjustment of less than one percent that has not been made will be made upon (x) the date of any notice of redemption of the Series A Shares in accordance with the provisions hereof and (y) any Conversion Date.

 

(c)          When No Adjustment Required.

 

(i)          Except as otherwise provided in this Section 9, the Floor Price will not be adjusted for the issuance of Ordinary Shares or any securities convertible into or exchangeable for Ordinary Shares or carrying the right to purchase any of the foregoing or for the repurchase of Ordinary Shares.

 

(ii)         No adjustment to the Floor Price need be made:

 

  A.

upon the issuance of any Ordinary Shares pursuant to any present or future customary plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment, at market prices, of additional optional amounts in Ordinary Shares; or 

     
  B. upon the issuance of any Ordinary Shares or options or rights to purchase Ordinary Shares pursuant to any present or future employee or director benefit plan or program of or assumed by the Company or any of its Subsidiaries or other Affiliates; or
     
  C. upon the issuance of any Ordinary Shares pursuant to any option, warrant, right or exercisable, exchangeable or convertible security issued and outstanding as of the date hereof; or

 

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  D. upon the repurchase of any Ordinary Shares pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the nature described under Section 9(a)(iv); or
     
  E. for accrued and unpaid interest, if any.

 

(iii)        No adjustment to the Floor Price will be made to the extent that such adjustment would result in the Conversion Price being less than the par value of the Ordinary Shares.

 

(iv)        Notwithstanding any other provision herein to the contrary, no adjustment shall be made (1) in respect of an event otherwise requiring an adjustment under this Section 10, except to the extent such event is actually consummated or (2) if the holder of the Series A Shares shall be entitled to receive the distribution described under Section 9(a)(i)-(iii) or participate in the event described in Section 9(a)(i)-(iv), whether on an as-converted basis (based on a Conversion Price equal to the higher of (A) a 5.0% discount to the VWAP per Ordinary Share on the Trading Day preceding the ex-date of such distribution and (B) the Floor Price) or due to becoming the record holder of the Ordinary Shares upon the conversion of the Series A Shares.

 

(d)          Record Date. For purposes of this Section 9, “Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Ordinary Shares have the right to receive any cash, securities or other property or in which the Ordinary Shares (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Ordinary Shares entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

 

(e)          Successive Adjustments. After an adjustment to the Floor Price under this Section 9, any subsequent event requiring an adjustment under this Section 9 shall cause an adjustment to such Floor Price as so adjusted.

 

(f)          Multiple Adjustments. For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Floor Price pursuant to this Section 9 under more than one subsection hereof, such event, to the extent taken into account in any adjustment, shall not result in any other adjustment hereunder.

 

(g)          Notice of Adjustments. Whenever a Floor Price is adjusted as provided under this Section 9, the Company shall within 10 Business Days following the occurrence of an event that requires such adjustment (or if the Company is not aware of such occurrence, within 10 Business Days after becoming so aware):

 

(i)          compute the adjusted applicable Floor Price in accordance with this Section 9 and prepare and transmit to the Conversion Agent an Officers’ Certificate setting forth such adjusted applicable Floor Price, the method of calculation thereof in reasonable detail and the facts requiring such adjustment and upon which such adjustment is based; and

 

(ii)         provide a written notice to the Original Holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the applicable Floor Price was determined and setting forth the adjusted applicable Floor Price.

 

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(h)          Conversion Agent. The Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require any adjustment of the applicable Floor Price or with respect to the nature, extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Conversion Agent shall be fully authorized and protected in relying on any Officers’ Certificate delivered pursuant to this Section 9(h) and any adjustment contained therein and the Conversion Agent shall not be deemed to have knowledge of any adjustment unless and until it has received such certificate. The Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any Ordinary Shares, or of any other securities or property, that may at the time be issued or delivered with respect to any Series A Shares; and the Conversion Agent makes no representation with respect thereto. The Conversion Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any Ordinary Shares pursuant to the conversion of Series A Shares or to comply with any of the duties, responsibilities or covenants of the Company contained in this Section 9.

 

(i)          Fractional Shares. No fractions of Ordinary Shares will be issued to holders of the Series A Shares upon conversion. In lieu of fractional shares otherwise issuable, holders will be entitled to receive an amount in cash equal to the fraction of an Ordinary Share, calculated on an aggregate basis in respect of the Series A Shares being converted, multiplied by the Closing Price of the Ordinary Shares on the Trading Day immediately preceding the applicable Conversion Date.

 

Section 10.          Adjustment for Reorganization Events.

 

(a)          Reorganization Events. In the event of:

 

(i)          any consolidation, merger, amalgamation, binding share exchange or reclassification involving the Company in which all or substantially all issued and outstanding Ordinary Shares are converted into or exchanged for cash, securities or other property of the Company or another Person; or

 

(ii)         the completion of any sale or other disposition in one transaction or a series of transactions of all or substantially all the assets of the Company to another Person;

 

each of which is referred to as a “Reorganization Event”, each Series A Share issued and outstanding immediately prior to such Reorganization Event will, without the consent of the Holders of the Series A Shares, become convertible into the kind and amount of securities, cash and other property, if any (the “Exchange Property”), receivable in such Reorganization Event (without any interest thereon, and without any right to dividends or distributions thereon that have a record date that is prior to the applicable Conversion Date) per Ordinary Share by a holder of Ordinary Shares that is not a Person with which the Company effected such consolidation, merger, binding share exchange or reclassification, or to which such sale or other disposition was made, as the case may be (each of the Company and any such other Person, a “Constituent Person”), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Ordinary Shares held by Affiliates and non-Affiliates of the Company; provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each Ordinary Share held immediately prior to such Reorganization Event by a Person other than a Constituent Person or an Affiliate thereof (due to elections or otherwise), then for the purpose of this Section 10(a), the kind and amount of securities, cash and other property receivable upon such Reorganization Event will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Ordinary Shares (other than Constituent Persons and Affiliates thereof) that affirmatively make an election (or of all such holders if none make an election). On each Conversion Date following a Reorganization Event, the Conversion Rate then in effect will be applied to the Exchange Property received per Ordinary Share, as determined in accordance with this Section 10.

 

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(b)          Successive Reorganization Events. The above provisions of this Section 10 shall similarly apply to successive Reorganization Events and the provisions of Section 9 shall apply to any securities of the Company (or any successor) received by the holders of the Ordinary Shares in any such Reorganization Event.

 

(c)          Reorganization Event Notice. The Company (or any successor) shall, within 20 days after the occurrence of any Reorganization Event, provide written notice to the Original Holders of such occurrence of such event and of the kinds and amounts of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 10.

 

Section 11.          Remarketing.

 

(a)          At any time following November 30, 2022, unless a Competing Remarketing is occurring and has not terminated, the Original Holders may elect, at their option, to cause the Company to engage the Remarketing Agent(s) on either a “best efforts” or firm commitment basis at the option of the Company and enter into the Remarketing Agreement to remarket the Series A Shares in accordance with this Section 11 (a “Remarketing”). Each electing Original Holder (collectively, the “Participating Holders”) may have all, but not less than all, of their Series A Shares remarketed in such Remarketing by delivering such Series A Shares, along with written notice of their election (a “Remarketing Notice”), to the Company and the Transfer Agent. The Remarketing Agent(s) shall be selected by the Company, in consultation with the Original Holders, pursuant to Section 11(l). The Original Holders may, as a group, only cause one Remarketing pursuant to this Section 11; provided, that following each Unsuccessful Remarketing hereunder, the Original Holders, as a group, shall be permitted to cause another Remarketing; provided, further, that any remarketing pursuant to Section 11(h) of the Series B Certificate of Designations in which the Original Holders elect to participate shall not be deemed a Remarketing for the purposes of this Certificate of Designations. Nothing in this Section 11 shall preclude the Company from exercising its redemption rights under Section 6(a) at any time permitted thereunder.

 

(b)          Upon receipt of any Remarketing Notice, the Company shall use its reasonable best efforts to engage the Remarketing Agent(s) and enter into the Remarketing Agreement as promptly as practicable, but in any event within 30 days after receipt of such Remarketing Notice (the “Engagement Deadline”). The Company shall notify the Remarketing Agent(s) in writing of the aggregate number of Series A Shares to be remarketed and shall provide such other information and cooperation to the Remarketing Agent(s) as is reasonably necessary or desirable to conduct the Remarketing.

 

(c)          The Company shall cause the Remarketing to be conducted over a period of up to 10 consecutive Business Days (or such longer period as the Company, the Remarketing Agent and the Participating Holders may mutually agree (each such period, a “Remarketing Period”)) selected by the Company, the Remarketing Agent and the Participating Holders that falls during the Remarketing Window. Pursuant to, and subject to the terms of, the Remarketing Agreement, the Company shall cause the Remarketing Agent(s) to use its reasonable best efforts to remarket such Series A Shares at or above the Original Remarketing Price.

 

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(d)          If the Remarketing Agent(s) determine, prior to the commencement of the Remarketing Period, that the Remarketing is unlikely to be successful at or above the Original Remarketing Price on the existing terms of the Series A Shares, then the Remarketing Agent(s) shall notify the Company and the Participating Holders thereof. In such event, the Participating Holders, in connection with the Remarketing, may either (i) terminate the Remarketing by delivery of written notice thereof to the Company (any such terminated Remarketing shall constitute an Unsuccessful Remarketing for purposes of this Certificate of Designations), or (ii) request, in writing, that the dividend rate on all Series A Shares (whether or not remarketed) be increased by the Company to a rate that would allow the Series A Shares to be remarketed at the Original Remarketing Price and, if the Board of Directors so approves, such dividends will be payable quarterly in arrears, commencing on the January 1, April 1, July 1 or October 1 immediately succeeding the Remarketing Settlement Date in accordance herewith, when, as and if declared by the Board of Directors. In addition, pursuant to the terms hereof, (A) the earliest redemption date for the Series A Shares may be changed to be a later date, and (B) such other changes to the terms of the Series A Shares as may be agreed between the Company and the Participating Holders may be made. These modifications shall become effective if the Remarketing is successful, without the consent of the Holders and notwithstanding anything to the contrary in this Certificate of Designations, on the Remarketing Settlement Date. If a Successful Remarketing occurs, the Company will request the Depositary to notify the Depositary Participants holding Series A Shares of any Modified Dividend Rate, Modified Redemption Date, dividend payment dates and other modified terms (any such terms, “Modified Terms”) for the Series A Shares on the Business Day following the date of the Successful Remarketing. Any Modified Terms shall be made with the intention of preserving any then-existing rating agency equity credit for the Series A Shares. In the event of any Remarketing on Modified Terms, the Company shall cause the Remarketing Agent(s) to use its reasonable best efforts to remarket such Series A Shares during the Remarketing Period on the Modified Terms at the highest price reasonably attainable by the Remarketing Agent(s), but, without the prior consent of the Participating Holders, no less than 90% of the Liquidation Preference for the Series A Shares to be remarketed (any such price, a “Modified Remarketing Price”).

 

(e)          If the Remarketing Agent(s) is able to remarket such Series A Shares for a Remarketing Price permitted by this Section 11 in the Remarketing in accordance with the Remarketing Agreement (a “Successful Remarketing”), the Company and the Participating Holders shall cause the Transfer Agent to transfer the remarketed Series A Shares to the Remarketing Agent(s) upon confirmation of the Company’s receipt of proceeds of such Successful Remarketing. Settlement shall occur on the Remarketing Settlement Date. The Remarketing Agent(s) shall remit the proceeds of the Successful Remarketing to the Participating Holders on the Remarketing Settlement Date.

 

(f)          If, in spite of its reasonable best efforts, the Remarketing Agent(s) cannot remarket the Series A Shares as set forth above during the Remarketing Period at a price not less than the Remarketing Price or the Modified Remarketing Price, as applicable, or a condition precedent set forth in the Remarketing Agreement is not fulfilled, the Remarketing will be deemed to have been unsuccessful (an “Unsuccessful Remarketing”). The Company shall notify, in writing, the Participating Holders and the Transfer Agent of the Unsuccessful Remarketing on the Business Day immediately following the last date of the Remarketing Period. Promptly (but in any event within five Business Days) after receipt of written notice from the Company of an Unsuccessful Remarketing, the Transfer Agent will return Series A Shares to the appropriate Holders. The Remarketing to which such any Unsuccessful Remarketing relates shall terminate for all purposes upon the delivery of the notification set forth in the immediately preceding sentence.

 

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(g)          If there is a Successful Remarketing at a Modified Remarketing Price, then the Company shall reimburse (the “Remarketing Reimbursement”) each Participating Holder (the “Reimbursed Holders”) for an amount equal to the excess, if any, of the Liquidation Preference for the Series A Shares that such Reimbursed Holder elected to include in the Remarketing over the aggregate Modified Remarketing Price of such Series A Shares (the “Remarketing Loss”); provided that the Remarketing Loss with respect to any Series A Share shall not exceed 10% of the Liquidation Preference for such Series A Share. The Remarketing Reimbursement may be paid by the Company in cash or by issuing duly authorized and fully paid and nonassessable Ordinary Shares or by a combination thereof, in the Company’s discretion. Any Remarketing Reimbursement to be paid in cash shall be paid to the Reimbursed Holders on the Remarketing Settlement Date. If any portion of the Remarketing Reimbursement is paid by the delivery of Ordinary Shares (such dollar amount, the “Remarketing Loss Share Amount”), then (x) the number of Ordinary Shares deliverable in respect of such portion shall be equal to the result of (i) the portion of the Remarketing Loss being reimbursed in Ordinary Shares, divided by (ii) a dollar amount equal to the higher of (A) an 8.0% discount to the average of the VWAP per Ordinary Share on each of the 30 consecutive Trading Days from, but excluding the Remarketing Settlement Date (the “Remarketing Loss Share Pricing Period”), and (B) $6.00, and (y) such Ordinary Shares shall be delivered to the Reimbursed Holders on the first Business Day following the end of the Remarketing Loss Share Pricing Period plus an amount in cash equal to the Remarketing Interest Amount. The Remarketing Reimbursement shall be treated by the Company and the Original Holders as proceeds from the sale or exchange of Series A Shares for United States federal (and other applicable) tax purposes.

 

(h)          Within five Business Days after receipt of any Remarketing Notice, the Company shall notify the Original Series B Holders (but only if they still hold Series B Shares) of the Remarketing (a “Series B Remarketing Notice”) and provide for a process by which such Original Series B Holders may elect to participate in the Remarketing, subject to the terms of this Section 11(h). The Remarketing Notice shall specify the anticipated timing for the Remarketing and the Engagement Deadline. The electing Original Series B Holders (the “Participating Series B Holders”) may have their Series B Shares remarketed in such Remarketing by delivering their Series B Shares, along with written notice of their election (a “Series B Participation Notice”), to the Company and the Transfer Agent (with a copy of such notice to the Original Holders) by the Engagement Deadline. Any such election shall be irrevocable with respect to such Remarketing. With respect to the remarketing of any Series B Shares included in any Remarketing pursuant to this Section 11(h) (the “Included Series B Shares”): (i) the Included Series B Shares shall be treated equivalently to the Series A Shares; (ii) the Participating Holders shall be entitled to control the Remarketing and make all decisions in respect of the Remarketing pursuant to this Section 11 and the Remarketing Agreement, including the termination of any Remarketing; (iii) the Company shall cause any Modified Terms to be applied to the Series B Shares; and (iv) if the Remarketing Agent(s) advise the Company and the Participating Holders that in its opinion the number of Series A Shares and Included Series B Shares proposed to be included in such Remarketing exceeds the number of Series A Shares and Included Series B Shares which can be sold in such Remarketing without materially delaying or jeopardizing the success of the Remarketing (including the amount of the Remarketing Price for the Series A Shares and Included Series B Shares proposed to be sold in such Remarketing), the Company shall cause the Remarketing Agent(s) to remarket only such number of Series A Shares and Included Series B Shares that in the opinion of such Remarketing Agent(s) can be sold in such Remarketing without materially delaying or jeopardizing the success of the Remarketing (including the amount of the Remarketing Price for the Series A Shares and Included Series B Shares proposed to be sold in such Remarketing), and (v) the Participating Series B Holders shall be liable for the underwriting discounts and commissions in accordance with Section 14(b). The reduced number of Series A Shares and Included Series B Shares to be included in any such Remarketing will be calculated in proportion to the aggregate amount of liquidation preference represented by Series A Shares and Included Series B Shares that were to be included in such Remarketing.

 

(i)          The Company agrees to use its reasonable best efforts to ensure that, if required by applicable law, a registration statement, including a prospectus, under the Securities Act with regard to the full amount of the Series A Shares to be remarketed in the Remarketing in each case shall be effective with the United States Securities and Exchange Commission in a form that may be used by the Remarketing Agent(s) in connection with such Remarketing (unless such registration statement is not required under the applicable laws and regulations that are in effect at that time or unless the Company conducts the Remarketing in accordance with an exemption under the securities laws (including Rule 144A under the Exchange Act)).

 

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(j)          In connection with a Remarketing, the Board of Directors shall determine any Modified Terms pursuant to Section 11(d) after consultation with the Remarketing Agent; provided that any such changes are only those either requested by the Participating Holders or to which the Participating Holders consent. In the event of a Successful Remarketing, the Dividend Rate may be increased, a Modified Redemption Date may be established, and/or other Modified Terms may be established, in each case, on the Remarketing Settlement Date, to the applicable Modified Dividend Rate and/or Modified Redemption Date as determined by the Board of Directors after consultation with the Remarketing Agent(s), and the Company shall (i) notify each of the Transfer Agent and the Conversion Agent by an Officer’s certificate delivered to the Transfer Agent and the Conversion Agent and (ii) request the Depositary to notify its Depositary Participants holding Series A Shares, in each case, of the Modified Terms established for the Series A Shares during the Remarketing on the Business Day following the date of the Successful Remarketing. The Dividend Rate cannot be decreased, and no modification that is detrimental to the Holders can be made, in connection with a Remarketing. Any modified terms of the Series A Shares in connection with a Remarketing shall apply to every Series A Share, whether or not remarketed, and to every Series B Share (without any further action by the holders of Series B Shares). In the event of an Unsuccessful Remarketing, the Dividend Rate and the other terms of the Series A Shares will not be modified.

 

(k)          The Company shall provide the Original Holders (but only if they hold any Series A Shares) with written notice of the termination of any remarketing pursuant to Section 11 of the Series B Certificate of Designations. Any change or modification to the terms of the Series B Shares as a result of any Series B Remarketing shall also be applied to the terms of the Series A Shares (without any further action by the Holders). The Modified Dividend Rate cannot result in an overall rate that is less than the then-applicable Dividend Rate, and no modification that is detrimental to the Holders can be made, in connection with modifications to the Series A Shares resulting from a Series B Remarketing. Any participation by an Original Holder in a Remarketing pursuant to Section 11(h) of the Series B Certificate of Designation shall not constitute a Remarketing pursuant to this Section 11.

 

(l)          The Company shall, within 10 days of the receipt of a Remarketing Notice, select, in consultation with, and subject to the approval of, the Original Holders, the Remarketing Agent(s) for any Remarketing; provided that (A) the Original Holders may not unreasonably withhold, delay or condition their approval and (B) that any Remarketing Agent(s) so selected shall be a financial institution of nationally recognized standing in the United States. The Company shall cause any Remarketing Agreement to contain terms that reflect, and are consistent with, the terms of this Section 11. If the Company fails to select a Remarketing Agent within 10 days of the receipt of a Remarketing Notice, the Original Holders shall select the Remarketing Agent subject to the proviso provided under clause (B) in this Section 11(l).

 

(m)          The Company shall provide written notice of any modifications to the terms of the Series A Shares as a result of a Remarketing or a Series B Remarketing to all Holders within five Business Days after the time any such modifications become effective.

 

Section 12.          Voting Rights.

 

(a)          General. The Holders shall not be entitled to vote on, consent to or take any other action with respect to any matter except as set forth herein or as otherwise required by applicable law.

 

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(b)          Right to Appoint Two Directors Upon Nonpayment Events.

 

(i)          If and whenever dividends on the Series A Shares, or on any other class or series of Parity Dividend Share, have not been declared or paid in an aggregate amount equal, as to any particular class or series, to at least six quarterly dividend periods, whether consecutive or not (a “Nonpayment”), the Holders, together with the holders of any and all classes and series of Parity Dividend Share having “like voting rights” (i.e., being similarly entitled to vote for two additional directors at such time) (the Holders and any such other holders, collectively, the “Voting Holders”), shall have the right, voting separately as a single class without regard to class or series (and with voting rights allocated pro rata based on the liquidation preference of each such class or series), to the exclusion of the holders of Ordinary Shares, to Appoint (as defined below) two additional directors from among such nominees, in the manner provided in this Section 12(b). Each such director Appointed by the Voting Holders pursuant to this Section 12(b) is herein called a “Preferred Share Director.” At no time shall the Board of Directors include more than two Preferred Share Directors.

 

(ii)         Nomination. At any time when the Voting Holders are entitled to Appoint a Preferred Share Director pursuant to this Section 12(b), any one or more of the Holders entitled to receive at least a majority in aggregate liquidation preference of the Series A Shares then issued and outstanding and entitled to Appoint under the terms of such shares, and/or any one or more holders of any other class or series of Parity Dividend Shares having like voting rights then issued and outstanding, shall have the right to recommend individuals to the Company to be Appointed as Preferred Share Directors. Such recommendations shall be in writing and shall be accompanied by a Director Acceptance Letter in the form attached hereto as Exhibit A (“Director Acceptance Letter”), from and signed by each such recommended individual and such background and other information about each such individual as the Company may reasonably request to ensure compliance with applicable disclosure and other considerations pursuant to applicable law and customary practice. The Board of Directors (excluding Preferred Share Directors) will nominate the individuals so recommended for each Preferred Share Director to be elected in accordance with the Articles of Association. The Board of Directors shall submit each recommended individual who it nominates pursuant to this Section 12(b)(ii) to the Voting Holders for Appointment as a Preferred Share Director as provided below.

 

(iii)        Appointment; Vacancy. The Appointment of the Preferred Share Directors by the Voting Holders may take place at any general or special meeting of shareholders or a separate class meeting of Voting Holders, or by means of a written resolution of the Voting Holders in lieu of a meeting thereof, in each case, as the Board of Directors may determine in its reasonable discretion. The Preferred Share Directors to be Appointed shall be so Appointed by a plurality of the votes cast by the Voting Holders at the relevant meeting (or, if the Appointment is effected by written resolution, by the Voting Holders constitution a quorum which shall also be the required voting threshold for purposes of a written resolution), in each case whether or not the number of nominees exceeds the number of individuals to be Appointed. Each of the Preferred Share Directors Appointed hereunder shall, subject to Section 12(b)(v), serve as a director until the next annual general meeting of the Company, or until the earlier of such time as he or she resigns, retires, dies or is removed in accordance with this Certificate of Designations and the Articles of Association or the special voting right pursuant to this Section 12(b) terminates. The Board of Directors shall nominate individuals to succeed such individuals as the Preferred Share Directors, in each case from among recommendations of the Voting Holders, all as provided in Section 12(b)(ii) provided that such recommendations may include any such individuals whose service has ended and, in lieu of selecting nominees from any such recommendations, the Board of Directors may, in its discretion, nominate any or both of such individuals whose service has ended (if willing to serve) for another term as a Preferred Share Director. Each Preferred Share Director shall agree, in the Director Acceptance Letter, to resign as such director when his or her term otherwise ends pursuant to any removal or termination of the special voting right as provided in this Section 12(b). In case any vacancy in the office of a Preferred Share Director occurs due to resignation, retirement, death or removal, the vacancy may be filled by the written consent of the Preferred Share Director remaining in office, or if none remains in office, in an election by Voting Holders as provided above for an initial election. All determinations and other actions to be made or taken by the Board of Directors with regard to Preferred Share Directors pursuant to this Section 12(b) shall be taken by the Board of Directors excluding the Preferred Share Directors, who shall not be entitled to vote with respect to such actions (and thus shall not be included for the purpose of applying any quorum and voting requirements applicable to such actions). The Company will use reasonable best efforts to cause the individuals nominated to be elected as soon as practicable, which will include for the avoidance of doubt, the initial election of any Preferred Share Director, and the election of Preferred Share Directors at any subsequent annual meeting following the initial election of any Preferred Share Director. Subject to the foregoing, each of the Preferred Share Directors shall have one vote as a director.

 

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(iv)        Notice of Meeting; Quorum. The Company shall as soon as practicable, and in no case more than 30 days after the Board of Directors has selected the nominees as provided above, submit such nominees to the Voting Holders for Appointment either (i) at a general or special meeting of the shareholders, (ii) at a separate class meeting of Voting Holders or (iii) by written resolution, as determined by the Board of Directors in its reasonable discretion. Notice for a meeting of Voting Holders may be given in the same manner as that provided in the Articles of Association for a general meeting of the Company. If the Company fails to give notice of a meeting of the shareholders or Voting Holders to Appoint the Preferred Share Directors within 30 days after the Board of Directors has selected the nominees for such Appointment as provided above, any Voting Holders entitled to recommend individuals for election as a Preferred Share Director shall be entitled (at the Company’s expense) to call such a general or special meeting of the shareholders or a separate class meeting of Voting Holders to Appoint such nominees selected by the Board of Directors, and for that purpose will have access to the register of members of the Company. At any separate class meeting of Voting Holders at which the Voting Holders have the right to Appoint the Preferred Share Directors, or at any adjournment thereof, the presence of at least one Person holding or representing by proxy at least 50% in aggregate liquidation preference of the Series A Shares and all other classes and series of Parity Dividend Share having like voting rights, in each case at the time issued and outstanding, will be required to constitute a quorum for the election of any Preferred Share Director. Such quorum requirement shall also apply with respect to any Appointment of Preferred Share Directors to be effected with the consent of Voting Holders given in a written resolution. At any general or special meeting of the shareholders or a separate class meeting of the Voting Holders, or adjournment thereof, the absence of such a quorum of Voting Holders will not prevent the election of directors other than the Preferred Share Directors, and the absence of a quorum for the election of such other directors will not prevent the Appointment of the Preferred Share Directors. The Company may fix a date as the record date for the purpose of determining the issued and outstanding preferred shares of any class or series, and the Holders and other holders thereof entitled to elect the Preferred Share Directors.

 

(v)         Appointment to Board. “Appoint” as used in this Section 12(b) shall mean the appointment of a Preferred Share Director to the Board of Directors; provided that, to the extent that such action is not permitted by the Articles of Association, “Appoint” shall mean nomination by the Voting Holders pursuant to this Section 12(b) and the use of reasonable best efforts by the Company to cause such Preferred Share Director to be appointed by the Board of Directors, or elected by the shareholders, to the Board of Directors pursuant to the Articles of Association as soon as is practicable.

 

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(vi)        Termination; Removal. Whenever the Company has paid cumulative dividends in full on the Series A Shares and any other class or series of cumulative Parity Dividend Shares, then the right of the Holders to Appoint the Preferred Share Directors will cease (but subject always to the same provisions for the vesting of the special voting right in the case of any Nonpayment in respect of future Dividend Periods). The terms of office of the Preferred Share Directors will immediately terminate, and the Board of Directors shall resolve to reduce the number of directors constituting the Board of Directors by two. In addition, any Preferred Share Director may be removed at any time for cause by Voting Holders holding a majority in aggregate Liquidation Preference of the aggregate liquidation preference of the Series A Shares, together with all classes and series of Parity Dividend Share having like voting rights, voting separately as a single class without regard to class or series (and with voting rights allocated pro rata based on the liquidation preference of each such class or series), to the exclusion of the holders of Ordinary Shares, at a general or special meeting of the Company or a separate class meeting of Voting Holders called by the Company as provided in Section 12(b)(iv) above. In addition, if the Board of Directors determines in its discretion at any time that there is cause for the shareholders to remove such director, the Board of Directors may in its discretion request that such director resign from the Board of Directors and may require that such director, as a condition to his or her initial election, agree in writing pursuant to his or her Director Acceptance Letter (as provided in Exhibit A hereto) to resign upon any such request. Upon the removal of any Preferred Share Director, the vacancy shall be filled in the manner set forth in Section 12(b)(iii). Notwithstanding the foregoing, if at any time there are no Series A Shares issued and outstanding, each Preferred Share Director’s term shall automatically terminate and no directors shall thereafter be appointed or elected pursuant to this Section 12.

 

(c)          Other Voting Rights. So long as any Series A Shares are issued and outstanding, the Company may not consummate any action specified in this paragraph (c) without the vote or consent of the Holders of record entitled to receive at least a majority in aggregate of the Liquidation Preference of the Series A Shares at the time issued and outstanding and all voting or consenting as a single class (not including any Series A Shares “beneficially owned” (within the meaning of the Exchange Act) by the Company or any of its Affiliates), to the exclusion of the holders of Ordinary Shares:

 

(i)          any amendment, alteration or repeal of any provision of the Articles of Association or this Certificate of Designations that would alter or change the voting powers, preferences or special rights of the Series A Shares so as to affect them adversely;

 

(ii)         any authorization or creation of, or increase in the authorized amount of, or issuance of, any Senior Shares or Parity Shares, and any increase in the authorized number of Series A Shares or Series B Shares;

 

(iii)        any consolidation, merger, amalgamation, binding share exchange or reclassification involving the Company, except that, subject to applicable law, Holders of Series A Shares will have no right to vote or consent under this clause (iii) by reason of any such transaction if (A) the Series A Shares remain issued and outstanding or, in the case of any such transaction with respect to which the Company is not the surviving or resulting issuer, is converted into or exchanged for preferred securities of the surviving or resulting entity or its ultimate parent (provided that such entity is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia or any jurisdiction in the European Economic Area, and is a corporation for U.S. federal income tax purposes (or if such entity is not a corporation for such purposes, the Company receives an opinion of nationally recognized counsel experienced in such matters to the effect that Holders will be subject to tax for U.S. federal income tax purposes with respect to such new preferred securities after such transaction in the same amount, at the same time and otherwise in the same manner as would have been the case under the Series A Shares prior to such transaction)), (B) the Series A Shares remaining issued and outstanding or such other preferred securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series A Shares, taken as a whole, and (C) upon the completion of any such any consolidation, merger, amalgamation, binding share exchange or reclassification, no condition shall exist with respect to the surviving or resulting issuer that would require a consent pursuant to Sections 12(c)(i), (ii), (v) or (vii) if such surviving or resulting issuer were the Company;

 

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(iv)        any Change of Control if an Original Holder is a Holder of any Series A Shares at the time of the occurrence of such Change of Control, unless, prior to such occurrence, such Original Holder has either (1) received a bona fide, binding offer from a credible Person which, if accepted by the Original Holder, would result in the sale of all of such Original Holder’s Series A Shares to such Person prior to or contemporaneously with the completion of such Change of Control at a price equal to or greater than the then-current Liquidation Preference; provided that such offering Person shall not be Affiliated with or an agent of any Person or group participating in the Change of Control, or (2) provided its prior written consent to such Change of Control;

 

(v)         any incurrence of Indebtedness (as defined in the Credit Agreement as in effect on the Original Issue Date (and regardless of whether such Credit Agreement is later terminated, amended or modified)) by the Company or any intermediate holding company between the Company and CF Bermuda Holdings;

 

(vi)        any issuance or reclassification of equity securities by the Company, unless all securities into which such equity securities are reclassified are held by or one or more entities 100.0% of the equity of which is owned directly or indirectly by the Company; and

 

(vii)       take any action or permit any omission that would be in breach of Articles 6 and 7 of the Credit Agreement as in effect on the Original Issue Date (disregarding the preamble at the start of each Article 6 and 7, assuming the remainder of Articles 6 and 7 remain in full force and effect at all times, and regardless of whether such Credit Agreement, or any term thereof, lapses, is terminated, amended or modified), in each case, with such modifications as appropriate to reflect the passage of time and any changes in facts and circumstances as they relate to the Company and its Subsidiaries; provided that no waiver of any right or obligation contained in the foregoing provisions by any party to the Credit Agreement shall constitute a waiver of such provision for purposes of this Section 12(c)(vii);

 

provided, however, that any increase in the amount of the authorized or issued, or any creation of, any other preferred shares ranking junior to the Series A Shares with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets following the commencement of the Company’s winding up, or any authorization, issuance or creation of any securities convertible into, or exercisable or exchangeable for, any such other preferred shares will not be deemed to adversely affect the voting powers, preferences or special rights of the Series A Shares and Holders will have no right under this Section 12(c) to vote on or consent to any such increase, authorization, issuance or creation.

 

If the Holders are entitled to vote on or consent to a specified action pursuant to this Section 12(c), the Company may call a separate class meeting of the Holders for the purpose of such vote. Any such vote may be held at a general meeting of the Company, or at a separate class meeting of the Holders and such other holders, as the Company may determine in its discretion. The Company may fix a date as the record date for the purpose of determining the issued and outstanding Series A Shares, and the Holders entitled to vote on or consent to any such specified action. At any general meeting of the Company or Holders where such vote is to occur, the necessary quorum for such vote (or consent) shall be at least one Person holding or representing by proxy at least 50% in aggregate liquidation preference of the Series A Shares entitled to vote on the relevant specified action.

 

(d)          Changes Without the Consent of the Holders. So long as such action does not adversely affect the special rights, preferences, privileges or voting powers of the Series A Shares, and limitations and restrictions thereof, the Company may amend, alter, supplement, or repeal any terms of the Series A Shares without the consent of the Holders, to reflect any Modified Terms of the Series A Shares in connection with a Successful Remarketing pursuant to Section 11, or any amended or modified terms of the Series B Shares to be applied to the Series A Shares pursuant to Section 11(k).

 

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(e)          Changes After Provision for Redemption; Unredeemed Shares Remain Outstanding.

 

(i)          No vote or consent of the holders of Series A Shares shall be required pursuant to Section 12(b) or (c) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding Series A Shares shall have been redeemed or called for redemption and the funds necessary for payment of the Redemption Price have been deposited in Trust for the pro rata benefit of the Holders of the shares called for redemption.

 

(ii)         In the event of a Change of Control or Reorganization Event in which the Company’s Ordinary Shares shall be changed into or exchanged for other securities or property (including cash), the successor or acquiring Person shall expressly assume the due and punctual observation and performance of each and every covenant and condition contained in this Certificate of Designation to be performed and observed by the Company and all the obligations and liabilities hereunder, with such modifications and adjustments as equitable and appropriate in order to place the Holders in the equivalent economic position as prior to such Change of Control or Reorganization Event.

 

Section 13.          Preemption.

 

The Holders shall not have any rights of preemption with regard to any share capital (including Ordinary Shares and Preferred Shares).

 

Section 14.          Payments; Expenses; Notices; Information.

 

(a)          Payment. Any payment due by the Company with respect to dividends, redemptions, fractional shares or other amounts on a day that is not a Business Day may be made on the next succeeding Business Day with the same force and effect as if made on the original due date, and without any interest due to any delay in payment.

 

(b)          Expenses. The Company shall bear any costs and expenses incurred by it and its Affiliates in connection with the Remarketing (including any Remarketing Fee) pursuant to this Certificate of Designations, and shall promptly pay or reimburse the Original Holders for any costs or expenses (including the Remarketing Fee, underwriting discounts or commissions and any reasonable fees and expenses of counsel) incurred by such Original Holders in connection therewith; provided, that the Participating Holders and the Participating Series B Holders (if any) shall bear 50% of any underwriting discounts or commissions for any “best efforts” underwriting incurred in connection with such Remarketing, with such amounts allocated in proportion to the Series A Shares and the Included Series B Shares that participate in such Remarketing.

 

(c)          Notices. Any notices, deliveries or other actions required or permitted to be given, made or taken by the Company or any Holder hereunder on a particular day may be effected on the next succeeding Business Day with the same force and effect as if effected on the particular day. All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (or by first-class mail if the same shall be specifically permitted for such notice under the terms of this Certificate of Designations) with postage prepaid, addressed: (i) if to the Company, to its office at 1701 Village Center Circle, Las Vegas, Nevada 89134 (Attention: Secretary) or to the Transfer Agent at its office at Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, New York 10004 (Attention: Mark Zimkind]), or to any other agent of the Company designated to receive such notice as permitted by this Certificate of Designations; or (ii) if to any Holder, to such Holder at the address of such Holder as listed in the share record books of the Company (which may include the records of the Transfer Agent); or (iii) to such other address as the Company or any such Holder, as the case may be, shall have designated by notice similarly given. Notwithstanding the foregoing, any notice given by the Company to Holders in respect of a Global Preferred Share pursuant to the applicable procedures of the Depositary shall be deemed to have been given effectively when so given.

 

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(d)          Information. If at any time the Company is not required to file reports with the United States Securities and Exchange Commission, if any Series A Shares are then outstanding, the Company shall provide the Holders with reports containing financial information substantially similar to the financial information that would have been contained in the reports the Company would have been required to file with the United States Securities and Exchange Commission by Section 13(a) or 15(d) under the Exchange Act if it were subject thereto, in each case at such times as such reports or other information would be required to be filed thereunder.

 

Section 15.          Repurchase.

 

Subject to the limitations imposed herein, applicable law and the Articles of Association, the Company may purchase Series A Shares from time to time to such extent, in such manner and upon such terms as the Board of Directors or any duly authorized committee thereof may determine; provided, however, that the Company shall not use any of its funds for any such purchase when there are reasonable grounds to believe that the Company is, or after such purchase would be, unable to pay its liabilities in the ordinary course as they become due.

 

Section 16.          Unissued or Reacquired Shares.

 

Series A Shares that have been issued and converted, redeemed or otherwise purchased or acquired by the Company shall be restored to the status of authorized but unissued Preferred Shares without designation as to class or series, until such shares are once more designated as part of a particular class or series by the Board of Directors.

 

Section 17.          No Sinking Fund.

 

Series A Shares are not subject to the operation of a sinking fund.

 

Section 18.          Reservation of Ordinary Shares.

 

(a)          Sufficient Shares. The Company shall at all times reserve and keep available out of its authorized and unissued Ordinary Shares or shares acquired by the Company, solely for issuance upon the conversion of Preferred Shares as provided in this Certificate of Designations, free from any preemptive or other similar rights, such number of shares of Ordinary Shares as shall from time to time be issuable upon the conversion of all the Preferred Shares then issued and outstanding. For purposes of this Section 18(a), the number of Ordinary Shares that shall be deliverable upon the conversion of all issued and outstanding Preferred Shares shall be computed as if at the time of computation all such outstanding shares were held by a single Holder.

 

(b)          Use of Acquired Shares. Notwithstanding the foregoing, the Company shall be entitled to deliver upon conversion of Series A Shares, as herein provided, Ordinary Shares acquired by the Company (in lieu of the issuance of authorized and unissued Ordinary Shares), so long as any such acquired shares are free and clear of all liens, charges, security interests or encumbrances (other than liens, charges, security interests and other encumbrances created by the Original Holders).

 

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(c)          Free and Clear Delivery. All Ordinary Shares delivered upon conversion of the Series A Shares shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests and other encumbrances (other than liens, charges, security interests and other encumbrances created by the Original Holders).

 

(d)          Compliance with Law. Prior to the delivery of any securities that the Company shall be obligated to deliver upon conversion of the Series A Shares, the Company shall use its reasonable best efforts to comply with all laws and regulations thereunder requiring the approval of such delivery by any Regulatory Entities.

 

(e)          Listing. The Company hereby covenants and agrees that, if at any time the Ordinary Shares shall be listed on the New York Stock Exchange or any other securities exchange or quotation system, the Company will, if permitted by the rules of such exchange or quotation system, list and keep listed, so long as the Ordinary Shares shall be so listed on such exchange or quotation system, all the Ordinary Shares then issuable upon conversion of the Series A Shares.

 

Section 19.          Transfer Agent, Conversion Agent, Registrar and Paying Agent.

 

The duly appointed Transfer Agent, Conversion Agent, Registrar and paying agent for the Series A Shares shall be Continental Stock Transfer & Trust Company. The Company may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Company and the Transfer Agent; provided that the Company shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal. Upon any such removal or appointment, the Company shall send notice thereof by first-class mail, postage prepaid, to the Holders (or otherwise pursuant to any applicable procedures of a Depositary).

 

Section 20.          Replacement Certificates.

 

(a)          Mutilated, Destroyed, Stolen and Lost Certificates. If physical certificates are issued, the Company shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Transfer Agent. The Company shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Company and the Transfer Agent of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity on customary terms that may be required by the Transfer Agent and the Company.

 

(b)          Certificates Following Conversion. If physical certificates are issued, the Company shall not be required to issue any certificates representing the applicable Series A Shares on or after the applicable Conversion Date. In place of the delivery of a replacement certificate following the applicable Conversion Date, the Transfer Agent, upon delivery of the evidence and indemnity described in Section 20(a), shall deliver the Ordinary Shares pursuant to the terms of the Series A Shares formerly evidenced by the certificate.

 

(c)          Legends. Certificates for Series A Shares and any Ordinary Shares issued on conversion thereof may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Company is subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Company).

 

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Section 21.          Form.

 

(a)          Global Preferred Shares. Series A Shares may, at the Company’s option, in its sole discretion, be issued in the form of one or more permanent global Series A Shares in definitive, fully registered form with a global legend in substantially the form attached hereto as Exhibit B (each, a “Global Preferred Share”), which is hereby incorporated in and expressly made a part of this Certificate of Designations. The Global Preferred Shares may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). The aggregate number of shares represented by each Global Preferred Share may from time to time be increased or decreased by adjustments made on the records of the Registrar and the Depositary or its nominee as hereinafter provided. Global Preferred Shares shall be registered in the name of the Depositary, which shall be the Holder of such shares. This Section 21(a) shall apply only to a Global Preferred Share deposited with or on behalf of the Depositary.

 

(b)          Delivery to Depositary. If Global Preferred Shares are issued, the Company shall execute and the Registrar shall, in accordance with this Section 21, countersign and deliver initially one or more Global Preferred Shares that (i) shall be registered in the name of a nominee of the Depositary and (ii) shall be delivered by the Registrar to the Depositary or pursuant to instructions received from the Depositary or held by the Registrar as custodian for the Depositary pursuant to an agreement between the Depositary and the Registrar.

 

(c)          Agent Members. If Global Preferred Shares are issued, members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Certificate of Designations with respect to any Global Preferred Share held on their behalf by the Depositary or by the Registrar as the custodian of the Depositary or under such Global Preferred Share, and the Depositary may be treated by the Company, the Registrar and any agent of the Company or the Registrar as the absolute owner of such Global Preferred Share for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Registrar or any agent of the Company or the Registrar from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Preferred Shares. If Global Preferred Shares are issued, the Depositary may grant proxies or otherwise authorize any Person to take any action that a Holder is entitled to take pursuant to the Series A Shares, this Certificate of Designations or the Articles of Association.

 

(d)           Physical Certificates. Global Preferred Shares will be exchangeable for other certificates evidencing Series A Shares, only if (x) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for the Global Preferred Share and the Company does not appoint a qualified replacement for the Depositary within 90 days, (y) the Depositary ceases to be a “clearing agency” registered under the Exchange Act and the Company does not appoint a qualified replacement for the Depositary within 90 days or (z) the Company determines that the Series A Shares shall no longer be represented by Global Preferred Shares. In any such case, the Global Preferred Shares shall be exchanged in whole for other definitive Series A Shares in registered form, with the same terms and of an equal aggregate Liquidation Preference. Such other definitive Series A Shares shall be registered in the name or names of the Person or Persons specified by the Depositary in a written instrument to the Registrar.

 

 37 

 

 

(e)          Signature. An Officer shall sign any Global Preferred Share for the Company, in accordance with the Company’s Articles of Association and applicable law, by manual or facsimile signature. If an Officer whose signature is on a Global Preferred Share no longer holds that office at the time the Transfer Agent countersigned the Global Preferred Share, the Global Preferred Share shall be valid nevertheless. A Global Preferred Share shall not be valid until an authorized signatory of the Transfer Agent manually countersigns the Global Preferred Share. Each Global Preferred Share shall be dated the date of its countersignature.

 

Section 22.          Transfer and Similar Taxes.

 

The Company shall pay any and all share transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of Series A Shares or Ordinary Shares or other securities issued on account of Series A Shares pursuant hereto or certificates representing such shares or securities. The Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of Series A Shares, Ordinary Shares or other securities in a name other than that in which the Series A Shares with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid or is not payable.

 

Section 23.          Rights of Holders.

 

No person or entity, other than the person or entity in whose name a certificate representing the Series A Shares is registered (if any) and whose name is registered as an owner of Series A Shares in the register of members of the Company, shall have any rights hereunder or with respect to the Series A Shares, the Company shall recognize the registered owner thereof in the register of members of the Company as the sole owner for all purposes, and no other person or entity (other than the Company) shall have any benefit, right, claim or remedy hereunder.

 

Section 24.          Other Rights.

 

The Series A Shares shall not have any voting powers, preferences or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Articles of Association or as provided by applicable law.

 

Section 25.          Conflict.

 

To the extent the terms provided in this Certificate of Designations conflict with the terms contained in the Articles of Association, it is intended that the terms provided in this Certificate of Designations shall prevail. The Company agrees and undertakes to convene any general meeting of the Company, and to recommend that any such meeting adopt any resolution necessary, to amend the Articles of Association to eliminate any such conflict.

 

[Reminder of Page Intentionally Left Blank]

 

 38 

 

  

EXHIBIT A

 

FORM OF DIRECTOR’S ACCEPTANCE LETTER

 

TO: FGL HOLDINGS (the “Company”)

 

Attn: The Secretary

 

I hereby accept and agree to my appointment or election as a Preference Share Director, in accordance with the Certificate of Designations of Series A Cumulative Convertible Preference Shares of the Company, dated [ ], 2017 (the “Certificate of Designations”). I hereby agree and acknowledge that my term of office shall immediately terminate in accordance with Section 12 of the Certificate of Designations without further action being required on my part.

 

I designate the following telephone and facsimile numbers and e-mail address for service of notice of all directors’ meetings. Notice by telephone facsimile or e-mail to either of the said numbers or e-mail address will constitute good and sufficient notice to myself and I agree to advise you of any change in these particulars.

 

Tel: [     ]

Fax: [     ]

E-mail: [     ]

Nationality: [     ]

 

I hereby authorize you to enter my name and address in the register of Directors and Officers of the Company as follows:

 

[Name]

[Address]

  

[Name]

 

 A-1 

 

 

EXHIBIT B

 

FORM OF

 

SERIES A CUMULATIVE CONVERTIBLE PREFERENCE SHARES

 

FACE OF SECURITY

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (AND THOSE ISSUABLE ON CONVERSION THEREOF) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY U.S. STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT, AND IN ACCORDANCE WITH ALL APPLICABLE U.S., STATE AND OTHER SECURITIES LAWS. THIS CERTIFICATE IS ISSUED PURSUANT TO AND IS SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF AN INVESTMENT AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF [], 2017 BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTORS REFERRED TO THEREIN, COPIES OF WHICH ARE ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE (AND THOSE ISSUABLE ON CONVERSION THEREOF) MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENTS, AND ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENTS WILL BE VOID.

 

[IF GLOBAL PREFERENCE SHARES ARE ISSUED: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, AND NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS REFERRED TO BELOW.]

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT MAY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

 B-1 

 

 

Certificate Number   Number of Convertible Preference Shares
     
CUSIP NO.: [            ]    

 

Series A Cumulative Convertible Preference Shares

 

(par value $0.0001 per share)

 

of

 

FGL HOLDINGS

 

FGL HOLDINGS, an exempted company incorporated and existing under the Companies Law (2016 Revision) of the Cayman Islands (the “Company”), hereby certifies that [            ] (the “Holder”) is the registered owner of [·] [             , or such number as is registered in the name of the Holder in the Company’s register of members maintained by the Registrar] fully paid and non-assessable preference shares of the Company designated the Series A Cumulative Convertible Preference Shares, with a par value of $0.0001 per share and a liquidation preference of US$1,000.00 (the “Convertible Preference Shares”).

 

The Convertible Preference Shares are subject to the Certificate of Designations and the amended and restated memorandum and articles of association of the Company and are transferable in accordance therewith. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Convertible Preference Shares represented hereby are issued and shall in all respects be subject to the provisions of the Certificate of Designations dated [·], 2017 as the same may be amended from time to time (the “Certificate of Designations”). Capitalized terms used, but not defined herein, shall have the meaning given to them in the Certificate of Designations.

 

Reference is hereby made to select provisions of the Convertible Preference Shares set forth on the reverse hereof, and to the Certificate of Designations, which select provisions and the Certificate of Designations shall for all purposes have the same effect as if set forth at this place.

 

Upon receipt of this certificate, the Holder is bound by the Certificate of Designations and is entitled to the benefits thereunder.

 

Unless the Registrar has properly countersigned this certificate, the Convertible Preference Shares evidenced hereby shall not be entitled to any benefit under the Certificate of Designations or be valid or obligatory for any purpose.

 

Dated:

 

 B-2 

 

 

REVERSE OF SECURITY

 

Dividends on each of the Convertible Preference Shares shall be payable at the rate provided in the Certificate of Designations but only when, as and if declared by the Board of Directors as provided therein.

 

The Convertible Preference Shares shall be convertible in the manner and in accordance with the terms set forth in the Certificate of Designations.

 

The Convertible Preference Shares shall be redeemable at the option of the Company in the manner and in accordance with the terms set forth in the Certificate of Designations.

 

The Convertible Preference Shares carry voting rights as specified in the Certificate of Designations.

 

The Company shall furnish without charge to each holder who so requests the powers, designations, preferences and special rights of each class or series of share capital issued by the Company and the qualifications, limitations or restrictions on such powers, preferences and rights.

 

For value received,                                          hereby sell, assign and transfer unto

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

 

of the Convertible Preference Shares represented by the within Certificate, and such shares are subject to the Certificate of Designations and the memorandum of association and Articles of Association of the Company and are transferable in accordance therewith.

 

Dated:                                             20            
     
Signature:                                                                                                                     
     
Signature:                                                                                                                     

 

    Notice:   The signature to this assignment must correspond
with the name as written upon the face of the
certificate, in every particular, without alteration or
enlargement, or any change whatever.
   

 

 B-3 

(Back To Top)

Section 4: EX-3.3 (EXHIBIT 3.3)

 

Exhibit 3.3

 

EXECUTION VERSION

 

CERTIFICATE OF DESIGNATIONS

 

OF

 

SERIES B CUMULATIVE CONVERTIBLE PREFERRED SHARES

 

OF

 

FGL HOLDINGS

 

FGL HOLDINGS, an exempted company incorporated and existing under the laws of the Cayman Islands (the “Company”), does hereby certify:

 

That the Board of Directors of the Company (the “Board of Directors”), pursuant to the authority conferred upon the Board of Directors by the provisions of the Amended and Restated Memorandum and Articles of Association of the Company and applicable law, by way of written resolution dated November 30, 2017, duly adopted resolutions creating a class of preferred shares of the Company designated as “Series B Cumulative Convertible Preferred Shares”.

 

Section 1.          Designation. The designation of the class of preferred shares shall be “Series B Cumulative Convertible Preferred Shares” (the “Series B Shares”). Each Series B Share shall be identical in all respects to every other Series B Share. The Series B Shares will rank, on the terms set forth in Section 4(c) and Section 5, equally with Parity Shares and senior to Junior Shares, with respect to the payment of dividends and/or the distribution of assets following the commencement of any voluntary or involuntary liquidation of the Company.

 

Section 2.          Number of Shares. The number of authorized Series B Shares shall be 275,000, provided, that an additional 325,000 Series B Shares shall be authorized for issuance solely as PIK Shares. That number from time to time may be increased solely with the affirmative vote or consent of the holders of the Series B Shares pursuant to Section 12 and the Board of Directors; provided that no such increase shall be permitted that would cause the total number of authorized Preferred Shares, including the Series B Shares, to exceed the amount of Preferred Shares authorized by the Articles of Association.

 

Section 3.          Definitions. As used herein with respect to the Series B Shares:

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this Certificate of Designations, “control”, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

Agent Members” has the meaning set forth in Section 21(c).

 

Appoint” has the meaning set forth in Section 12(b)(v).

 

AOI” means, for any period, the adjusted operating income of the Company, calculated on a basis consistent with that adopted by Fidelity & Guaranty Life for the 2016 fiscal year, as reflected in its publicly filed financial statements.

 

 1 

 

 

Arrearage” has the meaning set forth in Section 4(b).

 

Articles of Association” means the Second Amended and Restated Memorandum and Articles of Association of the Company, as they may be amended from time to time, and shall include this Certificate of Designations and the certificate of designations for any other authorized class of Preferred Shares.

 

Blackstone Funds” means, individually or collectively, any investment fund, coinvestment vehicles and/or other similar vehicles or accounts, in each case, managed by an Affiliate of The Blackstone Group L.P., or any of their respective successors.

 

Board of Directors” has the meaning set forth in the Recitals or a committee thereof duly authorized to act for such Board of Directors.

 

Business Day” means each weekday on which banking institutions in New York, New York are not authorized or obligated by law, regulation or executive order to close.

 

Calculation Agent” means the Transfer Agent acting in its capacity as calculation agent for the Series B Shares, and its successors and assigns.

 

Capital Stock” of any Person means (i) with respect to any Person that is a corporation or a company, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Ordinary Shares or Preferred Shares, and (ii) with respect to any Person that is not a corporation or a company, any and all partnership, limited liability company, membership or other equity interests of such Person, but in each case excluding any debt securities convertible into any of the foregoing.

 

Certificate of Designations” means this Certificate of Designations relating to the Series B Shares, as it may be amended from time to time.

 

Change of Control” means the occurrence of one of the following:

 

(i)          a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than a Permitted Holder, becomes or files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Ordinary Shares or other common equity of the Company representing more than 50% of the voting power of the issued and outstanding Ordinary Shares or other common equity of the Company;

 

(ii)         one or more Permitted Holders become, or commence a tender, exchange or similar offer and/or file a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such Permitted Holder(s) intends to become, in the aggregate, the direct or indirect ultimate “beneficial owners,” as defined in Rule 13d-3 under the Exchange Act, of Ordinary Shares or other common equity of the Company representing more than 60% of the voting power of the outstanding Ordinary Shares or other common equity of the Company; or

 

(iii)        consummation of any consolidation, merger, amalgamation or scheme of arrangement of or involving the Company or similar transaction or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the property and assets of the Company to any Person other than one of the Company’s Subsidiaries, in each case pursuant to which the Ordinary Shares or other common equity of the Company will be converted into cash, securities or other property, other than pursuant to a transaction in which (A) the Persons that “beneficially owned” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, voting shares of the Company immediately prior to such transaction beneficially own, directly or indirectly, voting shares representing a majority of the total voting power of all issued and outstanding classes of voting shares of the continuing or surviving Person immediately after such transaction, or (B) the members of the Board of Directors or other governing body of the Company immediately prior to such transaction comprise a majority of the members of the Board of Directors or other governing body of the Company or such other continuing or surviving Person immediately after such transaction.

 

 2 

 

 

Closing Price” of the Ordinary Shares on any date of determination means the last reported sale price of the Ordinary Shares regular way on such date (or, if no such sale occurs on such date, the average of the reported closing bid and asked prices for such shares regular way on such date) on the Principal Market or, if there is no Principal Market for the Ordinary Shares, the average of the closing bid and asked prices quoted for the Ordinary Shares in the over-the-counter market as reported by OTC Markets Group Inc. or any similar organization, or if such closing prices are not so reported (or if the relevant price or prices required to be used to calculate the Closing Price as provided in this paragraph are not available in the relevant market on such date for any reason, the market price of the Ordinary Shares on such date as determined by a nationally recognized investment banking firm retained by the Company for this purpose).

 

Company” has the meaning set forth in the Recitals.

 

Competing Remarketing” means any ongoing Remarketing pursuant to Section 11, and any ongoing remarketing of the Series A Shares pursuant to Section 11 of the Series A Certificate of Designations; provided that no such Remarketing or remarketing shall be deemed to be ongoing past the applicable Remarketing Window for such Remarketing.

 

Constituent Person” has the meaning set forth in Section 10(a)(ii).

 

Conversion Agent” means the Transfer Agent acting in its capacity as conversion agent for the Series B Shares, and its successors and assigns.

 

Conversion Date” has the meaning set forth in Section 8(d).

 

Conversion Notice Date” has the meaning set forth in Section 8(d).

 

Conversion Price” means, at any time, a dollar amount equal to the higher of (i) a 5.0% discount to the arithmetic average of the VWAP per Ordinary Share on each of the 30 consecutive Trading Days from, but excluding the Conversion Notice Date, and (ii) the Floor Price.

 

Conversion Rate” means, at any time, the number of duly authorized, fully paid and nonassessable Ordinary Shares into which each Series B Share is convertible, after taking into account any adjustments pursuant to Section 9, determined by dividing (i) the Liquidation Preference (calculated as if the Conversion Date was the date fixed for liquidation the Company, and as adjusted pursuant hereto for share splits, share dividends, reclassifications and the like), by (ii) the Conversion Price.

 

Credit Agreement” means the Credit Agreement, dated as of November 30, 2017, by and among Fidelity & Guaranty Life Holdings, Inc., a Delaware corporation, CF Bermuda Holdings Limited, a Bermuda exempted limited liability company, the lenders from time to time a party thereto and Royal Bank of Canada, as administrative agent for the lenders and the other agents and arrangers party thereto.

  

 3 

 

 

Current Market Price” as of any day means the average of the VWAP per Ordinary Share on each of the 10 consecutive Trading Days ending on the earlier of the day in question and the day before the Ex-date or other specified date with respect to the issuance or distribution requiring such computation, appropriately adjusted to take into account the occurrence during such period of any event described in Section 9. For the purpose of calculating the Current Market Price, consecutive Trading Days shall end on the day before the date in question.

 

Depositary” means DTC or its nominee, or any successor depositary appointed by the Company or its nominee.

 

Director Acceptance Letter” has the meaning set forth in Section 12(b)(ii).

 

Dividend Payment Date” has the meaning set forth in Section 4(a)(i). Each Dividend Payment Date “relates” to the Dividend Period most recently ending before such Dividend Payment Date, and vice versa (with the words “related” and “relating” having correlative meanings).

 

Dividend Period” means each period from and including a Dividend Payment Date (except that the initial Dividend Period shall commence on the Original Issue Date, and the initial Dividend Period for any Series B Shares issued in kind pursuant to Section 4 shall commence on the date such Series B Shares are issued) and continuing to but not including the next succeeding Dividend Payment Date.

 

Dividend Rate” means (i) for any day during the Fixed Rate Period, 7.5%, and (ii) for any date during the Floating Rate Period, the greater of (A) 7.5% and (B) a rate equal to Three-month LIBOR plus 5.5%; provided that in the event of an Modified Dividend Rate, such Modified Dividend Rate shall be the Dividend Rate.

 

Dividend Record Date” has the meaning specified in Section 4(a)(iii).

 

DTC” means The Depository Trust Company.

 

Engagement Date” has the meaning set forth in the definition of “Remarketing Window”.

 

Engagement Deadline” has the meaning set forth in Section 11(b).

 

Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

 

Exchange Property” has the meaning set forth in Section 10(a)(ii).

 

Ex-date”, when used with respect to any issuance or distribution, means the first date on which the Ordinary Shares or other relevant securities trade without the right to receive such issuance or distribution.

 

Expiration Date” has the meaning set forth in Section 9(a)(iv).

 

Expiration Time” has the meaning set forth in Section 9(a)(iv).

 

Fixed Rate Period” means each Dividend Period relating to a Dividend Payment Date occurring on or before November 30, 2027.

 

Floating Rate Period” means each Dividend Period relating to a Dividend Payment Date occurring after November 30, 2027.

 

 4 

 

 

Floor Price” means (i) for a Conversion Date from and including November 30, 2027 to but not including November 30, 2028, $8.00, (ii) for a Conversion Date from and including November 30, 2028 to but not including November 30, 2029, $7.00, and (iii) for a Conversion Date from and after November 30, 2029, $6.00, in each case after taking into account any adjustment pursuant to Section 9.

 

FNF” means Fidelity National Financial, Inc., and its successors and permitted assigns.

 

Global Preferred Share” has the meaning set forth in Section 21(a).

 

GSO” means GSO Capital Partners LP, and its successors and permitted assigns.

 

GSO Group” means funds and accounts managed, advised or sub-advised by GSO and its Affiliates within the credit-focused business unit of The Blackstone Group L.P.

 

Holder” means, as to any Series B Share, the Person in whose name such share is registered in the register of members of the Company, which may be treated by the Company, Transfer Agent, Registrar, Calculation Agent, paying agent and Conversion Agent as the absolute owner of such share for the purpose of making payment and settling the related conversions and for all other purposes. References herein to “holders” of preferred shares of the Company shall mean, insofar as such shares are Series B Shares, the Holders thereof.

 

Included Series A Shares” has the meaning set forth in Section 11(h).

 

Junior Liquidation Shares” has the meaning set forth in the definition of “Junior Shares”.

 

Junior Payments” has the meaning set forth in Section 4(c)(i).

 

Junior Shares” means the Ordinary Shares and any other class or series of shares in the capital of the Company now existing or hereafter authorized over which the Series B Shares have preference or priority in the payment of dividends or in the distribution of assets following the commencement of any voluntary or involuntary liquidation of the Company. Junior Shares over which the Series B Shares have preference or priority in such distribution of assets are herein called “Junior Liquidation Shares”.

 

Liquidation Preference” has the meaning set forth in Section 5(a). References to the “liquidation preference” of any Preferred Shares of the Company in the Articles of Association shall mean the Liquidation Preference if such Preferred Shares are Series B Shares.

 

London Banking Day” means any day on which commercial banks are open in London for general business (including dealings in foreign exchange and foreign currency deposits).

 

Market Disruption Event” means, on any day when the Ordinary Shares are listed or admitted to trading or quoted on a securities exchange or quotation facility (whether U.S. national or regional or non-U.S.), any of the following events that occurs or continues to exist on such day:

 

(i)          any suspension of, or limitation imposed on, trading by the Principal Market during the one-hour period prior to the close of trading for the regular trading session (or for purposes of determining the VWAP per Ordinary Share, any period or periods aggregating one half-hour or longer during the regular trading session) on the Principal Market on such day, and whether by reason of movements in price exceeding limits permitted by the Principal Market, or otherwise, relating to the Ordinary Shares (specifically or among other shares generally) or to futures or options contracts relating to the Ordinary Shares (specifically or among other shares generally) on the Principal Market;

 

 5 

 

 

(ii)         any event that disrupts or impairs (as determined by the Company in its reasonable discretion) the ability of market participants, during the one-hour period prior to the close of trading for the regular trading session (or for purposes of determining the VWAP per Ordinary Share, any period or periods aggregating one half-hour or longer during the regular trading session) on the Principal Market on such day, to effect transactions in, or obtain market values for, the Ordinary Shares (specifically or among other shares generally) on the Principal Market on such day or to effect transactions in, or obtain market values for, futures or options contracts relating to the Ordinary Shares (specifically or among other shares generally) on the Principal Market on such day; or

 

(iii)        the principal exchange or quotation facility (whether or not the Principal Market) on which futures or options contracts relating to the Ordinary Shares are listed or admitted to trading or quoted fails to open, or closes prior to its respective scheduled closing time, for the regular trading session on such day (without regard to after hours or any other trading outside of the regular trading session hours), unless such earlier closing time is announced by such exchange or facility at least one hour prior to the earlier of (A) the actual closing time for the regular trading session on such day and (B) the submission deadline for orders to be entered into such exchange or facility for execution at the actual closing time on such day.

 

Modified Dividend Rate” means, in connection with a Remarketing, the dividend rate per annum (which may be fixed or floating, and any spread with respect to a floating dividend rate) rounded to the nearest one one-thousandth (0.001) of one percent that the Series B Shares shall bear as determined by the Board of Directors pursuant to the Remarketing Agreement and Section 11(j).

 

Modified Redemption Date” means, in connection with a Remarketing, the earliest redemption date for the Series B Shares (which shall be no earlier than the earliest redemption date prior to such Remarketing) that shall apply after such Remarketing as determined by the Company pursuant to the Remarketing Agreement.

 

Modified Remarketing Price” has the meaning set forth in Section 11(d).

 

Modified Terms” has the meaning set forth in Section 11(d).

 

NC Date” has the meaning set forth in Section 6(a); provided that if there is a Modified Redemption Date, the NC Date shall be the Modified Redemption Date.

 

Nonpayment” has the meaning set forth in Section 12(b)(i).

 

Normalized AOI” means the AOI for any period subject to the following adjustments: (i) add back any amounts for “legacy incentive compensation”, and “back project expenses”, (ii) add back (if negative) or subtract (if positive) any amounts for “single premium immediate annuities mortality & other reserve adjustments”; (iii) add back (if negative) or subtract (if positive) any amounts for “assumption review & DAC unlocking”, and (iv) “other, including bond prepayment income and tax valuation allowance adjustments”, in each case, calculated on a basis consistent with that adopted in prior years by Fidelity Life & Guaranty in its publicly filed financial statements.

 

Officer” means the Director, Chief Executive Officer, the Chief Operating Officer, the Chief Administrative Officer, the Chief Financial Officer, the Controller, the Chief Accounting Officer, the Treasurer, any Assistant Treasurer, the General Counsel and Corporate Secretary and any Assistant Secretary of the Company.

 

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Officers’ Certificate” means a certificate signed (i) by a Director, the Chief Executive Officer, the Chief Operating Officer, the Chief Administrative Officer, the Chief Financial Officer, the Controller or the Chief Accounting Officer, and (ii) by the Treasurer, any Assistant Treasurer, the General Counsel, Corporate Secretary or any Assistant Secretary of the Company, and delivered to the Conversion Agent.

 

Ordinary Shares” means the ordinary shares in the capital of the Company, par value $0.0001 per share.

 

Original Holder” means any Holder of Series B Shares that is (i) FNF, or (ii) any transferee of FNF that is an Affiliate of FNF.

 

Original Issue Date” means November 30, 2017.

 

Original Liquidation Preference” means $1,000.00 per Series B Share.

 

Original Remarketing Price” means an amount equal to the Liquidation Preference for the Series B Shares to be remarketed.

 

Original Series A Holders” means any Holder that is (i) a member of the GSO Group or (ii) any transferee of such member that is an Affiliate of GSO.

 

Parity Dividend Shares” has the meaning set forth in the definition of “Parity Shares”.

 

Parity Liquidation Shares” has the meaning set forth in the definition of “Parity Shares”.

 

Parity Shares” means any class or series of shares in the capital of the Company hereafter authorized that ranks equally with the Series B Shares in the payment of dividends or in the distribution of assets following the commencement of any voluntary or involuntary liquidation of the Company. Parity Shares so ranking equally in the payment of dividends are herein called “Parity Dividend Shares”. Parity Shares so ranking equally in such distribution of assets are herein called “Parity Liquidation Shares”. The Series A Shares shall be deemed to be Parity Shares, Parity Dividend Shares and Parity Liquidation Shares.

 

Participation Deadline” has the meaning set forth in Section 11(a).

 

Participating Holders” has the meaning set forth in Section 11(a).

 

Participating Series A Holders” has the meaning set forth in Section 11(h).

 

Permitted Holders” means:

 

(i) each of Blackstone Tactical Opportunities Fund II, L.P., GSO, FNF, Cannae Holdings, Inc., BilCar, LLC, CC Capital Management, LLC, CFS Holdings (Cayman), LP, CFS II Holdings (Cayman), LP and the Blackstone Funds;

 

(ii) any Affiliate or Related Party of any Person specified in clause (i); and

 

(iii) any Person both the Capital Stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) are owned 50% or more by Persons specified in clauses (i) and (ii) or any group in which the Persons specified in clauses (i) and (ii) own a majority of the voting power of the Voting Stock held by such group, and any Person that is a member of any such group.

 

 7 

 

 

Person” means a legal person, including any individual, company, corporation, estate, body corporate, partnership, limited liability company, trust, joint venture, association or other legal entity.

 

PIK Shares” has the meaning set forth in Section 4(a)(ii).

 

Preferred Shares” means any and all series or classes of preferred shares in the capital of the Company, having a par value of $0.0001 per share, including the Series B Shares and Series A Shares.

 

Preferred Share Director” has the meaning specified in Section 12(b)(i).

 

Principal Market” means, with respect to any day on which the Ordinary Shares are listed or admitted to trading or quoted on any securities exchange or quotation facility (whether U.S. national or regional or non-U.S.), the principal such exchange or facility on which the Ordinary Shares are so listed or admitted or so quoted.

 

Purchased Shares” has the meaning set forth in Section 9(a)(iv).

 

Record Date” has the meaning set forth in Section 9(d).

 

Redemption Price” has the meaning set forth in Section 6(a).

 

Registrar” means the Transfer Agent acting in its capacity as registrar for the Series B Shares, and its successors and assigns.

 

Regulatory Entities” means all governmental or self-regulatory authorities in the United States or elsewhere having jurisdiction over the Company or any of its Subsidiaries.

 

Reimbursed Holders” has the meaning set forth in Section 11(g).

 

Related Party” means:

 

(i)          any controlling stockholder, majority owned Subsidiary, or immediate family member (in the case of an individual) of any Permitted Holder; or

 

(ii)         any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding a majority (and controlling) interest of which consist of one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (i).

 

Remarketing” has the meaning set forth in Section 11(a).

 

Remarketing Agent” means any Remarketing Agent(s) appointed by the Company pursuant to Section 11.

 

Remarketing Agreement” means a Remarketing Agreement to be entered into between the Company and one or more Remarketing Agents setting forth the terms of a Remarketing.

 

Remarketing Date” means the date the Series B Shares offered in the Remarketing Period are priced by the Company and the Remarketing Agent(s).

 

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Remarketing Fee” means, in the event of a Successful Remarketing, a remarketing fee, if any, paid to the Remarketing Agent(s) to be agreed upon in writing by the Company and the Remarketing Agent(s) prior to any Remarketing pursuant to the Remarketing Agreement.

 

Remarketing Interest Amount” means interest on the Remarketing Loss Share Amount at a rate of 7.5% per annum accrued daily during the Remarketing Loss Share Pricing Period.

 

Remarketing Loss” has the meaning set forth in Section 11(g).

 

Remarketing Loss Share Amount” has the meaning set forth in Section 11(g).

 

Remarketing Loss Share Pricing Period” has the meaning set forth in Section 11(g).

 

Remarketing Notice” has the meaning set forth in Section 11(a).

 

Remarketing Period” has the meaning set forth in Section 11(c).

 

Remarketing Price” means, as applicable, the Original Remarketing Price or the Modified Remarketing Price.

 

Remarketing Process” means the Remarketing process specified in Section 11, commencing with the delivery of a Remarketing Notice.

 

Remarketing Reimbursement” has the meaning set forth in Section 11(g).

 

Remarketing Settlement Date” means the third Business Day immediately following the Remarketing Date for a Successful Remarketing, or such other date as the Company and the Remarketing Agent may mutually agree.

 

Remarketing Window” means the period from (i) the fifth Business Day following the earlier of (A) the Engagement Deadline, and (B) the date on which the Remarketing Agent(s) are engaged by the Company pursuant to Section 11 (the “Engagement Date”), through (ii) the 20th Business Day following the Engagement Deadline or Engagement Date, as applicable, provided that such period may be extended (and the Remarketing delayed) to no later than 180 days after the Engagement Deadline or Engagement Date, as applicable, if (i) the Remarketing Agent determines that the Remarketing is impractical due to then-prevailing market conditions, or (ii) if the Board of Directors determines in good faith (x) that such delay would enable the Company to avoid disclosure of material information, the disclosure of which at that time would not be in the Company’s best interests, or (y) that the Remarketing to be delayed would, if not delayed, materially adversely affect the Company and its Subsidiaries taken as a whole or materially interfere with, or jeopardize the success of, any pending or proposed material transaction, including any debt or equity financing, any acquisition or disposition, any recapitalization or reorganization or any other material transaction, whether due to commercial reasons, a desire to avoid premature disclosure of information or any other reason.

 

Reorganization Event” has the meaning set forth in Section 10(a).

 

Reuters Screen LIBOR01” means the display on the Reuters Eikon (or any successor service) on the “LIBOR01” page (or any other page as may replace such page on such service for the purpose of displaying the London interbank rates of major banks for U.S. dollar deposits).

 

Securities Act” means the United States Securities Act of 1933, as amended from time to time.

 

 9 

 

 

Series B Shares” has the meaning set forth in Section 1.

 

Series A Certificate of Designations” means the Certificate of Designations for the Series A Shares.

 

Series A Participation Notice” has the meaning set forth in Section 11(h).

 

Series A Remarketing Notice” has the meaning set forth in Section 11(h).

 

Series A Shares” means the Series A Cumulative Convertible Preferred Shares of Company.

 

Shareholder Approval” has the meaning set forth in Section 8(e).

 

Subsidiary” means, with respect to any Person, any entity of which (i) such Person or any other Subsidiary of such Person is a general partner (in the case of a partnership) or managing member (in the case of a limited liability company), (ii) voting power to elect or appoint a majority of the board of directors, board of managers or others performing similar functions with respect to such organization is held by such Person or by any one or more of such Person’s Subsidiaries, (iii) at least fifty percent (50%) of any class of shares or Capital Stock or of the outstanding equity interests are beneficially owned by such Person or (iv) any Person that would otherwise be deemed a “subsidiary” under Rule 12b-2 under the Exchange Act.

 

Successful Remarketing” has the meaning set forth in Section 11(e).

 

Three-month LIBOR” means, with respect to any Floating Rate Period, the offered rate expressed as a percentage per annum for deposits in U.S. dollars for a three-month period commencing on the first day of such Floating Rate Period, as that rate appears on Reuters Screen LIBOR01 as of 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such Floating Rate Period.

 

If Three-month LIBOR does not appear on Reuters Screen LIBOR01, Three-month LIBOR shall be determined on the basis of the rates at which deposits in U.S. dollars for a three-month period, commencing on the first day of such Floating Rate Period, and in a principal amount of not less than $1,000,000, are offered to prime banks in the London interbank market by four major banks in that market selected by the Company and identified to the Calculation Agent at approximately 11:00 A.M., London time, on the second London Banking Day immediately preceding the first day of such Floating Rate Period. The Calculation Agent shall request the principal London office of each of these banks to provide a quotation of its rate. If at least two such quotations are provided, Three-month LIBOR for such Floating Rate Period shall be the arithmetic mean of such quotations (rounded upward if necessary to the nearest 0.00001%).

 

If fewer than two such quotations are provided as described in the preceding paragraph, Three-month LIBOR with respect to such Floating Rate Period shall be the arithmetic mean (rounded upward if necessary to the nearest 0.00001%) of the rates quoted by three major banks in New York City selected by the Company and identified to the Calculation Agent at approximately 11:00 A.M., New York City time, on the first day of such Floating Rate Period for loans in U.S. dollars to leading European banks for a three-month period, commencing on the first day of such Floating Rate Period, and in a principal amount of not less than $1,000,000.

 

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If fewer than three banks selected by the Company and identified to the Calculation Agent to provide quotations are quoting as described in the preceding paragraph the Calculation Agent shall: (i) determine the base rate that is most comparable to the Three-month LIBOR that was last displayed on Reuters Screen LIBOR01; and (ii) apply such changes to that rate such that it is as similar as practicable, in the opinion of the Calculation Agent, to the rate that would have prevailed under the Three-month LIBOR that was last displayed on Reuters Screen LIBOR01, provided, that if the Calculation Agent determines there is an industry accepted successor base rate to the Three-month LIBOR that was last displayed on Reuters Screen LIBOR01, such successor base rate will be the rate applied under (i).

 

If Three-month LIBOR calculated in accordance with the foregoing paragraphs for any Floating Rate Period is less than zero, then Three-month LIBOR shall be deemed to be zero for such Floating Rate Period.

 

Trading Day” means, for purposes of determining a VWAP or Closing Price per share of Ordinary Shares, a day on which the Principal Market is open for the transaction of business and on which a Market Disruption Event does not occur or exist, or if the shares of Ordinary Shares are not listed or admitted to trading and are not quoted on any securities exchange or quotation facility, a Business Day.

 

Transfer Agent” means Continental Stock Transfer & Trust Company acting as Transfer Agent, Registrar, Calculation Agent, paying agent and Conversion Agent for the Series B Shares, and its successors and assigns.

 

Trust” has the meaning set forth in Section 6(e).

 

Unsuccessful Remarketing” has the meaning set forth in Section 11(f).

 

Voting Holders” has the meaning set forth in Section 12(b)(i).

 

Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable, of such Person.

 

VWAP” per Ordinary Share on any Trading Day means the per share volume-weighted average sale price per share of Ordinary Shares on the Principal Market as displayed under the heading Bloomberg VWAP on Bloomberg page “CF Equity VWAP” (or any appropriate successor page) in respect of the period from the open of trading until the close of trading on the Principal Market on such Trading Day (or if such volume-weighted average price is unavailable or not provided for any reason, or there is no Principal Market for the Ordinary Shares, the market price of one Ordinary Share on such Trading Day determined, using a volume-weighted average method, by a nationally recognized investment banking firm retained for this purpose by the Company). When used with respect to any other securities, “VWAP” shall have the meaning set forth above with references to the price per Ordinary Share meaning the price per unit of such other securities, with references to Bloomberg page “CF Equity VWAP” meaning the applicable Bloomberg page displaying the volume-weighted average sale price per unit of such securities and references to the Principal Market meaning the principal exchange or other market in which such securities are then listed, quoted or traded. The VWAP during any period shall be appropriately adjusted to take into account the occurrence during such period of any event described in Section 9.

 

In addition to the above definitions, unless the context requires otherwise:

 

(i)          any reference to any statute, regulation, rule or form as of any time shall mean such statute, regulation, rule or form as amended or modified and shall also include any successor statute, regulation, rule or form from time to time (and in the case of statutes, include any rules and regulations promulgated under the statute);

 

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(i)          references to “$” or “dollars” means the lawful coin or currency of the United States of America; and

 

(ii)         references to “Section” are references to Sections of this Certificate of Designations.

 

Section 4.          Dividends.

 

(a)           Quarterly Dividends.

 

(i)          Subject to applicable law, the Holders of the Series B Shares shall be entitled to receive, when, as and if declared by the Board of Directors (or a duly authorized committee of the Board of Directors), out of assets lawfully available for that purpose, cumulative cash dividends on the Original Liquidation Preference of $1,000.00 at a rate per annum equal to the then-applicable Dividend Rate. Subject to applicable law, dividends shall be payable quarterly in arrears on the first days of January, April, July and October, respectively, in each year, commencing on January 1, 2018; provided, however, that (x) if any such day during the Fixed Rate Period is not a Business Day, then such day shall nevertheless be a Dividend Payment Date but dividends on the Series B Shares, when, as and if declared, shall be paid on the next succeeding Business Day (without adjustment in the amount of the dividend per Series B Share), and (y) if any such day during the Floating Rate Period is not a Business Day, then the next succeeding Business Day shall be the applicable Dividend Payment Date and dividends, when, as and if declared, shall be paid on such next succeeding Business Day (each such day on which dividends are payable, after giving effect to this proviso if applicable, a “Dividend Payment Date”). Dividends on the Series B Shares shall begin to accumulate on the Original Issue Date (or, with respect to any Series B Shares issued in kind pursuant to this Section 4, the date on which such Series B Shares are issued) and shall be deemed to accumulate from day to day whether or not earned or declared until paid. Dividends payable on the Series B Shares in respect of each Fixed Rate Period shall be computed by the Calculation Agent on the basis of a 360-day year consisting of twelve 30-day months, and dividends payable on the Series B Shares in respect of each Floating Rate Period shall be computed by the Calculation Agent by multiplying the per annum dividend rate in effect for that Floating Rate Period by a fraction, the numerator of which will be the actual number of days in that Floating Rate Period and the denominator of which will be 360, and multiplying the rate obtained by $1,000 to determine the dividend per Series B Share. The Calculation Agent’s determination of any Dividend Rate, and its calculation of the amount of dividends for any Dividend Period, will be maintained on file at the Company’s principal offices and will be available to any Holder upon request and will be final and binding in the absence of manifest error. The Company may terminate the appointment of the Calculation Agent and may appoint a successor agent at any time and from time to time, provided that the Company shall use its best efforts to ensure that there is, at all relevant times when the Series B Shares are issued and outstanding, a person or entity appointed and serving as such agent.

 

(ii)         Dividends payable on Series B Shares on any Dividend Payment Date shall be paid in cash or, at the option of the Company, in lieu of paying such cash dividends, the Company may instead effect a share capitalization by issuing new duly authorized and fully paid and nonassessable Series B Shares (any such Series B Shares, “PIK Shares”) to the extent the Company chooses not to pay a cash dividend. If the Company elects to effect a share capitalization by issuing PIK Shares in accordance with the foregoing, the number of PIK Shares to be issued will be calculated by dividing the portion of such dividend not paid in cash by the Original Liquidation Preference, and such PIK Shares shall be entitled to receive cumulative dividends at the rates specified in the preceding paragraph from their date of issuance and shall otherwise be treated as Series B Shares for purposes of all other provisions hereof. The Company may not effect a share capitalization by issuing PIK Shares to the extent (A) there are not sufficient authorized but unissued Series B Shares to permit such share capitalization, (B) a Remarketing Process has commenced pursuant to Section 11 and not concluded or terminated, or (C) from and after May 31, 2018, if the aggregate issuance of Ordinary Shares upon conversion of Series B Shares and Series A Shares following such issuance of PIK Shares would be greater than 19.99% of the Ordinary Shares issued and outstanding as of the date hereof (calculated using the methodology applied under Section 312.03 of the NYSE Listed Company Manual and assuming that such Series B Shares were convertible pursuant to Section 7 at the time of the applicable Dividend Payment Date at a Conversion Price equal to the value of clause (iii) of the definition of Floor Price), until such time as the Company obtains the Shareholder Approval.

 

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(iii)        Dividends that are payable on the Series B Shares or any share capitalization effected on any Dividend Payment Date shall be payable, and any PIK Shares shall be issuable, to Holders of record of the Series B Shares as they appear on the register of members of the Company on the applicable record date, which shall be the 15th calendar day of the month immediately preceding such Dividend Payment Date or such other record date fixed by the Board of Directors (or a duly authorized committee of the Board of Directors) that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

 

(iv)        In connection with a Successful Remarketing of the Series B Shares, the Dividend Rate may be increased to an Modified Dividend Rate in accordance with Section 11 below. If the Dividend Rate on the Series B Shares is increased in accordance with Section 11 below, dividends shall accumulate at the Modified Dividend Rate pursuant to the terms of this Section 4 from (and including) the Remarketing Settlement Date. Any reference herein to accumulated and unpaid dividends shall include any such dividends at the Modified Dividend Rate, if applicable.

 

(b)           Cumulative Dividends. Dividends on the Series B Shares shall be cumulative, and from and after any Dividend Payment Date or other date on which any dividend or any payment upon redemption, or any Conversion Date on which any payment upon conversion, in each case has accumulated or been deemed to have accumulated through such date has not been paid in full (the “Arrearage”), additional dividends shall accumulate in respect of the Arrearage at the then-applicable Dividend Rate. Such additional dividends in respect of any Arrearage shall be deemed to accumulate daily from such Dividend Payment Date, or other date on which any dividend or any payment upon redemption or Conversion Date, whether or not earned or declared, until the Arrearage is paid and shall constitute additional Arrearage from and after the immediately following Dividend Payment Date to the extent not paid on such Dividend Payment Date. References in any Article herein to dividends that have “accumulated” or that have been deemed to have accumulated with respect to the Series B Shares shall include the amount, if any, of any Arrearage together with any dividends accumulated or deemed to have accumulated on such Arrearage pursuant to the immediately preceding two sentences.

 

(c)           Priority of Dividends.

 

(i)          For so long as any Series B Shares remain issued and outstanding, the Company will not, and will cause its Subsidiaries not to, declare, pay or set apart funds for any dividends or other distributions with respect to any Junior Shares or redeem, repurchase or otherwise acquire, or make a liquidation payment relating to, any Junior Shares, or make any guarantee payment with respect thereto, in any case during or in respect of any Dividend Period (collectively, “Junior Payments”), unless: (1)(A) full dividends (including any Arrearage and dividends accumulated in respect thereof) have been or contemporaneously are declared and paid in cash or in kind on the Series B Shares for all Dividend Periods prior to the date of such Junior Payment and the Dividend Period in which such Junior Payment falls, and (B) no PIK Shares are then issued and outstanding; (2) Fidelity & Guaranty Life Insurance Company, or any successor “primary” insurance Subsidiary of the Company, maintains an A.M. Best Company financial strength rating of A- or higher; (3) the Company is in compliance with the covenants set forth in Section 12(c); (4) any such Junior Payments, when aggregated with all other Junior Payments, other than on the Series B Shares and the Series A Shares, in any given fiscal year of the Company, does not represent an amount greater than 20% of the Normalized AOI of the Company for the preceding fiscal year; and (5) if any Change of Control has occurred, the requirements of Section 12(c)(iv) were satisfied with respect to such Change of Control; provided, however, that the foregoing restriction will not apply to:

 

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A.           purchases, redemptions or other acquisitions of Junior Shares (and the payment of cash in lieu of fractional shares in connection therewith) required by any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors of the Company or any Subsidiary;

 

B.           the purchase of fractional interests in Junior Shares pursuant to the conversion or exchange provisions of such Junior Shares;

 

C.           declaration of a non-cash dividend on the Capital Stock of the Company in connection with the implementation of a shareholders rights plan on customary terms designed to protect the Company against unsolicited offers to acquire its Capital Stock, or the issuance of Capital Stock of the Company under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto;

 

D.           dividends or distributions payable solely in Junior Shares, or warrants, options or rights to acquire Junior Shares; or

 

E.           conversions of any Junior Shares into, or exchanges of any Junior Shares for, a class or series of other Junior Shares.

 

Notwithstanding anything contained herein to the contrary, if any Junior Payment was permitted under this Section 4(c)(i) at the time it was declared or when it first became a contractual obligation, it shall be deemed permitted hereunder at the time it is actually paid; provided that such Junior Payment occurs within 60 days of such declaration or entry into such contractual obligation.

 

(ii)         For so long as any Series B Shares remain issued and outstanding, if full dividends (including any Arrearage and dividends accumulated in respect thereof) are not paid in full for any Dividend Period on the Series B Shares and any Parity Dividend Shares, all dividends paid or declared for payment on a dividend payment date with respect to the Series B Shares and the Parity Dividend Shares shall be shared (A) first ratably by the holders of any Parity Dividend Shares who have the right to receive dividends with respect to past dividend periods for which such dividends were not declared and paid, in proportion to the respective amounts of the undeclared and unpaid dividends relating to past dividend periods, and thereafter (B) ratably by the holders of Series B Shares and any Parity Dividend Shares, in proportion to the respective amounts of the undeclared and unpaid dividends relating to the current dividend period. Any proportional dividend on Parity Dividend Shares that have cumulative dividend rights will take into account the amount of any accumulated but unpaid dividends and arrearage with respect to such shares. To the extent a dividend period with respect to any Parity Dividend Shares coincides with more than one Dividend Period with respect to the Series B Shares, for purposes of the immediately preceding sentence the Board of Directors shall treat such dividend period as two or more consecutive dividend periods, none of which coincides with more than one Dividend Period with respect to the Series B Shares, or shall treat such dividend period(s) with respect to any Parity Dividend Shares and Dividend Period(s) with respect to the Series B Shares for purposes of the immediately preceding sentence in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on such Parity Dividend Shares and the Series B Shares. To the extent a Dividend Period with respect to the Series B Shares coincides with more than one dividend period with respect to any Parity Dividend Shares, for purposes of the first sentence of this paragraph the Board of Directors shall treat such Dividend Period as two or more consecutive Dividend Periods, none of which coincides with more than one dividend period with respect to such Parity Dividend Shares, or shall treat such Dividend Period(s) with respect to the Series B Shares and dividend period(s) with respect to any Parity Dividend Shares for purposes of the first sentence of this paragraph in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on the Series B Shares and such Parity Dividend Shares. The term “dividend period” as used in this paragraph means such dividend periods as are provided for in the terms of any Parity Dividend Shares and, in the case of Series B Shares, Dividend Periods applicable to shares of Series B Shares; and the term “dividend payment dates” as used in this paragraph means such dividend payment dates as are provided for in the terms of any Parity Dividend Shares and, in the case of Series B Shares, Dividend Payment Dates applicable to Series B Shares.

 

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(iii)        Subject to this Section 4, such dividends (payable in cash, in kind, securities or other property) as may be determined by the Board of Directors (or a duly authorized committee of the Board of Directors) may be declared and paid on any securities, including Junior Shares and any Parity Dividend Shares, from time to time out of any funds legally available for such payment, and the Holders of Series B Shares shall not be entitled to participate in any such dividends.

 

(iv)        Notwithstanding any other section of this Section 4, the Company will not, and will cause its Subsidiaries not to, make any Junior Payment if such payment would cause the aggregate issuance of Ordinary Shares upon conversion of Series B Shares and Series A Shares to be greater than 19.99% of the Ordinary Shares issued and outstanding as of the date hereof (calculated using the methodology applied under Section 312.03 of the NYSE Listed Company Manual and assuming that such Series B Shares were convertible pursuant to Section 7 at the time of the applicable Dividend Payment Date at a Conversion Price equal to the value of clause (iii) of the definition of Floor Price), until such time as the Company obtains the Shareholder Approval.

 

Section 5.             Liquidation Rights.

 

(a)          Liquidation. Subject to applicable law, in the event of any voluntary or involuntary liquidation of the Company, Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Junior Liquidation Shares and subject to the rights of the holders of any Parity Liquidation Shares and the rights of the Company’s creditors, to receive in full in respect of each Series B Share a liquidating distribution in the amount of the Original Liquidation Preference plus all accumulated and unpaid dividends in respect of such share, whether or not declared (including Arrearage and dividends accumulated in respect thereof) to, but excluding, the date fixed for liquidation or, if applicable, the date of a Remarketing or repurchase pursuant to Section 11 or redemption pursuant to Section 6 (the “Liquidation Preference”). Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary winding up of the affairs, liquidation or dissolution of the Company other than what is expressly provided for in this Section 5.

 

(b)          Partial Payment. If, following the commencement of any voluntary or involuntary liquidation of the Company, the assets of the Company are not sufficient to pay the liquidating distributions payable with respect to the Series B Shares and the Parity Liquidation Shares, the amounts paid to the Holders and to the holders of all Parity Liquidity Shares shall be paid pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled.

 

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(c)          Residual Distributions. If the respective aggregate liquidating distributions to which all Holders and all holders of any Parity Liquidation Shares are entitled have been paid, the holders of Junior Liquidation Shares shall be entitled to receive all remaining assets of the Company according to their respective rights and preferences.

 

(d)          Merger, Amalgamation, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5, the sale, lease or other disposition (for cash, shares, securities or other consideration) of all or substantially all of the assets of the Company shall not be deemed to be a voluntary or involuntary liquidation of the Company, nor shall the consolidation, merger, amalgamation, binding share exchange or reclassification or any similar transaction involving the Company (whether or not the Company is the surviving or resulting entity) be deemed to be a voluntary or involuntary liquidation of the Company.

 

Section 6.             Redemption.

 

(a)          Optional Redemption. The Series B Shares are perpetual and have no maturity date. The Series B Shares may not be redeemed prior to the first Dividend Payment Date falling on or after November 30, 2022 (the “NC Date”); provided that nothing herein shall be construed to limit the repurchase or acquisition by the Company or any Affiliate of the Company of Series B Shares through privately negotiated transactions, tender offers or otherwise (including redemption under Section 6(b)). The Company, at the option of its Board of Directors or any duly authorized committee thereof, may redeem out of funds lawfully available therefor, in whole or in part, the Series B Shares at the time issued and outstanding, at any time on or after the NC Date, upon notice given as provided in Section 6(d) below, and at a redemption price in cash equal to the Liquidation Preference (calculated as if the date of redemption was the date fixed for winding up) on the Series B Shares being redeemed (the “Redemption Price”). In connection with a Successful Remarketing of the Series B Shares, the NC Date may be changed by the Board of Directors to a later date as set forth in Section 11.

 

(b)          Redemption of PIK Shares. The Company, at the option of its Board of Directors or any duly authorized committee thereof, may redeem out of funds lawfully available therefor, in whole or in part, the PIK Shares at the time issued and outstanding, at any time, upon notice given as provided in Section 6(d) below, for cash at the Redemption Price.

 

(c)          Notice of Company Redemption. Notice of every redemption of Series B Shares (including any PIK Shares) pursuant to Section 6(a)or Section 6(b) shall be mailed by first class mail, postage prepaid, addressed to the Holders of such shares to be redeemed at their respective last addresses appearing on the register of members of the Company. In respect of any mailing pursuant to Section 6(a) or Section 6(b), such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Section 6(c) shall be conclusively presumed to have been duly given, whether or not any Holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any Holder of the Series B Shares designated for redemption shall not affect the validity of the proceedings for the redemption of any other Series B Shares. Each notice shall state:

 

(i)          the expected redemption date;

 

(ii)         the number of Series B Shares to be redeemed and, if fewer than all the shares of a Holder are to be redeemed, the number of such shares to be redeemed;

 

(iii)        the applicable Redemption Price;

 

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(iv)        the place or places where the certificates for such shares are to be surrendered for payment of the Redemption Price; and

 

(v)         that dividends on the shares to be redeemed will cease to accumulate on the redemption date.

 

Notwithstanding the foregoing, if the Series B Shares are held by a Depositary, the Company may give such notice in any manner permitted by the Depositary.

 

(d)          Partial Redemption. In case of any redemption of only part of the Series B Shares at the time issued and outstanding, the number of Series B Shares to be redeemed from each Holder shall be pro rata in proportion to the number of issued and outstanding Series B Shares held by such Holders. Subject to the provisions of this Section 6 and the Articles of Association, the Board of Directors or any duly authorized committee thereof shall have full power and authority to prescribe the terms and conditions upon which the Series B Shares shall be redeemed from time to time.

 

(e)          Effectiveness of Redemption. If notice of redemption has been duly given pursuant to Section 6(c) and if on or before the redemption date specified in the notice all funds necessary for payment of the applicable Redemption Price have been set aside by the Company, separate and apart from its other assets, for the benefit of the Holders of the shares called for redemption, so as to be and continue to be available therefor, or deposited by the Company with a bank or trust company selected by the Board of Directors or any duly authorized committee thereof in trust for the pro rata benefit of the Holders of the shares called for redemption (the “Trust”), then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the date of such deposit the voting rights and covenants set forth in Section 12 shall cease to be of further effect and any PIK Shares in respect of which such deposit has been made shall be deemed to be not outstanding for purposes of Section 4(c)(i)(1)(B). On and after the redemption date all shares so called for redemption shall cease to be issued and outstanding, all dividends with respect to such shares shall cease to accumulate on such redemption date and all other rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the Holders thereof to receive the amount payable on such redemption from the Trust at any time after the redemption date from the funds so deposited, without interest. The Company shall be entitled to receive, from time to time, from the Trust any interest accrued on such funds, and the Holders of any shares called for redemption shall have no claim to any such interest. Any funds so deposited and unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released or repaid to the Company, and in the event of such repayment to the Company, the Holders of the shares so called for redemption shall be deemed to be unsecured creditors of the Company for an amount equivalent to the amount deposited as stated above for the redemption of such shares and so repaid to the Company, but shall in no event be entitled to any interest.

 

Section 7.             Right of the Original Holders to Convert.

 

From and after November 30, 2027, but subject to the last sentence of this Section 7, each Original Holder shall have the right, at such Original Holder’s option (including after a notice of redemption has been given pursuant to Section 6(a) or Section 6(b) but prior to the date of actual redemption), to convert all or any portion of such Original Holder’s Series B Shares at any time into a number of Ordinary Shares equal to the then-applicable Conversion Rate multiplied by the number of Series B Shares to be converted (subject to the conversion procedures of Section 8), plus cash in lieu of fractional shares. Notwithstanding the foregoing, an Original Holder shall not be permitted to exercise its right of conversion with respect to any Series B Shares unless it has first sought the Remarketing of such Series B Shares pursuant to Section 11, and such Series B Shares are not disposed of in accordance with the terms thereof (including as a result of an Unsuccessful Remarketing). The right of conversion set forth in this Section 7 shall only be exercisable by the Original Holders, and no subsequent Holders shall be entitled thereto.

 

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Section 8.             Conversion Procedures.

 

(a)          Conversion Date. Effective immediately prior to the close of business on any applicable Conversion Date, dividends shall no longer be declared or payable on any such converted Series B Shares and such Series B Shares shall cease to be issued and outstanding, in each case, subject to the right of the Original Holders to receive any payments to which they are entitled to as of such time pursuant to the terms hereof.

 

(b)          Rights Prior to Conversion. No allowance or adjustment, except pursuant to Section 9, shall be made in respect of dividends payable to holders of the Ordinary Shares of record as of any date prior to the close of business on any applicable Conversion Date. Prior to the close of business on any applicable Conversion Date, Ordinary Shares issuable upon conversion of, or other securities issuable upon conversion of, any Series B Shares shall not be deemed issued and outstanding for any purpose, and Holders shall have no rights with respect to the Ordinary Shares or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Ordinary Shares or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Ordinary Shares or other securities issuable upon conversion) by virtue of holding Series B Shares; provided that nothing in this Section 8(b) shall be deemed to restrict or limit the rights of Holders under the terms of the Series B Shares themselves, including the voting rights set forth in Section 12 and the rights to dividends and liquidating distributions set forth in Section 4 and Section 5, respectively.

 

(c)          Record Holder of the Ordinary Shares. Each conversion will be deemed to have been effective as to any Series B Shares surrendered for conversion on the Conversion Date; provided, however, that the Person or Persons entitled to receive the Ordinary Shares and/or cash, securities or other property issuable upon conversion of the Series B Shares shall be treated for all purposes as the record holder(s) of such Ordinary Shares and/or securities as of the close of business on the last Trading Day of the period used to determine the relevant Conversion Price for such conversion. In the event that an Original Holder shall not by written notice designate the name in which Ordinary Shares and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of Series B Shares should be registered or paid or the manner in which such shares should be delivered, the Company shall be entitled to register and deliver such shares, and make such payment, in the name of the Original Holder and in the manner shown on the records of the Company or, in the case of Global Preferred Shares, through the facilities of the Depositary. The Ordinary Shares and/or cash, securities or other property issuable upon conversion of the Series B Shares shall be delivered by the Company no later than the third Business Day following the last Trading Day of the period used to determine the relevant Conversion Price for such conversion.

 

(d)          Conversion Procedure. An Original Holder may commence a conversion pursuant to this Section 8 by delivering a complete and manually signed conversion notice, in the form provided by the Conversion Agent, or a facsimile of the conversion notice, to the Conversion Agent, provided that such notice may, pursuant to a written notice thereunder be made contingent upon (but only upon) the successful completion of any registered public offering of the Ordinary Shares to be issued on such conversion that is being conducted pursuant to the registration rights attaching to such Ordinary Shares at such time and such notice shall in all other respects be irrevocable (the date on which such notice is received, the “Conversion Notice Date”; provided that, if such date is not a Business Day or such compliance does not occur prior to the close of business on such date, the Conversion Notice Date shall be the next Business Day).

 

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On or before the 31st Trading Day following the Conversion Notice Date (the “Conversion Date”), the Original Holder must:

 

(i)          surrender the Series B Shares to the Conversion Agent (if the Series B Shares are certificated);

 

(ii)         pay any funds equal to the dividends payable on the next Dividend Payment Date that such Holder is required to pay under this Section 8(d);

 

(iii)        if required, furnish customary endorsements and transfer documents; and

 

(iv)        if required, pay any share transfer, documentary, stamp or similar taxes not payable by the Company pursuant to Section 22.

 

If an Original Holder’s interest is a beneficial interest in a global certificate representing Series B Shares, in order to convert an Original Holder must comply with clauses (ii), (iii) and (iv) listed above and comply with the Depositary’s procedures for converting a beneficial interest in a global security.

 

Provided that the Original Holder has complied with the foregoing, on the Conversion Date, the Conversion Agent shall, on such Original Holder’s behalf, convert the Series B Shares into Ordinary Shares, (x) in accordance with the terms of the notice delivered by such Original Holder to the Conversion Agent or (y) otherwise pursuant to any applicable Depositary procedures, if applicable.

 

If an Original Holder converts its Series B Shares after the close of business on a Dividend Record Date, but prior to the open of business on the Dividend Payment Date corresponding to such Dividend Record Date, then (x) the Original Holder of such Series B Shares at the close of business on such Dividend Record Date shall be entitled, notwithstanding such conversion, to receive, on such Dividend Payment Date, the unpaid dividends that have accrued on such Series B Shares to, but excluding, such Dividend Payment Date; and (y) the Original Holder of such Series B Shares must, upon surrender of such Series B Shares for conversion, accompany such Series B Shares with an amount of cash equal to the dividends that will be payable on such Series B Shares on such Dividend Payment Date.

 

(e)          Conversion Effect. The conversion may be effected in any manner permitted by applicable law and the Articles of Association, including redeeming or repurchasing the relevant Series B Shares and applying the proceeds thereof towards payment for the new Ordinary Shares. For purposes of the repurchase or redemption, the Board of Directors may, subject to the Company being able to pay its debts in the ordinary course of business, make payments out of amounts standing to the credit of the Company’s share premium account or out of its capital. Until such time as the Company obtains the approval of its shareholders of the conversion of the Series B Shares into Ordinary Shares for purposes of Section 312.03 of the NYSE Listed Company Manual (the “Shareholder Approval”), notwithstanding anything to the contrary in this Section 8, the aggregate issuance of Ordinary Shares upon conversion of Series B Shares and Series A Shares shall be capped at 19.99% of the Ordinary Shares issued and outstanding as of the date hereof and the Original Holder shall not be entitled to any cash or other consideration for Ordinary Shares not received due to this limitation.

 

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Section 9.            Anti-Dilution Adjustments.

 

(a)          Adjustments. The Floor Price will be subject to adjustment, without duplication, under the following circumstances:

 

(i)          the issuance to all holders of Ordinary Shares of Ordinary Shares as a dividend, bonus shares or distribution to all holders of Ordinary Shares, or a subdivision or combination of Ordinary Shares, in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / (OS1 / OS0)

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  OS0   =    the number of Ordinary Shares issued and outstanding at the close of business on the Record Date prior to giving effect to such event
     
  OS1   =    the number of Ordinary Shares that would be issued and outstanding immediately after, and solely as a result of, such event

 

(ii)         the issuance to all holders of Ordinary Shares of rights or warrants (including convertible securities) entitling them for a period expiring 60 days or less from the date of issuance of such rights or warrants to purchase Ordinary Shares at an exercise price per share less than (or having a conversion price per share less than) the Current Market Price as of the date such issuance is publicly announced, in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / [(OS0 + X) / (OS0 + Y)]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  OS0   =    the number of Ordinary Shares issued and outstanding at the close of business on the Record Date prior to giving effect to such event
     
  X   =    the total number of shares of Ordinary Shares issuable pursuant to such rights (or upon conversion of such securities)
     
  Y   =    the aggregate price payable to exercise such rights (or the aggregate conversion price for such securities paid upon conversion) divided by the average of the VWAP of the Ordinary Shares over each of the 10 consecutive Trading Days prior to the Business Day immediately preceding the announcement of the issuance of such rights

 

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However, the Floor Price will be readjusted to the extent that any such rights or warrants are not exercised prior to their expiration; provided that such readjustment shall not have any effect on Series B Shares that had been converted prior to such readjustment or on the Ordinary Shares issued pursuant thereto, and such readjustment shall apply only to such Series B Shares that remain issued and outstanding at the time of such readjustment.

 

(iii)        the dividend or other distribution to all holders of Ordinary Shares of shares in the capital of the Company (other than Preferred Shares), rights or warrants (including convertible securities) to acquire shares of the Company or evidences of its indebtedness or its assets (excluding any dividend, distribution or issuance covered by clause (i) or (ii) above or (iv) below), in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / [SP0 / (SP0 – FMV)]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  SP0   =    the Current Market Price as of the Record Date
     
  FMV   =    the fair market value (as reasonably determined by the Board of Directors) on the Record Date of the shares of the Company, rights or warrants, or evidences of indebtedness or assets so distributed, expressed as an amount per Ordinary Share

 

However, if the transaction that gives rise to an adjustment pursuant to this clause (iii) is one pursuant to which the payment of a dividend, bonus shares or other distribution on shares in the capital of the Company (other than Preferred Shares) consists of shares of, or similar equity interests in, a Subsidiary or other business unit of the Company (e.g., a spin-off), that are, or, when issued, will be, traded on a securities exchange or quoted on a quotations facility in the U.S. or elsewhere, then the Floor Price will instead be adjusted based on the following formula:

 

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FP1 = FP0 / [(FMV0 + MP0 ) / MP0]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Record Date
     
  FP1   =    the Floor Price in effect immediately after the Record Date
     
  FMV0   =    the average of the VWAP of the shares, similar equity interests or other securities distributed to holders of Ordinary Shares applicable to one Ordinary Share over each of the 10 consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such shares, similar equity interests or other securities on the principal exchange or other market on which they are then listed, quoted or traded
     
  MP0   =    the average of the VWAP of the Ordinary Shares over each of the 10 consecutive Trading Days commencing on and including the third Trading Day after the date on which “ex-distribution trading” commences for such dividend or distribution on the principal exchange or other market on which Ordinary Shares is then listed or quoted; and

 

(iv)        the Company or one or more of its Subsidiaries make purchases of Ordinary Shares pursuant to a tender or exchange offer by the Company or a Subsidiary of the Company for Ordinary Shares to the extent (as reasonably determined by the Board of Directors) that the cash and value of any other consideration included in the payment per Ordinary Share validly tendered or exchanged exceeds the VWAP per Ordinary Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), in which event the Floor Price will be adjusted based on the following formula:

 

FP1 = FP0 / [[FMV + (SP1 x OS1 )] / (SP1 x OS0 )]

 

where,

 

  FP0   =    the Floor Price in effect at the close of business on the Expiration Date
     
  FP1   =    the Floor Price in effect immediately after the Expiration Date
     
  FMV   =    the fair market value (as reasonably determined by the Board of Directors), on the Expiration Date, of the aggregate value of all cash and any other consideration paid or payable for Ordinary Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “Purchased Shares”)

 

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  OS1   =    the number of Ordinary Shares issued and outstanding as of the last time tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Time”) (treating all Purchased Shares as issued and outstanding at the Expiration Time), less any Purchased Shares
     
  OS0   =    the number of shares of Ordinary Shares issued and outstanding at the Expiration Time, including any Purchased Shares
     
  SP1   =    the average of the VWAP of the Ordinary Shares over each of the 10 consecutive Trading Days commencing on the Trading Day immediately after the Expiration Date.

 

(b)          Calculation of Adjustments. Each adjustment to the Floor Price shall be calculated by the Company as soon as reasonably practicable after the event requiring such adjustment has been consummated (and all factors necessary to calculate such adjustment are known), in each case to the nearest 1/10,000th of one Ordinary Share (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). Notwithstanding anything herein to the contrary, except in the case of a combination or reverse stock split of Ordinary Shares pursuant to Section 9(a)(i), in no case will any adjustment be made if it would result in an increase to the then effective Floor Price. No adjustment to the Floor Price will be required unless such adjustment would require an increase or decrease of at least 1%; provided, however, that any such minor adjustments that are not required to be made, and are not made, will be carried forward and taken into account in any subsequent adjustment; and provided, further, that any such adjustment of less than one percent that has not been made will be made upon (x) the date of any notice of redemption of the Series B Shares in accordance with the provisions hereof and (y) any Conversion Date.

 

(c)          When No Adjustment Required.

 

(i)          Except as otherwise provided in this Section 9, the Floor Price will not be adjusted for the issuance of Ordinary Shares or any securities convertible into or exchangeable for Ordinary Shares or carrying the right to purchase any of the foregoing or for the repurchase of Ordinary Shares.

 

(ii)         No adjustment to the Floor Price need be made:

 

  A. upon the issuance of any Ordinary Shares pursuant to any present or future customary plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment, at market prices, of additional optional amounts in Ordinary Shares; or
     
  B. upon the issuance of any Ordinary Shares or options or rights to purchase Ordinary Shares pursuant to any present or future employee or director benefit plan or program of or assumed by the Company or any of its Subsidiaries or other Affiliates; or
     
  C. upon the issuance of any Ordinary Shares pursuant to any option, warrant, right or exercisable, exchangeable or convertible security issued and outstanding as of the date hereof; or

 

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  D. upon the repurchase of any Ordinary Shares pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the nature described under Section 9(a)(iv); or
     
  E. for accrued and unpaid interest, if any.

  

(iii)        No adjustment to the Floor Price will be made to the extent that such adjustment would result in the Conversion Price being less than the par value of the Ordinary Shares.

 

(iv)        Notwithstanding any other provision herein to the contrary, no adjustment shall be made (1) in respect of an event otherwise requiring an adjustment under this Section 10, except to the extent such event is actually consummated or (2) if the holder of the Series B Shares shall be entitled to receive the distribution described under Section 9(a)(i)-(iii) or participate in the event described in Section 9(a)(i)-(iv), whether on an as-converted basis (based on a Conversion Price equal to the higher of (A) a 5.0% discount to the VWAP per Ordinary Share on the Trading Day preceding the ex-date of such distribution and (B) the Floor Price) or due to becoming the record holder of the Ordinary Shares upon the conversion of the Series B Shares.

 

(d)          Record Date. For purposes of this Section 9, “Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Ordinary Shares have the right to receive any cash, securities or other property or in which the Ordinary Shares (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Ordinary Shares entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

 

(e)          Successive Adjustments. After an adjustment to the Floor Price under this Section 9, any subsequent event requiring an adjustment under this Section 9 shall cause an adjustment to such Floor Price as so adjusted.

 

(f)          Multiple Adjustments. For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Floor Price pursuant to this Section 9 under more than one subsection hereof, such event, to the extent taken into account in any adjustment, shall not result in any other adjustment hereunder.

 

(g)          Notice of Adjustments. Whenever a Floor Price is adjusted as provided under this Section 9, the Company shall within 10 Business Days following the occurrence of an event that requires such adjustment (or if the Company is not aware of such occurrence, within 10 Business Days after becoming so aware):

 

(i)          compute the adjusted applicable Floor Price in accordance with this Section 9 and prepare and transmit to the Conversion Agent an Officers’ Certificate setting forth such adjusted applicable Floor Price, the method of calculation thereof in reasonable detail and the facts requiring such adjustment and upon which such adjustment is based; and

 

(ii)         provide a written notice to the Original Holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the applicable Floor Price was determined and setting forth the adjusted applicable Floor Price.

 

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(h)          Conversion Agent. The Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require any adjustment of the applicable Floor Price or with respect to the nature, extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Conversion Agent shall be fully authorized and protected in relying on any Officers’ Certificate delivered pursuant to this Section 9(h) and any adjustment contained therein and the Conversion Agent shall not be deemed to have knowledge of any adjustment unless and until it has received such certificate. The Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any Ordinary Shares, or of any other securities or property, that may at the time be issued or delivered with respect to any Series B Shares; and the Conversion Agent makes no representation with respect thereto. The Conversion Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any Ordinary Shares pursuant to the conversion of Series B Shares or to comply with any of the duties, responsibilities or covenants of the Company contained in this Section 9.

 

(i)          Fractional Shares. No fractions of Ordinary Shares will be issued to holders of the Series B Shares upon conversion. In lieu of fractional shares otherwise issuable, holders will be entitled to receive an amount in cash equal to the fraction of an Ordinary Share, calculated on an aggregate basis in respect of the Series B Shares being converted, multiplied by the Closing Price of the Ordinary Shares on the Trading Day immediately preceding the applicable Conversion Date.

 

Section 10.           Adjustment for Reorganization Events.

 

(a)          Reorganization Events. In the event of:

 

(i)          any consolidation, merger, amalgamation, binding share exchange or reclassification involving the Company in which all or substantially all issued and outstanding Ordinary Shares are converted into or exchanged for cash, securities or other property of the Company or another Person; or

 

(ii)         the completion of any sale or other disposition in one transaction or a series of transactions of all or substantially all the assets of the Company to another Person;

 

each of which is referred to as a “Reorganization Event”, each Series B Share issued and outstanding immediately prior to such Reorganization Event will, without the consent of the Holders of the Series B Shares, become convertible into the kind and amount of securities, cash and other property, if any (the “Exchange Property”), receivable in such Reorganization Event (without any interest thereon, and without any right to dividends or distributions thereon that have a record date that is prior to the applicable Conversion Date) per Ordinary Share by a holder of Ordinary Shares that is not a Person with which the Company effected such consolidation, merger, binding share exchange or reclassification, or to which such sale or other disposition was made, as the case may be (each of the Company and any such other Person, a “Constituent Person”), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Ordinary Shares held by Affiliates and non-Affiliates of the Company; provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each Ordinary Share held immediately prior to such Reorganization Event by a Person other than a Constituent Person or an Affiliate thereof (due to elections or otherwise), then for the purpose of this Section 10(a), the kind and amount of securities, cash and other property receivable upon such Reorganization Event will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Ordinary Shares (other than Constituent Persons and Affiliates thereof) that affirmatively make an election (or of all such holders if none make an election). On each Conversion Date following a Reorganization Event, the Conversion Rate then in effect will be applied to the Exchange Property received per Ordinary Share, as determined in accordance with this Section 10.

 

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(b)          Successive Reorganization Events. The above provisions of this Section 10 shall similarly apply to successive Reorganization Events and the provisions of Section 9 shall apply to any securities of the Company (or any successor) received by the holders of the Ordinary Shares in any such Reorganization Event.

 

(c)          Reorganization Event Notice. The Company (or any successor) shall, within 20 days after the occurrence of any Reorganization Event, provide written notice to the Original Holders of such occurrence of such event and of the kinds and amounts of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 10.

 

Section 11.           Remarketing.

 

(a)          At any time following November 30, 2022, unless a Competing Remarketing is occurring and has not terminated, the Original Holders may elect, at their option, to cause the Company to engage the Remarketing Agent(s) on either a “best efforts” or firm commitment basis at the option of the Company and enter into the Remarketing Agreement to remarket the Series B Shares in accordance with this Section 11 (a “Remarketing”). Each electing Original Holder (collectively, the “Participating Holders”) may have all, but not less than all, of their Series B Shares remarketed in such Remarketing by delivering such Series B Shares, along with written notice of their election (a “Remarketing Notice”), to the Company and the Transfer Agent. The Remarketing Agent(s) shall be selected by the Company, in consultation with the Original Holders, pursuant to Section 11(l). The Original Holders may, as a group, only cause one Remarketing pursuant to this Section 11; provided, that following each Unsuccessful Remarketing hereunder, the Original Holders, as a group, shall be permitted to cause another Remarketing; provided, further, that any remarketing pursuant to Section 11(h) of the Series A Certificate of Designations in which the Original Holders elect to participate shall not be deemed a Remarketing for the purposes of this Certificate of Designations. Nothing in this Section 11 shall preclude the Company from exercising its redemption rights under Section 6(a) at any time permitted thereunder.

 

(b)          Upon receipt of any Remarketing Notice, the Company shall use its reasonable best efforts to engage the Remarketing Agent(s) and enter into the Remarketing Agreement as promptly as practicable, but in any event within 30 days after receipt of such Remarketing Notice (the “Engagement Deadline”). The Company shall notify the Remarketing Agent(s) in writing of the aggregate number of Series B Shares to be remarketed and shall provide such other information and cooperation to the Remarketing Agent(s) as is reasonably necessary or desirable to conduct the Remarketing.

 

(c)          The Company shall cause the Remarketing to be conducted over a period of up to 10 consecutive Business Days (or such longer period as the Company, the Remarketing Agent and the Participating Holders may mutually agree (each such period, a “Remarketing Period”)) selected by the Company, the Remarketing Agent and the Participating Holders that falls during the Remarketing Window. Pursuant to, and subject to the terms of, the Remarketing Agreement, the Company shall cause the Remarketing Agent(s) to use its reasonable best efforts to remarket such Series B Shares at or above the Original Remarketing Price.

 

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(d)          If the Remarketing Agent(s) determine, prior to the commencement of the Remarketing Period, that the Remarketing is unlikely to be successful at or above the Original Remarketing Price on the existing terms of the Series B Shares, then the Remarketing Agent(s) shall notify the Company and the Participating Holders thereof. In such event, the Participating Holders, in connection with the Remarketing, may either (i) terminate the Remarketing by delivery of written notice thereof to the Company (any such terminated Remarketing shall constitute an Unsuccessful Remarketing for purposes of this Certificate of Designations), or (ii) request, in writing, that the dividend rate on all Series B Shares (whether or not remarketed) be increased by the Company to a rate that would allow the Series B Shares to be remarketed at the Original Remarketing Price and, if the Board of Directors so approves, such dividends will be payable quarterly in arrears, commencing on the January 1, April 1, July 1 or October 1 immediately succeeding the Remarketing Settlement Date in accordance herewith, when, as and if declared by the Board of Directors. In addition, pursuant to the terms hereof, (A) the earliest redemption date for the Series B Shares may be changed to be a later date, and (B) such other changes to the terms of the Series B Shares as may be agreed between the Company and the Participating Holders may be made. These modifications shall become effective if the Remarketing is successful, without the consent of the Holders and notwithstanding anything to the contrary in this Certificate of Designations, on the Remarketing Settlement Date. If a Successful Remarketing occurs, the Company will request the Depositary to notify the Depositary Participants holding Series B Shares of any Modified Dividend Rate, Modified Redemption Date, dividend payment dates and other modified terms (any such terms, “Modified Terms”) for the Series B Shares on the Business Day following the date of the Successful Remarketing. Any Modified Terms shall be made with the intention of preserving any then-existing rating agency equity credit for the Series B Shares. In the event of any Remarketing on Modified Terms, the Company shall cause the Remarketing Agent(s) to use its reasonable best efforts to remarket such Series B Shares during the Remarketing Period on the Modified Terms at the highest price reasonably attainable by the Remarketing Agent(s), but, without the prior consent of the Participating Holders, no less than 90% of the Liquidation Preference for the Series B Shares to be remarketed (any such price, a “Modified Remarketing Price”).

 

(e)          If the Remarketing Agent(s) is able to remarket such Series B Shares for a Remarketing Price permitted by this Section 11 in the Remarketing in accordance with the Remarketing Agreement (a “Successful Remarketing”), the Company and the Participating Holders shall cause the Transfer Agent to transfer the remarketed Series B Shares to the Remarketing Agent(s) upon confirmation of the Company’s receipt of proceeds of such Successful Remarketing. Settlement shall occur on the Remarketing Settlement Date. The Remarketing Agent(s) shall remit the proceeds of the Successful Remarketing to the Participating Holders on the Remarketing Settlement Date.

 

(f)          If, in spite of its reasonable best efforts, the Remarketing Agent(s) cannot remarket the Series B Shares as set forth above during the Remarketing Period at a price not less than the Remarketing Price or the Modified Remarketing Price, as applicable, or a condition precedent set forth in the Remarketing Agreement is not fulfilled, the Remarketing will be deemed to have been unsuccessful (an “Unsuccessful Remarketing”). The Company shall notify, in writing, the Participating Holders and the Transfer Agent of the Unsuccessful Remarketing on the Business Day immediately following the last date of the Remarketing Period. Promptly (but in any event within five Business Days) after receipt of written notice from the Company of an Unsuccessful Remarketing, the Transfer Agent will return Series B Shares to the appropriate Holders. The Remarketing to which such any Unsuccessful Remarketing relates shall terminate for all purposes upon the delivery of the notification set forth in the immediately preceding sentence.

 

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(g)          If there is a Successful Remarketing at a Modified Remarketing Price, then the Company shall reimburse (the “Remarketing Reimbursement”) each Participating Holder (the “Reimbursed Holders”) for an amount equal to the excess, if any, of the Liquidation Preference for the Series B Shares that such Reimbursed Holder elected to include in the Remarketing over the aggregate Modified Remarketing Price of such Series B Shares (the “Remarketing Loss”); provided that the Remarketing Loss with respect to any Series B Share shall not exceed 10% of the Liquidation Preference for such Series B Share. The Remarketing Reimbursement may be paid by the Company in cash or by issuing duly authorized and fully paid and nonassessable Ordinary Shares or by a combination thereof, in the Company’s discretion. Any Remarketing Reimbursement to be paid in cash shall be paid to the Reimbursed Holders on the Remarketing Settlement Date. If any portion of the Remarketing Reimbursement is paid by the delivery of Ordinary Shares (such dollar amount, the “Remarketing Loss Share Amount”), then (x) the number of Ordinary Shares deliverable in respect of such portion shall be equal to the result of (i) the portion of the Remarketing Loss being reimbursed in Ordinary Shares, divided by (ii) a dollar amount equal to the higher of (A) an 8.0% discount to the average of the VWAP per Ordinary Share on each of the 30 consecutive Trading Days from, but excluding the Remarketing Settlement Date (the “Remarketing Loss Share Pricing Period”), and (B) $6.00, and (y) such Ordinary Shares shall be delivered to the Reimbursed Holders on the first Business Day following the end of the Remarketing Loss Share Pricing Period plus an amount in cash equal to the Remarketing Interest Amount. The Remarketing Reimbursement shall be treated by the Company and the Original Holders as proceeds from the sale or exchange of Series B Shares for United States federal (and other applicable) tax purposes.

 

(h)          Within five Business Days after receipt of any Remarketing Notice, the Company shall notify the Original Series A Holders (but only if they still hold Series A Shares) of the Remarketing (a “Series A Remarketing Notice”) and provide for a process by which such Original Series A Holders may elect to participate in the Remarketing, subject to the terms of this Section 11(h). The Remarketing Notice shall specify the anticipated timing for the Remarketing and the Engagement Deadline. The electing Original Series A Holders (the “Participating Series A Holders”) may have their Series A Shares remarketed in such Remarketing by delivering their Series A Shares, along with written notice of their election (a “Series A Participation Notice”), to the Company and the Transfer Agent (with a copy of such notice to the Original Holders) by the Engagement Deadline. Any such election shall be irrevocable with respect to such Remarketing. With respect to the remarketing of any Series A Shares included in any Remarketing pursuant to this Section 11(h) (the “Included Series A Shares”): (i) the Included Series A Shares shall be treated equivalently to the Series B Shares; (ii) the Participating Holders shall be entitled to control the Remarketing and make all decisions in respect of the Remarketing pursuant to this Section 11 and the Remarketing Agreement, including the termination of any Remarketing; (iii) the Company shall cause any Modified Terms to be applied to the Series A Shares; and (iv) if the Remarketing Agent(s) advise the Company and the Participating Holders that in its opinion the number of Series B Shares and Included Series A Shares proposed to be included in such Remarketing exceeds the number of Series B Shares and Included Series A Shares which can be sold in such Remarketing without materially delaying or jeopardizing the success of the Remarketing (including the amount of the Remarketing Price for the Series B Shares and Included Series A Shares proposed to be sold in such Remarketing), the Company shall cause the Remarketing Agent(s) to remarket only such number of Series B Shares and Included Series A Shares that in the opinion of such Remarketing Agent(s) can be sold in such Remarketing without materially delaying or jeopardizing the success of the Remarketing (including the amount of the Remarketing Price for the Series B Shares and Included Series A Shares proposed to be sold in such Remarketing), and (v) the Participating Series A Holders shall be liable for the underwriting discounts and commissions in accordance with Section 14(b). The reduced number of Series B Shares and Included Series A Shares to be included in any such Remarketing will be calculated in proportion to the aggregate amount of liquidation preference represented by Series B Shares and Included Series A Shares that were to be included in such Remarketing.

 

(i)          The Company agrees to use its reasonable best efforts to ensure that, if required by applicable law, a registration statement, including a prospectus, under the Securities Act with regard to the full amount of the Series B Shares to be remarketed in the Remarketing in each case shall be effective with the United States Securities and Exchange Commission in a form that may be used by the Remarketing Agent(s) in connection with such Remarketing (unless such registration statement is not required under the applicable laws and regulations that are in effect at that time or unless the Company conducts the Remarketing in accordance with an exemption under the securities laws (including Rule 144A under the Exchange Act)).

 

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(j)          In connection with a Remarketing, the Board of Directors shall determine any Modified Terms pursuant to Section 11(d) after consultation with the Remarketing Agent; provided that any such changes are only those either requested by the Participating Holders or to which the Participating Holders consent. In the event of a Successful Remarketing, the Dividend Rate may be increased, a Modified Redemption Date may be established, and/or other Modified Terms may be established, in each case, on the Remarketing Settlement Date, to the applicable Modified Dividend Rate and/or Modified Redemption Date as determined by the Board of Directors after consultation with the Remarketing Agent(s), and the Company shall (i) notify each of the Transfer Agent and the Conversion Agent by an Officer’s certificate delivered to the Transfer Agent and the Conversion Agent and (ii) request the Depositary to notify its Depositary Participants holding Series B Shares, in each case, of the Modified Terms established for the Series B Shares during the Remarketing on the Business Day following the date of the Successful Remarketing. The Dividend Rate cannot be decreased, and no modification that is detrimental to the Holders can be made, in connection with a Remarketing. Any modified terms of the Series B Shares in connection with a Remarketing shall apply to every Series B Share, whether or not remarketed, and to every Series A Share (without any further action by the holders of Series A Shares). In the event of an Unsuccessful Remarketing, the Dividend Rate and the other terms of the Series B Shares will not be modified.

 

(k)          The Company shall provide the Original Holders (but only if they hold any Series B Shares) with written notice of the termination of any remarketing pursuant to Section 11 of the Series A Certificate of Designations. Any change or modification to the terms of the Series A Shares as a result of any Series A Remarketing shall also be applied to the terms of the Series B Shares (without any further action by the Holders). The Modified Dividend Rate cannot result in an overall rate that is less than the then-applicable Dividend Rate, and no modification that is detrimental to the Holders can be made, in connection with modifications to the Series B Shares resulting from a Series A Remarketing. Any participation by an Original Holder in a Remarketing pursuant to Section 11(h) of the Series A Certificate of Designation shall not constitute a Remarketing pursuant to this Section 11.

 

(l)          The Company shall, within 10 days of the receipt of a Remarketing Notice, select, in consultation with, and subject to the approval of, the Original Holders, the Remarketing Agent(s) for any Remarketing; provided that (A) the Original Holders may not unreasonably withhold, delay or condition their approval and (B) that any Remarketing Agent(s) so selected shall be a financial institution of nationally recognized standing in the United States. The Company shall cause any Remarketing Agreement to contain terms that reflect, and are consistent with, the terms of this Section 11. If the Company fails to select a Remarketing Agent within 10 days of the receipt of a Remarketing Notice, the Original Holders shall select the Remarketing Agent subject to the proviso provided under clause (B) in this Section 11(l).

 

(m)          The Company shall provide written notice of any modifications to the terms of the Series B Shares as a result of a Remarketing or a Series A Remarketing to all Holders within five Business Days after the time any such modifications become effective.

 

Section 12.           Voting Rights.

 

(a)          General. The Holders shall not be entitled to vote on, consent to or take any other action with respect to any matter except as set forth herein or as otherwise required by applicable law.

 

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(b)          Right to Appoint Two Directors Upon Nonpayment Events.

 

(i)          If and whenever dividends on the Series B Shares, or on any other class or series of Parity Dividend Share, have not been declared or paid in an aggregate amount equal, as to any particular class or series, to at least six quarterly dividend periods, whether consecutive or not (a “Nonpayment”), the Holders, together with the holders of any and all classes and series of Parity Dividend Share having “like voting rights” (i.e., being similarly entitled to vote for two additional directors at such time) (the Holders and any such other holders, collectively, the “Voting Holders”), shall have the right, voting separately as a single class without regard to class or series (and with voting rights allocated pro rata based on the liquidation preference of each such class or series), to the exclusion of the holders of Ordinary Shares, to Appoint (as defined below) two additional directors from among such nominees, in the manner provided in this Section 12(b). Each such director Appointed by the Voting Holders pursuant to this Section 12(b) is herein called a “Preferred Share Director.” At no time shall the Board of Directors include more than two Preferred Share Directors.

 

(ii)         Nomination. At any time when the Voting Holders are entitled to Appoint a Preferred Share Director pursuant to this Section 12(b), any one or more of the Holders entitled to receive at least a majority in aggregate liquidation preference of the Series B Shares then issued and outstanding and entitled to Appoint under the terms of such shares, and/or any one or more holders of any other class or series of Parity Dividend Shares having like voting rights then issued and outstanding, shall have the right to recommend individuals to the Company to be Appointed as Preferred Share Directors. Such recommendations shall be in writing and shall be accompanied by a Director Acceptance