-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I4vZUgmHlE0aeqmRZb2PDzVjAYTrnwD8w0LdDoHFFzeOyCumCQehsKhF07hNQIN5 GX5yYCkp6iSVHyK/iHdrpw== 0000909518-05-000805.txt : 20051017 0000909518-05-000805.hdr.sgml : 20051017 20051017172226 ACCESSION NUMBER: 0000909518-05-000805 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20051017 DATE AS OF CHANGE: 20051017 GROUP MEMBERS: CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P. GROUP MEMBERS: CAPITAL Z MANAGEMENT, LLC GROUP MEMBERS: CAPITAL Z PARTNERS, L.P. GROUP MEMBERS: CAPITAL Z PARTNERS, LTD. GROUP MEMBERS: CAPITAL Z PXRE HOLDINGS PRIVATE, LLC GROUP MEMBERS: CAPITAL Z PXRE HOLDINGS, LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL Z FINANCIAL SERVICES FUND II LP CENTRAL INDEX KEY: 0001075567 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: ONE CHASE MANHATTAN PLAZA CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2128988700 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PXRE GROUP LTD CENTRAL INDEX KEY: 0001091748 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 980214719 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-57013 FILM NUMBER: 051141534 BUSINESS ADDRESS: STREET 1: PXRE HOUSE STREET 2: 110 PITTS BAY ROAD CITY: PEMBROKE STATE: D0 ZIP: HM 08 BUSINESS PHONE: 4412965858 MAIL ADDRESS: STREET 1: P O BOX HM 1282 CITY: HAMILTON BERMUDA STATE: D0 ZIP: HM FX SC 13D/A 1 jd10-17_13da3.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ SCHEDULE 13D (RULE 13d-101) (Amendment No. 3) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) PXRE GROUP LTD. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $1.00 PER SHARE - -------------------------------------------------------------------------------- (Title of Class of Securities) G73018106 - -------------------------------------------------------------------------------- (CUSIP Number) Capital Z Management, LLC 54 Thompson Street New York, New York 10012 Attention: Craig Fisher, Esq. (212) 965-0800 - -------------------------------------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) October 7, 2005 - -------------------------------------------------------------------------------- (Date of event which requires filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), (f) or (g), check the following box. [_] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. ========= ============================================================================================================= 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Capital Z PXRE Holdings, LLC - --------- ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - --------- ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - Contributions from Partners - --------- ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware ============================================ ======= ================================================================== 7 SOLE VOTING POWER NUMBER OF SHARES 4,381,897 (1) BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------- ------- ------------------------------------------------------------------ 8 SHARED VOTING POWER - -------------------------------------------- ------- ------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 4,381,897 (1) - -------------------------------------------- ------- ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER - --------- ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,874,680 (2) - --------- ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [X] - --------- ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.6% - --------- ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - --------- ------------------------------------------------------------------------------------------------------------- (1) Assumes conversion of all Class A Convertible Common Shares, par value $1.00 per share ("Convertible Common Shares"), held by CapZ PXRE Holdings, LLC ("Holdings") to Common Shares, par value $1.00 per share ("Common Shares"), on a one-for-one basis. (2) Does not include Common Shares issuable upon exchange of 19,894 and 106 Series D Perpetual Non-Voting Preferred Shares, par value $1.00 per share (the "Series D Preferred Shares"), held by Holdings and CapZ PXRE Holdings Private, LLC ("Holdings Private"). See Items 5 and 6. Includes 2,456,943 Common Shares, par value $1.00 per share ("Common Shares") issuable upon conversion of 3,151 and 16 Series A Convertible Voting Preferred Shares, par value $1.00 per share (the "Series A Preferred Shares") held by Capital Z Financial Services Fund II, L.P. ("Fund II") and Capital Z Financial Services Private Fund II, L.P. ("Private Fund II"), respectively, and 4,405,238 Common Shares issuable upon conversion of an equal number of Convertible Common Shares, held by Holdings and Holdings Private. Assumes conversion of all Series A Preferred Shares beneficially owned by the Reporting Persons to Common Shares at a conversion price of $12.89 per share. 2 ========= ============================================================================================================= 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Capital Z PXRE Holdings Private, LLC - --------- ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - --------- ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - Contributions from Partners - --------- ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware ============================================ ======= ================================================================== 7 SOLE VOTING POWER NUMBER OF SHARES 23,341 (1) BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------- ------- ------------------------------------------------------------------ 8 SHARED VOTING POWER - -------------------------------------------- ------- ------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 23,341 (1) - -------------------------------------------- ------- ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER - --------- ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,874,680 (2) - --------- ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [X] - --------- ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.6% - --------- ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - --------- ------------------------------------------------------------------------------------------------------------- (1) Assumes conversion of all Convertible Common Shares held by Holdings Private to Common Shares on a one-for-one basis. (2) Does not include Common Shares issuable upon exchange of 19,894 and 106 Series D Perpetual Non-Voting Preferred Shares, par value $1.00 per share (the "Series D Preferred Shares"), held by Holdings and Holdings Private. See Items 5 and 6. Includes 2,456,943 Common Shares issuable upon conversion of 3,151 and 16 Series A Preferred Shares held by Fund II and Private Fund II, respectively, and 4,405,238 Common Shares issuable upon conversion of an equal number of Convertible Common Shares, held by Holdings and Holdings Private. Assumes conversion of all Series A Preferred Shares beneficially owned by the Reporting Persons to Common Shares at a conversion price of $12.89 per share. 3 ========= ============================================================================================================= 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Capital Z Financial Services Fund II, L.P. - --------- ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - --------- ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - Contributions from Partners - --------- ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Bermuda ============================================ ======= ================================================================== 7 SOLE VOTING POWER NUMBER OF SHARES 2,444,531 (1) BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------- ------- ------------------------------------------------------------------ 8 SHARED VOTING POWER 4,381,897 (2) - -------------------------------------------- ------- ------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 2,444,531 (1) - -------------------------------------------- ------- ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 4,381,897 (2) - --------- ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,874,680 (3) - --------- ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [X] - --------- ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.6% - --------- ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - --------- ------------------------------------------------------------------------------------------------------------- (1) Assumes conversion of 3,151 Series A Preferred Shares held by Fund II to Common Shares at a conversion price of $12.89 per share. (2) Assumes conversion of all Convertible Common Shares held by Holdings to Common Shares on a one-for-one basis. (3) Does not include Common Shares issuable upon exchange of 19,894 and 106 Series D Preferred Shares, held by Holdings and Holdings Private. See Items 5 and 6. Includes 2,456,943 Common Shares issuable upon conversion of 3,151 and 16 Series A Preferred Shares held by Fund II and Private Fund II, respectively, and 4,405,238 Common Shares issuable upon conversion of an equal number of Convertible Common Shares, held by Holdings and Holdings Private. Assumes conversion of all Series A Preferred Shares beneficially owned by the Reporting Persons to Common Shares at a conversion price of $12.89 per share. 4 ========= ============================================================================================================= 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Capital Z Financial Services Private Fund II, L.P. - --------- ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - --------- ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - Contributions from Partners - --------- ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Bermuda - -------------------------------------------- ------- ------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF SHARES 12,413 (1) BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------- ------- ------------------------------------------------------------------ 8 SHARED VOTING POWER 23,341 (2) - -------------------------------------------- ------- ------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 12,413 (1) - -------------------------------------------- ------- ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 23,341 (2) - --------- ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,874,680 (3) - --------- ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [X] - --------- ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.6% - --------- ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - --------- ------------------------------------------------------------------------------------------------------------- (1) Assumes conversion of 16 Series A Preferred Shares held by Private Fund II to Common Shares at a conversion price of $12.89 per share. (2) Assumes conversion of all Convertible Common Shares held by Holdings Private to Common Shares on a one-for-one basis. (3) Does not include Common Shares issuable upon exchange of 19,894 and 106 Series D Preferred Shares, held by Holdings and Holdings Private. See Items 5 and 6. Includes 2,456,943 Common Shares issuable upon conversion of 3,151 and 16 Series A Preferred Shares held by Fund II and Private Fund II, respectively, and 4,405,238 Common Shares issuable upon conversion of an equal number of Convertible Common Shares, held by Holdings and Holdings Private. Assumes conversion of all Series A Preferred Shares beneficially owned by the Reporting Persons to Common Shares at a conversion price of $12.89 per share. 5 ========= ============================================================================================================= 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Capital Z Partners, L.P. - --------- ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - --------- ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS Not Applicable - --------- ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Bermuda - -------------------------------------------- ------- ------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------- ------- ------------------------------------------------------------------ 8 SHARED VOTING POWER 6,862,181 (1) - -------------------------------------------- ------- ------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER - -------------------------------------------- ------- ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 6,862,181 (1) - --------- ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,874,680 (1) - --------- ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [X] - --------- ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.6% - --------- ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - --------- ------------------------------------------------------------------------------------------------------------- (1) Does not include Common Shares issuable upon exchange of 19,894 and 106 Series D Preferred Shares, held by Holdings and Holdings Private. See Items 5 and 6. Includes 2,456,943 Common Shares issuable upon conversion of 3,151 and 16 Series A Preferred Shares held by Fund II and Private Fund II, respectively, and 4,405,238 Common Shares issuable upon conversion of an equal number of Convertible Common Shares, held by Holdings and Holdings Private. Assumes conversion of all Series A Preferred Shares beneficially owned by the Reporting Persons to Common Shares at a conversion price of $12.89 per share. 6 ========= ============================================================================================================= 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Capital Z Partners, Ltd. - --------- ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - --------- ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS Not Applicable - --------- ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Bermuda - -------------------------------------------- ------- ------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------- ------- ------------------------------------------------------------------ 8 SHARED VOTING POWER 6,862,181 (1) - -------------------------------------------- ------- ------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER - -------------------------------------------- ------- ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 6,862,181 (1) - --------- ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,874,680 (1) - --------- ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [X] - --------- ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.6% - --------- ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - --------- ------------------------------------------------------------------------------------------------------------- (1) Does not include Common Shares issuable upon exchange of 19,894 and 106 Series D Preferred Shares, held by Holdings and Holdings Private. See Items 5 and 6. Includes 2,456,943 Common Shares issuable upon conversion of 3,151 and 16 Series A Preferred Shares held by Fund II and Private Fund II, respectively, and 4,405,238 Common Shares issuable upon conversion of an equal number of Convertible Common Shares, held by Holdings and Holdings Private. Assumes conversion of all Series A Preferred Shares beneficially owned by the Reporting Persons to Common Shares at a conversion price of $12.89 per share. 7 ========= ============================================================================================================= 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Capital Z Management, LLC - --------- ------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - --------- ------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS Not Applicable - --------- ------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - --------- ------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------- ------- ------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF SHARES 12,499 (1) BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------- ------- ------------------------------------------------------------------ 8 SHARED VOTING POWER - -------------------------------------------- ------- ------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 12,499 (1) - -------------------------------------------- ------- ------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER - --------- ------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,874,680 (2) - --------- ------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES [X] - --------- ------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.6% - --------- ------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - --------- -------------------------------------------------------------------------------------------------------------
(1) Includes 7,500 restricted Common Shares, and an options to purchase 4,999 Common Share exercisable within 60 days. (2) Does not include Common Shares issuable upon exchange of 19,894 and 106 Series D Preferred Shares, held by Holdings and Holdings Private. See Items 5 and 6. Includes 2,456,943 Common Shares issuable upon conversion of 3,151 and 16 Series A Preferred Shares held by Fund II and Private Fund II, respectively, and 4,405,238 Common Shares issuable upon conversion of an equal number of Convertible Common Shares, held by Holdings and Holdings Private. Assumes conversion of all Series A Preferred Shares beneficially owned by the Reporting Persons to Common Shares at a conversion price of $12.89 per share. 8 This Amendment No. 3 amends the Statement of Schedule 13D (the "Initial Statement on Schedule 13D") filed on June 27, 2003 by Capital Z Financial Services Fund II, L.P., a Bermuda limited partnership ("Capital Z Fund II"), Capital Z Financial Services Private Fund II, L.P. ("Capital Z Private Fund II"), Capital Z Partners, L.P., a Bermuda limited partnership ("Capital Z L.P."), Capital Z Partners, Ltd., a Bermuda corporation ("Capital Z Ltd.") and Capital Z Management, LLC, a Delaware limited liability company ("Capital Z Management"), as amended by Amendment No 1., filed on December 29, 2004 and Amendment No. 2, filed on April 8, 2005 (as so amended, the "Initial Statement on Schedule 13D"). Capital Z Fund II, Capital Z Private Fund II, Capital Z Ltd., Capital Z L.P. ,Capital Z Management, CapZ PXRE Holdings, LLC ("Holdings") and CapZ PXRE Holdings Private, LLC are collectively referred to as the "Reporting Persons". This Amendment No. 3 incorporates by reference all of the information contained in the Initial Statement on Schedule 13D except to the extent that the information contained herein amends and supplements the information contained on the Initial Statement on Schedule 13D. Capitalized terms used in this Amendment without definition have the meanings ascribed to them in the Initial Statement on Schedule 13D. ITEM 2. IDENTITY AND BACKGROUND. Item 2 of the Initial Statement on Schedule 13D is hereby amended by adding the following: Holdings and Holdings Private are each a Delaware limited liability company formed for the purpose of holding and acquiring an interest in Issuer. The principal business address of Reporting Person is 54 Thompson Street, New York, New York 10012. Information regarding the control persons and executive officers of the Reporting Persons is set forth on Schedule I attached hereto, which Schedule is hereby incorporated by reference. Except as set forth on Schedule I, all such persons are citizens of the United States. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Fund II and Private Fund II agreed to purchase directly or through one or more of their affiliates, pursuant to that certain Share Purchase Agreement, dated as of September 29, 2005 (the "Share Purchase Agreement"), by and among the Company and the purchasers named therein, and subject to certain closing conditions contained therein, an aggregate of 20,000 shares of Series D Perpetual Non-Voting Preferred Shares, par value $1.00 per share, of the Company (the "Series D Preferred Shares") for an aggregate purchase price of $20,000,000. The following Reporting Persons purchased Series D Preferred Shares on October 7, 2005 in the following amounts: - ----------------------- ------------------------------ ------------------------- Number of Series D Preferred Aggregate Reporting Person Shares Purchased Purchase Price - ----------------------- ------------------------------ ------------------------- Holdings 19,894 $ 19,894,000 - ----------------------- ------------------------------ ------------------------- Holdings Private 106 $106,000 - ----------------------- ------------------------------ ------------------------- None of the Reporting Persons intends to borrow any funds in connection with the purchase of the Series D Preferred Shares, which were funded from contributions by partners of the applicable Reporting Person. 9 ITEM 4. PURPOSE OF TRANSACTION. The Reporting Persons consummated the transactions described herein in order to monetize a portion of their investment in the Company. The Reporting Persons intend to review continuously their position in the Company. Depending upon further evaluations of the business prospects of the Company and upon other developments, including, but not limited to, general economic and business conditions and stock market conditions, the Reporting Persons may retain or from time to time increase their holdings or dispose of all or a portion of their holdings subject to any applicable legal and contractual restrictions on their ability to do so in privately negotiated transactions, open market purchases or otherwise. The Reporting Persons also intend to continue to have active participation in the management of the Company through representation on the Board of Directors. Except as set forth in this Item 4 (including the matters described in Item 6 in the Initial Statement on Schedule 13D which are incorporated in this Item 4 by reference), the Reporting Persons have no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Securities Exchange Act of 1934, as amended. ITEM 5. INTEREST IN SECURITIES OF ISSUER. (a) - (b) The information on the cover pages is incorporated herein by reference. Capital Z Management may be deemed to be part of a group together with Capital Z Fund II, Capital Z Private Fund II, Capital Z L.P. and Capital Z Ltd. and therefore be deemed to beneficially own the shares beneficially owned by Capital Z Fund II, Capital Z Private Fund II, Capital Z L.P. and Capital Z Ltd. but no Reporting Person affirms the existence of any such group. Such group would beneficially own 6,874,680 Common Shares, assuming conversion of all Preferred Shares (but without giving effect to the exchange of Series D Preferred Series to Common Shares) held by such group at a conversion price of $12.89, which would represent 14.6% of the total outstanding Common Shares. Capital Z Management disclaims any beneficial ownership of any shares owned or deemed to be beneficially owned by Capital Z Fund II, Capital Z Private Fund II, Capital Z L.P. and Capital Z Ltd. Capital Z Fund II, Capital Z Private Fund II, Capital Z L.P. and Capital Z Ltd. each disclaim beneficial ownership of any shares owned by Capital Z Management. All calculations made herein are made in accordance with Rule 13d-3(d) of the Securities Exchange Act of 1934, as amended, and based on the 30,047,955 Common Shares and 7,037,166 convertible common shares of the Company outstanding as of October 3, 2005 (as disclosed by the Company in its Prospectus Supplement dated October 3, 2005 as filed with the SEC on October 5, 2005, after giving effect to the offering of 7,690,000 Common Shares contemplated thereby (the "Common Shares Offering")), and assuming that only those Series A Preferred Shares with respect to the relevant Reporting Person, as the case may be, are converted into Common Shares. As the exchange of the Series D Preferred Shares are conditioned on approval of the shareholders of the Company, the Common Shares (or, as applicable, the convertible common shares of the Company) issuable upon the exchange of the Series D Preferred Shares are subject to a material contingency outside the control of the holders of the Series D Preferred Shares and are not considered to be beneficially owned and not included for purposes of the calculations made herein except as otherwise noted. Assuming the exchange of all outstanding Series D Preferred Shares (including those Series D Preferred Shares held by persons other than the Reporting Persons) on the date hereof, the aggregate number of Common Shares represented by this Statement on Schedule 13D would then represent approximately 10.7% of the outstanding Common Shares, assuming (a) conversion of all Series A Preferred Shares held by the Reporting Persons at a conversion price of $12.89 (such conversion price equal to the conversion price as of June 30, 2005 10 adjusted solely for the Common Shares Offering) and (b) exchange of all outstanding Series D Preferred Shares for Common Shares or Convertible Common Shares, as applicable, at an assumed Exchange Ratio (as herein defined) equal to a fraction, of which the numerator is 1,000 and the denominator is 11, and, as applicable, the conversion of Convertible Common Shares into Common Shares at a ratio of one to one. Pursuant to the terms of the Series A Preferred Shares as set forth in Section 7(d) of the Description of Stock for the Series A Preferred Shares, the conversion price of the Series A Preferred Shares was adjusted as of June 30, 2005 to $13.26. Giving effect solely to the Common Shares Offering, pursuant to the terms of the Series A Preferred Shares as set forth in Section 7(b) of the Description of Stock for the Series A Preferred Shares, the conversion price of the Series A Shares as of June 30, 2005 would be adjusted to $12.89. (c) On October 7, 2005, Capital Z Fund II transferred 4,381,397 Convertible Common Shares to Holdings in exchange for 100% of the membership interests of Holdings. On October 7, 2005, Capital Z Private Fund II transferred 23,341 Convertible Common Shares to Holdings Private in exchange for 100% of the membership interests of Holdings Private. Other than the transactions described above, the Reporting Persons have not effected any transactions in respect of the Common Shares or the Preferred Shares within the past 60 days. (d) None. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is hereby amended and supplemented by the addition of the following: Upon the terms and conditions set forth in the Share Purchase Agreement and the Description of Stock for the Series D Preferred Stock (attached hereto as Exhibit 1 and Exhibit 2, respectively, and incorporated herein by reference), Holdings and Holdings Private have each purchased Series D Preferred Shares relating to this Statement on Schedule 13D. SHARE PURCHASE AGREEMENT The following description of the Share Purchase Agreement is a summary thereof and does not purport to be complete and is qualified in its entirety by reference to the Share Purchase Agreement (which is attached as Exhibit 1 hereto and incorporated by reference). Pursuant to the Share Purchase Agreement, the Company agreed to sell to the purchasers named therein (the "Purchasers"), and the Purchasers agreed to purchase from the Company, a total of 375,000 Series D Preferred Shares for a price of $1,000 per share and an aggregate purchase price of $375,000,000, including the purchase 18,894 and 106 Series D Preferred Shares by Holdings and Holdings Private, respectively, for an aggregate purchase price of $20,000,000. The sale and purchase of the Series D Preferred Shares (the "Closing") was consummated on October 7, 2005. Under the terms of the Share Purchase Agreement, the Company is obligated to seek and obtain appropriate shareholder approval by the holders of the Company's Common Shares, at a meeting of its shareholders, including approval of (i) the authorization of an additional 300,000,000 Common Shares and (ii) the exchange of the Series D Preferred Shares into Common Shares (such approvals, the "Required Shareholder Approval"). Pursuant to the Share Purchase Agreement, the Board of Directors of the Company shall recommend such approval, and the Company shall solicit such approval. 11 DESCRIPTION OF SERIES D STOCK The following description of the Description of Stock (the "Description of Series D Stock") is a summary thereof and does not purport to be complete and is qualified in its entirety by reference to the Description of Series D Stock (which is attached as Exhibit 2 hereto and incorporated by reference). The Series D Preferred Shares shall, with respect to dividend rights and rights upon a Liquidation Event (as defined below), rank senior to the Common Shares and all other classes or series of capital or preferred stock already established or that may be established by the Board of Directors of the Company, other than (i) the Series A Convertible Voting Preferred Shares, par value $1.00 per share, of the Company (including shares allocated as sub-series A1 Preferred Shares and A2 Preferred Shares), the Series B Preferred Shares (including shares allocated as sub-series B1 Preferred Shares and B2 Preferred Shares) and the Series C Convertible Voting Preferred Shares, par value $1.00 per share, of the Company (including shares allocated as sub-series C1 Preferred Shares and C2 Preferred Shares) (the "Series C Preferred Shares") and (ii) certain trust preferred securities guaranteed by the Company, which are senior to the Series D Preferred Shares. The Series D Preferred Shares shall rank pari passu with each other. With the exception of certain approval rights, the Series D Preferred Shares have no right to vote on any matter submitted to shareholders of the Company at an annual or general meeting of the shareholders of the Company. A majority vote of the Series D Preferred Shares is required to approve certain actions of the Company, including: (i) any creation or sale of capital shares of the Company which, as to the payment of dividends or Liquidation Preference (as defined below), are senior to or pari passu with the Series D Preferred Shares; (ii) any alteration of the terms, rights, powers or preferences of the Series D Preferred Shares; (iii) any reclassification of capital shares of the Company which, as to the payment of dividends or Liquidation Preference (as defined below), are senior to or pari passu with the Series D Preferred Shares; (iv) any amendment to the Memorandum of Association or Bye-Laws of the Company which would have an adverse effect on the rights, preferences or privileges of the holders of the Series D Preferred Shares or the Common Shares; (v) any further changes to the authorized number of, or further issuances of, Series D Preferred Shares; (vi) any amalgamation, merger or sale of the Company unless the aggregate purchase price paid to the holders of the Series D Preferred Share equals the greater of (A) the aggregate Liquidation Preference and (B) the product of (x) the aggregate purchase price paid to the holders of the Common Shares and (y) the Dividend Allocation Ratio (as defined below); (vii) any sale or transfer of 25% or more of the Company's assets; (viii) any acquisition by the Company involving aggregate consideration in excess of $100,000,000; (ix) the voluntary delisting of the Common Shares or the Series D Preferred Shares from the New York Stock Exchange or other nationally recognized securities exchange, as applicable; (x) the effect or attempt to effect a voluntary liquidation, dissolution or winding up of the Company; and (xi) any expansion by the Company into lines of business other than continuing lines of business in which the Company is currently involved. The holders of the Series D Preferred Shares shall be entitled to receive dividends simultaneously with any dividends or distributions received by the holders of the Common Shares (any such payment, a "Capital Distribution") in an amount equal to the Capital Distribution multiplied by a certain ratio (the "Dividend Allocation Ratio"). The Dividend Allocation Ratio is determined as of any date as the quotient of: (i) the aggregate Liquidation Preference of the Series D Preferred Shares; divided by (ii) the difference of (a) aggregate shareholder's equity of the Company minus (b) the aggregate Liquidation Preference of the Series D Preferred Shares. If the exchange of the Series D Preferred Shares into Common Shares or convertible common shares of the Company has not been approved by the shareholders of the Company by April 1, 2006, the holders of the Series D Preferred Shares shall be entitled to receive, retroactively to the date of issuance, additional dividends (the "PIK Dividends") at a rate of 15% per annum, increasing to a rate of 17% per annum on April 1, 2007 and further increasing to a rate of 19% per annum on April 1, 2008. Such PIK Dividends shall be paid on a quarterly basis payable in additional shares of Series D Preferred Shares. 12 The Series D Preferred Shares shall be mandatorily exchanged immediately upon the Required Shareholder Approval, into Common Shares at an exchange ratio (the "Exchange Ratio"). However, if a holder of Series D Preferred Shares or an affiliate thereof is also a holder of Series B Preferred Shares, Class B Convertible Common Shares, Series C Preferred Shares or Class C Convertible Common Shares, such holder's shares of Series D Preferred Shares shall be mandatorily exchanged into Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be. The Exchange Ratio is a fraction of which the numerator is 1,000 and the denominator is 11, and such ratio shall be adjusted for events such as stock splits or stock dividends with respect to the Common Shares. If the Series D Preferred Shares shall have not been exchanged for Common Shares or convertible common shares of the Company, as applicable, prior to December 31, 2006, the Company shall use its reasonable best efforts, subject to certain conditions, in each calendar year beginning in 2007, to issue and sell in a public offering a number of Common Shares sufficient to produce net proceeds in an amount equal to at least $100,000,000 and shall make an offer, on a pro rata basis, to repurchase Series D Preferred Shares having up to $100,000,000 in aggregate Liquidation Preference. In the event of any liquidation, dissolution or winding-up of the Company (each a "Liquidation Event"), the holders of the Series D Preferred Shares shall be entitled to receive for each outstanding Series D Preferred Share, in preference to the holders of any junior security, an amount equal to $1,000 subject to certain adjustments (the "Liquidation Preference"). ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 1. Share Purchase Agreement, dated September 29, 2005, by and among PXRE Group Ltd. and the purchasers named therein (incorporated by reference to the Share Purchase Agreement filed with the SEC as Exhibit 4.1 to the PXRE Group Ltd.'s Current Report on Form 8-K filed on September 29, 2005). 2. Description of Series D Stock. 3. Series D Perpetual Preferred Shares Registration Rights Agreement, dated as of October 7, 2005, by and among PXRE Group Ltd. and the holders of preferred shares named therein. 4. Joint Filing Agreement, dated October 17, 2005. 13 SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete, and correct. Date: October 17, 2005. CAPITAL Z FINANCIAL SERVICES FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher ----------------------------------------------------- Craig Fisher General Counsel CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher ----------------------------------------------------- Craig Fisher General Counsel CAPITAL Z PARTNERS, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher ----------------------------------------------------- Craig Fisher General Counsel CAPITAL Z PARTNERS, LTD. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher ----------------------------------------------------- Craig Fisher General Counsel CAPITAL Z MANAGEMENT, LLC. By: /s/ Craig Fisher ----------------------------------------------------- Craig Fisher General Counsel 14 CAPZ PXRE HOLDINGS, LLC By: CAPITAL Z FINANCIAL SERVICES FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher ----------------------------------------------------- Craig Fisher General Counsel CAPZ PXRE HOLDINGS PRIVATE, LLC By: CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher ----------------------------------------------------- Craig Fisher General Counsel 15 EX-2 2 jd10-14ex_2.txt Exhibit 2 --------- DESCRIPTION OF STOCK: ================================================================================ SERIES D PERPETUAL NON-VOTING PREFERRED SHARES ($1.00 PAR VALUE PER SHARE) of PXRE GROUP LTD. ================================================================================ TABLE OF CONTENTS Page 1. General..................................................................................................1 (a) Designation and Number..........................................................................1 (b) Priority........................................................................................1 2. Certain Definitions......................................................................................1 3. Voting Rights............................................................................................6 (a) General Voting Rights...........................................................................6 (b) Consent of Series D Perpetual Preferred Shares Required For Variation of Rights and Restrictions...................................................................6 4. Dividend Rights..........................................................................................8 (a) General.........................................................................................8 (b) PIK Dividends...................................................................................8 (c) Dividend Preference.............................................................................8 5. Liquidation Rights.......................................................................................9 (a) Priority........................................................................................9 (b) Notice of Liquidation..........................................................................10 6. Exchange................................................................................................10 (a) General........................................................................................10 (b) Surrender and Exchange.........................................................................11 (c) Effective Date.................................................................................11 (d) Share Certificates.............................................................................11
i DESCRIPTION OF STOCK The relative rights, preferences and restrictions granted to or imposed upon the Series D Perpetual Non-Voting Preferred Shares, par value $1.00 per share, created by PXRE Group Ltd. and upon the holders thereof are set forth below. 1. General. (a) Designation and Number. The designation of Preferred Shares created by this resolution shall be the "Series D Perpetual Non-Voting Preferred Shares, $1.00 par value per share," of the Company (hereinafter referred to as the "Series D Perpetual Preferred Shares"), and the number of Series D Perpetual Preferred Shares which the Company shall be authorized to issue shall be 375,000 shares. (b) Priority. The Series D Perpetual Preferred Shares shall rank senior to the Common Shares and all other capital shares of the Company (now or hereafter authorized or issued) other than the Senior Stock, in each case as to dividends and as to the surplus assets of the Company available for distribution upon liquidation, dissolution and winding-up as provided herein. 2. Certain Definitions. (a) For purposes of this Description of Stock, the following terms shall have the meanings indicated (such definitions to be equally applicable to both singular and plural forms of the terms defined): "Adjusted Net Income (Loss)" means, as of any Adjustment Date, the Net Income (or Net Loss) for the quarter ending on the Adjustment Date adjusted downwards by the sum of any Capital Distributions on the Common Shares and Perpetual Capital Distributions declared during the quarter ending on the Adjustment Date. "Adjustment Date" means, commencing with December 31, 2005, the last day of each calendar quarter. "Affiliate" means, as applied to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, that Person. For the purposes of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by", and "under common control with") as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through ownership of voting securities or by contract or otherwise. "Assets" of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including cash, cash equivalents, investment assets, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory and goods. "Board of Directors" means the Board of Directors of the Company. "Business Day" means any day other than a Saturday, Sunday or a day on which banking institutions in The City of New York or Bermuda are authorized or obligated by law or executive order to close. "Class B Convertible Common Shares" means the Class B Convertible Voting Common Shares, $1.00 par value per share, of the Company. "Class C Convertible Common Shares" means the Class C Convertible Voting Common Shares, $1.00 par value per share, of the Company. "Closing" has the meaning ascribed to such term in the Purchase Agreement. "Closing Date" has the meaning ascribed to such term in the Purchase Agreement. "Common Shares" means the Common Shares of the Company, par value $1.00, and shall also include any common shares of the Company hereafter issued and outstanding and any shares of the Company of any other class hereafter issued and outstanding that is not preferred as to dividends or distribution of assets in liquidation over any other class of shares of the Company and which has ordinary voting power for the election of directors of the Company. "Company" means PXRE Group Ltd. "Company Securities" has the meaning ascribed to such term in the Purchase Agreement. "Date of Issuance" means the day upon which the Series D Perpetual Preferred Shares are issued by the Company and sold to the Purchasers pursuant to the Purchase Agreement. "Description of Stock" means this Description of Stock, as amended, modified or supplemented from time to time. "Dividend Allocation Ratio" means, as of any Adjustment Date (or as of the Date of Issuance, if applicable), the quotient of: (i) the Aggregate Liquidation Preference on such Adjustment Date (or the Date of Issuance, if applicable); divided by (ii) the difference of (a) Shareholders' Equity on such Adjustment Date (or the Date of Issuance, if applicable) minus (b) the Aggregate Liquidation Preference of such Adjustment Date. 2 "Earnings Allocation Ratio" means, as of any Adjustment Date, the quotient of: (x) the Aggregate Liquidation Preference on the immediately preceding Adjustment Date; divided by (y) Shareholders' Equity on the immediately preceding Adjustment Date. "Exchange Conditions Precedent" means (i) the affirmative vote of the Company's existing shareholders (a) authorizing an additional 300,000,000 Common Shares; and (b) approving the exchange of the Series D Perpetual Preferred Shares into Common Shares. "Exchange Ratio" means, at any time of determination, the fraction of which the numerator is 1,000 and the denominator is 11; provided, however, such denominator shall be subject to adjustment for any stock split, issuance of stock dividends and other similar events in respect of the Common Shares (or in respect of the Class B Convertible Common Shares or Class C Convertible Common Shares to the extent applicable in applying the terms of the proviso set forth in the first sentence of Section 6(a) hereof) effected after September 29, 2005. "GAAP" means United States generally accepted accounting principles, consistently applied. "Indebtedness" means (a) all indebtedness of the Company and its subsidiaries, including the principal of, and premium, if any, and interest (including interest accruing after the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy laws, whether or not allowable as a claim in such proceeding) on, all indebtedness, whether outstanding currently or hereafter created (i) for borrowed money, (ii) for money borrowed by one or more other Persons and guaranteed, directly or indirectly, by the Company or any subsidiary thereof, (iii) for money borrowed by one or more other Persons for which the Company or any subsidiary thereof provides security, (iv) constituting purchase money indebtedness the payment of which the Company or any subsidiary thereof is directly or contingently liable, (v) under any lease of any real or personal property, which obligations are capitalized on the consolidated books of the Company and its subsidiaries in accordance with GAAP or (vi) under any other arrangement under which obligations are recorded as indebtedness on the consolidated books of the Company and its subsidiaries in accordance with GAAP and (b) any and all modifications, refundings, deferrals, renewals or extensions of any such indebtedness, or securities, notes or other evidences of indebtedness issued in exchange for such indebtedness. Without limiting the generality of the foregoing, the term "Indebtedness" shall include the Trust Preferred and any comparable securities of the Company or any subsidiary thereof at any time outstanding; provided that Indebtedness shall not include intercompany indebtedness outstanding or hereafter created between the Company and any of its direct or indirect wholly-owned Subsidiaries (as defined in the Purchase Agreement, but limited in this paragraph to direct and indirect wholly owned subsidiaries) or between any two or more such direct or indirect wholly owned Subsidiaries of the Company. 3 "Market Price" with respect to Common Shares, on any date, shall be deemed to be the reported closing price on the last trading day ending on the trading day before such date of determination. The reported closing price for each day shall be the reported closing price on the principal United States securities exchange or automated quotation system on which the Common Shares are then listed or admitted to trading. If the Common Shares are not then listed or admitted to trading on any national securities exchange or automated quotation system or if the closing price cannot be so determined, the Market Price shall be determined (x) by the written agreement of the Company and the respective holder and (y) in the event that no such agreement is reached within twenty (20) days after the date of the event giving rise to the need to determine the Market Price, (A) by an independent appraiser of nationally recognized standing selected by the respective holder and the Company or (B) if the respective holder and the Company cannot agree on an appraiser within twenty (20) days after the date of the event giving rise to the need to determine the Market Price, each shall select an independent appraiser of nationally recognized standing and the two appraisers shall designate a third independent appraiser of nationally recognized standing, whose appraisal shall be determinative of such value. The cost of such appraisal shall be borne by the Company. The Company shall cooperate, and shall provide all necessary information and assistance, to permit any determination under the preceding clauses (x) and (y). "Net Income (Net Loss)" means the net income (loss) reported on the consolidated statements of income and comprehensive income of the Company (after Capital Distributions on the Senior Stock but before any Perpetual Capital Distributions or any PIK Dividends), prepared in accordance with GAAP, filed periodically with the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. "Person" or "person" means an individual, corporation, partnership, firm, association, joint venture, trust, unincorporated organization, limited liability company, government, governmental body, agency, political subdivision or other entity. "PIK Dividend Value" means an amount equal to the product of: (x) the number of Series D Perpetual Preferred Shares issued during the immediately preceding calendar quarter; and (y) the Series D Perpetual Preferred Liquidation Preference as of the immediately preceding Adjustment Date. "Public Offering" means the offer for sale to the public in an underwritten offering of Common Shares pursuant to an effective registration statement filed under the Securities Act. "Public Offering Price" means the price per share at which Common Shares were offered to the public and will be sold in the underwritten Public Offering that is expected to be completed not later than October 21, 2005. 4 "Purchase Agreement" means the Share Purchase Agreement dated as of September 29, 2005 by and among the Company and the Purchasers, as the same may be amended from time to time. "Purchase Price" means an amount equal to the lower of (i) $1,000 per share and (ii) the product of the Exchange Ratio multiplied by the Public Offering Price. "Purchasers" has the meaning ascribed to such term in the Purchase Agreement. "Quarterly Allocation" means, as of any Adjustment Date, an amount equal to the product of: (x) the Adjusted Net Income (Loss) during the preceding calendar quarter; and (y) the Earnings Allocation Ratio. "Senior Stock" means only the Series A Preferred Shares, the Series B Preferred Shares and the Series C Preferred Shares. "Series A Preferred Shares" means the Series A Convertible Voting Preferred Shares, par value $1.00 per share, of the Company, including shares allocated as sub-series A1 Preferred Shares and A2 Preferred Shares. "Series B Preferred Shares" means the Series B Convertible Voting Preferred Shares, par value $1.00 per share, of the Company, including shares allocated as sub-series B1 Preferred Shares and B2 Preferred Shares. "Series C Preferred Shares" means the Series C Convertible Voting Preferred Shares, par value $1.00 per share, of the Company, including shares allocated as sub-series C1 Preferred Shares and C2 Preferred Shares. "Shareholders' Equity" means total shareholders' equity reported on the consolidated balance sheets of the Company, prepared in accordance with GAAP, and filed periodically with the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. "Trust Preferred" shall mean, collectively, (A) (i) the Junior Subordinated Deferrable Interest Debentures due 2027 of PXRE Corporation, (ii) the 8.85% Capital Trust Pass-through Securities of PXRE Capital Trust I, (iii) the PXRE Corporation Guarantee with respect to such Capital Trust Pass-through Securities; (B) (i) the Junior Subordinated Deferrable Interest Debentures due May 15, 2033 of PXRE Corporation, (ii) the 7.35% Fixed/Floating Capital Trust Pass-through Securities of PXRE Capital Statutory Trust II, (iii) the PXRE Corporation Guarantee with respect to such Capital Statutory Trust Pass-through Securities; (C) (i) the Junior Subordinated Deferrable Interest Debentures due May 23, 2033 of PXRE Corporation, (ii) the 9.75% Capital Trust Pass-through Securities of PXRE Capital Trust III, (iii) the PXRE Corporation Guarantee with respect to such 5 Capital Trust Pass-through Securities; (D) (i) the Junior Subordinated Deferrable Interest Debentures due October 29, 2033 of PXRE Corporation, (ii) the 7.70% Fixed/Floating Capital Trust Pass-through Securities of PXRE Capital Statutory Trust IV, (iii) the PXRE Corporation Guarantee with respect to such Capital Trust Pass-through Securities; and (E) (i) the Junior Subordinated Deferrable Interest Debentures due September 30, 2033 of PXRE Corporation, (ii) the 7.58% Fixed/Floating Capital Trust Pass-through Securities of PXRE Capital Statutory Trust V, and (iii) the PXRE Corporation Guarantee with respect to such Capital Trust Pass-through Securities. (b) The following terms, when used in this Description of Stock, shall have the meanings provided for such terms in the sections set forth below (such definitions to be equally applicable to both singular and plural forms of the terms defined): Term Section(s) ---- ---------- Aggregate Liquidation Preference 5(a)(i) Capital Distributions 4(a) Companies Act 4(a) Junior Stock 4(c) Maximum Lawful Rate 4(c) Perpetual Capital Distributions 4(a) Series D Perpetual Preferred Liquidation Preference 5(a)(i) Series D Perpetual Preferred Shares 1(a)(i) (c) The words "hereof", "herein" and "hereunder" and other words of similar import refer to this Description of Stock as a whole and not to any particular Section or other subdivision. (d) All dollar amounts referenced herein shall be denominated in United States dollars. 3. Voting Rights. (a) General Voting Rights. Except as set forth in Section 3(b) below, the Series D Perpetual Preferred Shares shall have no right to vote on any matter submitted to shareholders at an Annual or Special General Meeting of the Company's shareholders. (b) Consent of Series D Perpetual Preferred Shares Required For Variation of Rights and Restrictions. So long as any Series D Perpetual Preferred Shares remain issued and outstanding, unless the vote or consent of the holders of a greater number of shares shall then be required by law overriding the provisions herein, the affirmative vote or consent of the holders of greater than 50% of all of the Series D Perpetual Preferred Shares at the time issued and outstanding, voting as a class, given in person or by proxy either in writing (as may be permitted by law and the Bye-Laws) or at any special or annual meeting, shall be necessary to permit, effect or validate the taking of any of the following actions by the Company: (i) in any manner authorize, create, designate, issue or sell any class or series of capital shares or rights, options, warrants or other securities convertible into or exercisable or exchangeable for capital shares or any debt security which by its terms is convertible into or exchangeable for any equity security or has any other equity 6 feature or any security that is a combination of debt and equity, which, in each case, as to the payment of dividends or distribution of assets, including, without limitation, distributions to be made upon a liquidation, dissolution or winding-up of the Company, is pari passu with or is senior to the Series D Perpetual Preferred Shares (including without limitation, any shares of Series D Perpetual Preferred Shares (whether or not junior as to dividends or liquidation preference) having earlier mandatory redemption dates than the mandatory exchange date of the Series D Perpetual Preferred Shares) or which in any manner adversely affects the holders of the Series D Perpetual Preferred Shares, or amend the terms of any existing class or series of capital shares if the effect of such amendment would be to rank such class or series senior to or pari passu with the Series D Perpetual Preferred Shares as to dividends or distribution of assets, including, without limitation, distributions to be made upon a liquidation, dissolution or winding-up of the Company; (ii) in any manner alter or change the terms, designations, powers, preferences or relative, participating, optional or other special rights, or the qualifications, limitations or restrictions, of the Series D Perpetual Preferred Shares; (iii) reclassify the shares of any class or series of capital shares into shares of any class or series of capital shares (A) ranking, either as to payment of dividends, distributions of Assets or redemptions, including, without limitation, distributions to be made upon a liquidation, dissolution or winding-up of the Company, senior to or pari passu with the Series D Perpetual Preferred Shares (including without limitation, any shares of Series D Perpetual Preferred Shares (whether or not junior as to dividends or liquidation preference) having earlier mandatory redemption dates than the mandatory exchange date of the Series D Perpetual Preferred Shares) or (B) which in any manner adversely affects the rights of the holders of the Series D Perpetual Preferred Shares or any powers, rights, privileges or preference appertaining to the Common Shares, which such holders would have after mandatory exchange of the Series D Perpetual Preferred Shares into Common Shares; (iv) take any action to cause any amendment, alteration or repeal of any of the provisions of the Memorandum of Association or Bye-Laws, if such amendment, alteration or repeal would have an adverse effect on the rights, preferences or privileges of the holders of the Series D Perpetual Preferred Shares or any powers, rights, privileges or preference appertaining to Common Shares which such holders would have after mandatory exchange of the Series D Perpetual Preferred Shares into Common Shares (including, without limitation, by granting voting rights to holders of bonds, debentures or other obligations); 7 (v) any increase or decrease to the authorized number of Series D Perpetual Preferred Shares or issue additional Series D Perpetual Preferred Shares, except as required by the terms of this Description of Stock; (vi) any amalgamation, merger or sale of the Company unless the aggregate purchase price paid to the Series D Perpetual Preferred Shareholders equals the greater of (A) the Aggregate Liquidation Preference and (B) the product of (x) the aggregate purchase price paid to the Common Shareholders and (y) the Dividend Allocation Ratio; (vii) the sale or transfer of 25% or more of the Company's Assets (other than the payment of reinsurance claims in the ordinary course of business); (viii) in any acquisition by the Company involving aggregate consideration in excess of $100,000,000; (ix) the voluntary delisting of the Common Shares or the Series D Perpetual Preferred Shares from the New York Stock Exchange or other nationally recognized securities exchange, as applicable; (x) effect or attempt to effect a voluntary liquidation, dissolution or winding up of the Company; or (xi) an expansion by the Company into lines of business other than continuing lines of business in which the Company is currently involved. 4. Dividend Rights. (a) General. For so long as the Series D Perpetual Preferred Shares remain outstanding, the Company may not make, declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment (collectively, "Capital Distributions"), with respect to the Common Shares of the Company, unless, subject to the Bermuda Companies Act of 1981 ("Companies Act"), the Company simultaneously declares and pays a cash dividend or distribution (the "Perpetual Capital Distributions") on the Series D Perpetual Preferred Shares in an amount equal to such Capital Distribution multiplied by the Dividend Allocation Ratio as of the Adjustment Date immediately preceding the date of such Capital Distribution (or if an Adjustment Date shall have not occurred prior to the date of such Capital Distribution, then as of the Date of Issuance). (b) PIK Dividends. If the Exchange Conditions Precedent are not met by April 1, 2006, then, retroactively commencing on the Date of Issuance, additional dividends on the Series D Perpetual Preferred Shares shall begin to accrue at a rate of 15% per annum, increasing to a rate of 17% per annum on April 1, 2007 and further increasing to a rate of 19% per annum on April 1, 2008, which rate shall be calculated on the basis of a year of 360 days 8 consisting of twelve 30-day months. Such additional dividends shall be paid on a quarterly basis on each Adjustment Date in additional Series D Perpetual Preferred Shares having a liquidation preference per share equal to the Series D Perpetual Preferred Liquidation Preference as of the immediately preceding Adjustment Date ("PIK Dividends"); provided, however, that with respect to any retroactive payment of PIK Dividends made pursuant to this Section 4(b), such retroactive payment shall be made on June 30, 2006. (c) Dividend Preference. Any such dividend that is to be paid in PIK Dividends shall be payable by delivery to such holders, at their respective addresses as they appear in the stock register, of certificates representing the appropriate number of duly authorized, validly issued, fully paid and nonassessable shares of Series D Perpetual Preferred Shares to holders of Series D Perpetual Preferred Shares. Any such dividend that is to be paid in Perpetual Capital Distributions shall be payable by delivery of such amounts to such holders at their respective addresses as they appear in the stock register. Notwithstanding anything to the contrary set forth in this Section 4, if at any time during which any Series D Perpetual Preferred Share remains outstanding the dividend rate payable thereon exceeds the highest rate of interest permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto (the "Maximum Lawful Rate"), then in such event and so long as the Maximum Lawful Rate would be so exceeded, the dividend rate in respect of Series D Perpetual Preferred Shares shall be equal to the Maximum Lawful Rate; provided, however, that if at any time thereafter the dividend rate payable thereon is less than the Maximum Lawful Rate, dividends shall continue to accrue thereon at the Maximum Lawful Rate until such time as the total dividends earned are equal to the total dividends which would have been earned had the dividend rate on such Series D Perpetual Preferred Share been (but for the operation of this paragraph) the dividend rate payable since the Closing. The rights of the Series D Perpetual Preferred Shares shall rank senior in all respects to the Common Shares and all other classes and series of capital shares of the Company, including without limitation other classes and series of preferred shares other than the Trust Preferred and Senior Stock (collectively, "Junior Stock"). 5. Liquidation Rights. (a) Priority. In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary: (i) before any payment or distribution of the Assets of the Company (whether from paid in share capital, share premium or surplus) shall be made to or set apart for the holders of Junior Stock or any other shares of the Company other than the Trust Preferred and the Senior Stock, the holders of the shares of Series D Perpetual Preferred Shares shall be entitled to receive from the Assets of the Company, payment in cash of an initial amount equal to the Purchase Price (the "Series D Perpetual Preferred Liquidation Preference"). Commencing as of December 31, 2005 and on each Adjustment Date thereafter, the Series D Perpetual Preferred Liquidation Preference shall be adjusted upward or downwards by an amount equal to the 9 quotient of: (v) the change in the Aggregate Liquidation Preference as of such Adjustment Date; divided by (w) the number of Series D Perpetual Preferred Shares outstanding. The "Aggregate Liquidation Preference" shall initially be an amount equal to the product of the Purchase Price multiplied by the number of Series D Perpetual Preferred Shares issued upon Closing. Commencing as of December 31, 2005 and on each Adjustment Date thereafter, the Aggregate Liquidation Preference shall be adjusted upward or downwards by an amount equal to the sum of: (x) the Quarterly Allocation, plus (y) the PIK Dividend Value; provided that; the Aggregate Liquidation Preference shall never be less than the product of the Purchase Price multiplied by the number of Series D Perpetual Preferred Shares issued upon Closing, plus the aggregate PIK Dividends less the aggregate Perpetual Capital Distributions. If the Assets distributable upon such liquidation, dissolution or winding-up of the Company shall be insufficient to permit payment to the respective holders of the shares of Series D Perpetual Preferred Shares of the full preferential amounts as set forth in this Section 5(a)(i), then such Assets shall be distributed ratably among the shares of Series D Perpetual Preferred Shares; and (ii) any proceeds remaining after payment of the Series D Perpetual Preferred Liquidation Preference shall be distributed ratably among the Common Shares and other classes of shares of the Company in accordance with the relevant rights and restrictions thereof, if any. (b) Notice of Liquidation. Subject to any other requirement under law, written notice of any liquidation, dissolution or winding up of the Company, stating the payment date or dates when and the place or places where the amounts distributable in such circumstances shall be payable, shall be given (not less than thirty (30) days prior to any payment date stated therein), to the holders of record of the Series D Perpetual Preferred Shares at their respective addresses as the same shall appear on the register of shareholders of the Company. 6. Exchange. The following provisions are subject to compliance with applicable law, and if the exercise of these rights would violate relevant law, such rights set out below will be suspended until such rights can be exercised in compliance with applicable law: (a) General. Each Series D Perpetual Preferred Share outstanding shall be mandatorily exchanged immediately upon satisfaction of the Exchange Conditions Precedent into the number of whole Common Shares (rounded upwards or downwards) equal to the Exchange Ratio, provided, however, that if (i) at the time of such exchange, either a record holder of Series D Perpetual Preferred Shares or an Affiliate thereof is also a record holder of Series B Preferred Shares or Class B Convertible Common Shares, then such holder's Series D Perpetual Preferred Shares shall be mandatorily exchanged into the number of whole Class B Convertible Common Shares (rounded upwards or downwards) equal to the Exchange Ratio (instead of such number of Common Shares) and (ii) at the time of such exchange, either a record holder of Series D Perpetual Preferred Shares or an Affiliate thereof is also a record holder of Series C Preferred Shares or Class C Convertible Common Shares, then such holder's Series D 10 Perpetual Preferred Shares shall be mandatorily exchanged into the number of whole Class C Convertible Common Shares (rounded upwards or downwards) equal to the Exchange Ratio (instead of such number of Common Shares). The Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be, issuable upon mandatory exchange of the Series D Perpetual Preferred Shares, when such Common Shares, Class Convertible B Common Shares or Class C Convertible Common Shares, as the case may be, shall be issued in accordance with the terms hereof, shall be duly authorized, validly issued, fully paid and nonassessable Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, respectively. (b) Surrender and Exchange. Each Series D Perpetual Preferred Share will be exchanged by the holder once the Exchange Conditions Precedent have been met by surrender of such Series D Perpetual Preferred Share, to the Company at its office designated pursuant to the Bye-Laws of the Company. Such holder shall thereupon be entitled to receive the number of Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be, specified in the exchange by Section 6(a) above. The Series D Perpetual Preferred Shares shall be cancelled upon surrender. (c) Effective Date. The exchange of Series D Perpetual Preferred Shares pursuant to Section 6(c) hereof shall be deemed to have been effected immediately prior to the close of business on the Business Day on which the Exchange Conditions Precedent have been met and the Series D Perpetual Preferred Shares shall have been surrendered to the Company as provided in Section 6(b) hereof. On such day that the exchange of Series D Perpetual Preferred Shares is deemed effected, the person or persons in whose name or names any certificate or certificates for Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be, are issuable upon such exchange, as provided in this Section 6, shall be deemed to have become the holder or holders of record of such Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be. (d) Share Certificates. As promptly as practicable after the exchange of the Series D Perpetual Preferred Shares, and in any event within ten (10) Business Days thereafter, the Company at its expense (including the payment by it of any applicable issue, stamp or other taxes on the issue of the Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be, or on the share certificate therefor, other than any income or capital gains taxes) will cause to be issued in the name of and delivered to the holder thereof or as such holder may direct, a certificate or certificates for the number of Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be, to which such holder shall be entitled upon such exchange on the effective date of such exchange. 7. Offer to Repurchase. If the Series D Perpetual Preferred Shares shall have not been exchanged for Common Shares, Class B Convertible Common Shares or Class C Convertible Common Shares, as the case may be, in accordance with Section 6(a) prior to December 31, 2006, the Company shall use its reasonable best efforts, subject to the conditions set forth below, in each calendar year beginning with 2007 so long as no such mandatory exchange has occurred and the Series D Perpetual Preferred Shares remain outstanding, to issue and sell in a Public Offering a number of Common Shares sufficient to produce net proceeds in an amount at least equal to $100,000,000, shall make an offer to holders of outstanding Series D Perpetual Preferred Shares to purchase, on a pro rata basis, Series D Perpetual Preferred Shares having up to $100,000,000 in Series D Perpetual Preferred Liquidation Preference and shall purchase such Series D Perpetual Preferred Shares from holders responding to such offer to purchase at a price equal to the greater of (i) the Series D Perpetual Preferred Liquidation Preference, and (ii) the product of the Exchange Ratio multiplied by the price per Common Share realized by the Company in such Public Offering. However, the Company will not be required to sell any Common Shares for such purpose if (i) such use of proceeds from the sale of the Common Shares would have a negative impact on the Company's then current credit ratings or (ii) the price per share of any of the Common Shares would be less than 75% of the then existing Market Price per share of the Common Shares. EX-3 3 jd10-14ex_3.txt Exhibit 3 --------- PXRE GROUP LTD. SERIES D PERPETUAL PREFERRED SHARES REGISTRATION RIGHTS AGREEMENT October 7, 2005 To the Purchasers named in the Purchase Agreement Ladies and Gentlemen: PXRE Group Ltd., a Bermuda corporation (the "Company"), proposes to issue and sell in a private placement pursuant to Section 4(2) of the Securities Act (as defined below) (such issuance and sale, the "Initial Placement") to the several parties named in the Purchase Agreement (the "Initial Purchasers") upon the terms set forth in a purchase agreement dated September 29, 2005 (the "Purchase Agreement"), an aggregate amount of 375,000 shares of its Series D Perpetual Preferred Shares, par value $1.00 per share (the "Preferred Shares"). The Preferred Shares will be mandatorily exchanged into either (i) Common Shares, par value $1.00 per share, of the Company ("Common Shares"), (ii) Class B Convertible Common Shares, par value $1.00 per share, of the Company ("Class B Convertible Common Shares") and (iii) Class C Convertible Common Shares, par value $1.00 per share, of the Company ("Class C Convertible Common Shares"), in each case upon the satisfaction of certain conditions as set forth in the Description of Stock. As an inducement to you to enter into the Purchase Agreement and in satisfaction of a condition to your obligations thereunder, the Company agrees with you, (i) for your benefit and (ii) for the benefit of the holders from time to time of the Preferred Shares and the Common Shares and Convertible Common Shares issuable upon conversion of the Preferred Shares (including you), as follows: SECTION 1. DEFINITIONS As used in this Agreement, the following terms have the respective meanings set forth below: Agreement: shall mean this Registration Rights Agreement among the Initial Purchasers and the Company; Commission: shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act; Convertible Common Shares: shall mean, collectively, the Class B Convertible Common Shares and the Class C Convertible Common Shares; Description of Stock: shall mean the Description of Stock with respect to the Preferred Shares in the form attached as Exhibit B to the Purchase Agreement; Exchange Act: shall mean the Securities Exchange Act of 1934, as amended and the rules and regulations of the Commission promulgated thereunder; Holder: shall mean any holder of Registrable Securities; Majority Holders: shall mean the Holders holding a majority of the then outstanding Registrable Securities, provided, however, that Preferred Shares, and Common Shares and Convertible Common Shares for which Preferred Shares have been exchanged, which have been sold or otherwise transferred pursuant to the Shelf Registration Statement or Company Registration Statement shall not be included in the calculation of the Majority Holders; Notice and Questionnaire: shall mean a Notice of Registration Statement and Selling Shareholder Questionnaire substantially in the form of Exhibit A hereto; Person: shall mean an individual, partnership, joint-stock company, corporation, trust or unincorporated organization, and a government or agency or political subdivision thereof; Prospectus: shall mean the prospectus included in the Shelf Registration Statement or Company Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Shelf Registration Statement or Company Registration Statement, and all amendments and supplements to such prospectus, including all documents filed after the date of such prospectus by the Company under the Exchange Act and incorporated or deemed to be incorporated by reference in such prospectus; Registrable Securities: shall mean (A) the Preferred Shares, (B) the Common Shares and Convertible Common Shares issuable upon conversion of the shares of Preferred Shares and (C) any stock of the Company issued as a dividend or other distribution with respect to, or in exchange for, or upon conversion or otherwise in replacement of, the Preferred Shares, or the Common Shares or Convertible Common Shares issuable upon conversion of the Preferred Shares, provided, however, that Registrable Securities shall not include securities in clauses (A), (B) or (C) above which have been transferred pursuant to a Shelf Registration Statement or Company Registration Statement; Registration Expenses: shall mean all expenses incurred by the Company in compliance with Section 2(a) and (b) hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, fees and expenses of one counsel for the Selling Holders, blue sky fees and expenses and the expense of any special 2 audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company) but shall exclude underwriting fees, discounts and expenses with respect to the sale of the Registrable Securities; Security, Securities: shall have the meaning set forth in Section 2(I) of the Securities Act; Securities Act: shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder; Selling Expenses: shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and all fees and disbursements of counsel for each of the Selling Holders other than fees and expenses of one counsel for the Selling Holders; Shelf Registration Statement: means a "shelf" registration statement of the Company filed pursuant to the provisions of Section 2 hereof which covers some or all of the Registrable Securities on Form S-3 or on another appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission, and all amendments and supplements to such registration statement, including post-effective amendments, or any additional registration statements filed because the Company could not obtain the withdrawal of a stop order suspending the effectiveness of the Shelf Registration Statement or pursuant to Section 2(a)(i)(2) hereof, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated or deemed to be incorporated by reference therein. SECTION 2. REGISTRATION RIGHTS (a) Shelf Registration Statement. (i) The Company shall prepare and file with the Commission promptly following receipt of notice from the Holders (the "Demand Notice") and in any event within 30 days the date of the Purchase Agreement, a Shelf Registration Statement with respect to resales of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution designated by such Holders and set forth in such Shelf Registration Statement (subject to Section 2(d)(xviii) hereof) and thereafter shall use their reasonable best efforts to cause such Shelf Registration Statement to be declared effective under the Securities Act within 150 days after receipt of the Demand Notice. The Company shall supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for the Shelf Registration Statement, or by the Securities Act, the Exchange Act or the Commission. (ii) (1) Each Holder wishing to sell Registrable Securities pursuant to the Shelf Registration Statement and related Prospectus agrees to deliver to the Company the Notice and Questionnaire, together with such information as the Company shall reasonably request, to the Company at least ten business days prior to the effectiveness of the Shelf Registration Statement. The Company shall take action to name each Holder as of the date that is five calendar days 3 prior to the effectiveness of the Shelf Registration Statement so that such Holder is named as a selling security holder in the Shelf Registration Statement at the time of its effectiveness and is permitted to deliver the Prospectus forming a part thereof as of such time to purchasers of such Holder's Registrable Securities in accordance with applicable law. (2) After the Shelf Registration Statement has become effective, the Company shall, upon the request of any Holder of Registrable Securities, promptly send a Notice and Questionnaire to such Holder. From and after the date on which the Shelf Registration Statement has become effective, the Company shall (i) as promptly as is practicable after the date a completed and signed Notice and Questionnaire and such other information as the Company may reasonably request is delivered to the Company by such holder, and in any event within five Business Days after such date, prepare and file with the Commission (x) a supplement to the Prospectus or, if required by applicable law regulation or decision of the staff of the Commission, a post-effective amendment to the Shelf Registration Statement, provided, however, that if and when requested by the Holders of the Preferred Shares, each underwritten offering of Common Shares and/or Convertible Common Shares shall be for not less than $50,000,000, and provided further that the Company will not be required to prepare and file with the Commission a prospectus supplement with respect to an underwritten offering of Common Shares or Convertible Common Shares of under such Shelf Registration Statement, more frequently than twice in any 12-month period, and (y) any other document required by applicable law, so that the Holder delivering such Notice and Questionnaire is named as a selling security holder in the Shelf Registration Statement and is permitted to deliver the Prospectus to purchasers of such Holder's Registrable Securities in accordance with applicable law, and (ii) use their reasonable best efforts to cause any such post-effective amendment to become effective under the Securities Act as promptly as is practicable; provided, however, that if a Notice and Questionnaire is delivered to the Company during a Blackout Event, the Company shall not be obligated to take the actions set forth in clauses (i) and (ii) until the termination of such Blackout Event. No Holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or any Company Registration Statement as provided in Section 2(b) or to use the Prospectus forming a part thereof for resales of Registrable Securities unless such Holder has complied with the foregoing requirements and has provided the information as requested by the Company in accordance with this Agreement for such Holder to be named as a selling securityholder in the Shelf Registration Statement (any such named Holder, a "Selling Holder"). (iii) The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective under the Securities Act in order to permit the Prospectus forming a part thereof to be usable, subject to Section 2(a)(iv) hereof, by all Selling Holders until the earliest of (i) the second anniversary of the Initial Placement, (ii) the date on which all the Registrable Securities may be sold by non-affiliates ("affiliates" for such purpose having the meaning set forth in Rule 144 under the Act) of the Company 4 pursuant to paragraph (k) of Rule 144 (or any successor provision) promulgated by the Commission under the Securities Act, (iii) the date as of which all the Registrable Securities have been transferred pursuant to Rule 144 under the Securities Act (or any similar provision then in force) and (iv) such date as of which all the Registrable Securities have been sold pursuant to the Shelf Registration Statement (in any such case, such period being called the "Shelf Registration Period"). The Company will, (x) subject to Section 2(a)(iv), prepare and file with the Commission such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary to keep the Shelf Registration Statement continuously effective for the Shelf Registration Period, (y) subject to Section 2(a)(iv), cause the related Prospectus to be supplemented by any required supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act and (z) comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by the Shelf Registration Statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented. (iv) If, in the reasonable good faith judgment of the Company, any pending bankruptcy or insolvency, pending material merger, acquisition, corporate reorganization, other material transaction or other event or circumstance involving the Company or any of its affiliates makes it imprudent for the Company to file a registration statement or to be in registration (any such event, circumstance or transaction, a "Blackout Event"), the Company shall not be obligated to effect (whether by filing a registration statement, seeking effectiveness of a registration statement or otherwise) any registration requested by Holders or affiliate thereof. If the Company determines that a Blackout Event exists, any sale of securities by any Holder or any affiliate thereof, shall be postponed until the Blackout Event no longer exists, provided, however, that no such postponement shall exceed 90 days. The Company may suspend the use of the Prospectus for the duration of any Blackout Event. (v) Underwriting. If the any of the Holders intend to distribute the Registrable Securities by means of an underwriting, they shall so advise the Company as part of their request made pursuant to Section 2(a)(i). (b) Company Registration Statement. (i) If the Company shall determine to register any of its Common Shares either for its own account or for the account of any other shareholder (each such instance, a "Company Registration Statement" and the period during which such Company Registration Statement is effective, the "Company Registration Period"), other than a registration relating solely to employee benefit plans, or a registration relating solely to a Rule 145 transaction under the Securities Act, or a registration on any registration form which does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities, the Company will: (1) promptly give to each of the Holders a written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and 5 (2) include in such Company Registration Statement (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, the Registrable Securities specified in a written request or requests made by the Holders within 15 days after receipt of the written notice from the Company described in clause (1) above, except as set forth in Section 2(b)(ii) below. Such written request may specify all or a part of the Holders' Registrable Securities. Each Holder wishing to sell Registrable Securities pursuant to the Company Registration Statement and related Prospectus agrees to deliver to the Company the Notice and Questionnaire, together with such information as the Company shall reasonably request, to the Company at least five business days prior to the effectiveness of the Company Shelf Registration Statement. Upon the delivery of the Notice and Questionnaire, and such other information as the Company shall reasonably request, to the Company, such Holder shall be deemed a Selling Holder. In the event any Holder requests inclusion in a Company Registration Statement pursuant to this Section 2(b) in connection with a distribution of Registrable Securities to its partners, the Company Registration Statement shall provide for the resale by such partners, if requested by such Holder. (ii) Underwriting. If the Company Registration Statement of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise each of the Holders as a part of the written notice given pursuant to Section 2(b)(i)(1) above. In such event, the right of each of the Holders to registration pursuant to this Section 2(b) shall be conditioned upon such Holders' participation in such underwriting and the inclusion of such Holders' Registrable Securities in the underwriting to the extent provided herein. The Holders whose shares are to be included in such registration shall (together with the Company and the other stockholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for underwriting by the Company. Notwithstanding any other provision of this Section 2(b), if the underwriter or underwriters determine that marketing factors require a limitation on the number of shares to be underwritten, the underwriter may limit the number of Registrable Securities to be included in the registration and underwriting pursuant to Section 2(d)(xviii). (c) Expenses of Registration. All Registration Expenses incurred in connection with any Shelf Registration Statement or Company Registration Statement, qualification or compliance pursuant to this Section 2 shall be borne by the Company, and all Selling Expenses shall be borne by the Selling Holders. (d) Registration Procedures. In connection with the Shelf Registration Statement or Company Registration Statement, the following provisions shall apply, as applicable: 6 (i) The Company shall: (1) furnish to the Selling Holders, prior to the filing thereof with the Commission, a copy of the Shelf Registration Statement or Company Registration Statement, and each amendment thereof, and a copy of any Prospectus, and each amendment or supplement thereto (excluding amendments caused by the filing of a report under the Exchange Act), and shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as the Selling Holders reasonably and promptly propose; and (2) include information regarding the Selling Holders and the methods of distribution they have designated for their Registrable Securities provided to the Company in Notice and Questionnaires as necessary to permit such distribution by the methods specified therein. (ii) Subject to Section 2(a)(iv), the Company shall ensure that (i) each of the Shelf Registration Statement and Company Registration Statement and any amendment thereto and any Prospectus forming a part thereof and any amendment or supplement thereto comply in all material respects with the Securities Act and the rules and regulations thereunder, (ii) each of the Shelf Registration Statement or Company Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming a part of the Shelf Registration Statement or Company Registration Statement, and any amendment or supplement to such Prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the Company makes no representation with respect to information with respect to any underwriter or any Holder required to be included in the Shelf Registration Statement or Company Registration Statement or Prospectus pursuant to the Securities Act or the rules and regulations thereunder and which information is included therein in reliance upon and in conformity with information furnished to the Company in writing by such underwriter or Holder. (iii) The Company, as promptly as reasonably practicable, shall advise the Selling Holders: (1) when the Shelf Registration Statement or Company Registration Statement and any amendment thereto has been filed with the Commission and when the Shelf Registration Statement or any post-effective amendment thereto has become effective; (2) of any request by the Commission following effectiveness of the Shelf Registration Statement or Company Registration Statement for amendments or supplements to the Shelf Registration Statement or Company Registration Statement or the Prospectus or for additional information (other than any such request relating to a review of the Company's Exchange Act filings); 7 (3) of the determination by the Company that a post-effective amendment to the Shelf Registration Statement or Company Registration Statement would be appropriate; (4) of the commencement or termination of (but not the nature of or details concerning) any Blackout Event; (5) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or Company Registration Statement or the initiation of any proceedings for that purpose; (6) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities included in the Shelf Registration Statement or Company Registration Statement for sale in any jurisdiction or the initiation or threat of any proceeding for such purpose; (7) of the happening of (but not the nature of or details concerning) any event that requires the making of any changes in the Shelf Registration Statement or Company Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and the Shelf Registration Statement, Company Registration Statement or the Prospectus, as the case may be, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading; and (8) of the Company's suspension of the use of the Prospectus as a result of any of the events or circumstances described in paragraphs (2) through (7) above, and of the termination of any such suspension. (iv) The Company shall use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statement or Company Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for offer or sale in any jurisdiction at the earliest possible time. (v) The Company shall promptly furnish to each Selling Holder, without charge, at least one copy of the Shelf Registration Statement or Company Registration Statement and any post-effective amendment thereto, including all exhibits (including those incorporated by reference), financial statements and schedules. 8 (vi) The Company shall, during the Shelf Registration Period or Company Registration Period, promptly deliver to each Selling Holder and any sales or placement agent or underwriters acting on their behalf, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in the Shelf Registration Statement or Company Registration Statement (excluding documents incorporated by reference), and any amendment or supplement thereto, as such person may reasonably request; and, except as provided in Sections 2(a)(iv) and 2(d)(xvi) hereof, the Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto during the Shelf Registration Period or Company Registration Period. (vii) Prior to any offering of Registrable Securities pursuant to the Shelf Registration Statement or the Company Registration Statement, the Company shall cooperate with the Selling Holders and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale, under the securities or blue sky laws of such jurisdictions within the United States as any such Selling Holder reasonably request and shall maintain such qualification in effect so long as required and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Registrable Securities covered by such Shelf Registration Statement or Company Registration Statement; provided, however, that the Company will not be required to (A) qualify generally to do business as a foreign corporation or as a dealer in securities in any jurisdiction where it is not then so qualified or to (B) take any action which would subject it to service of process or taxation in any such jurisdiction where it is not then so subject. (viii) The Company shall cooperate with the Selling Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold pursuant to the Shelf Registration Statement or Company Registration Statement free of any restrictive legends and registered in such names as Selling Holders may request. (ix) Subject to the exceptions contained in (A) and (B) of Section 2(d)(vii) hereof, the Company shall use its reasonable best efforts to cause the Registrable Securities covered by the Shelf Registration Statement or Company Registration Statement to be registered with or approved by such other federal, state and local governmental agencies or authorities, and self-regulatory organizations in the United States as may be necessary to enable the Holders to consummate the disposition of such Registrable Securities as contemplated by the Shelf Registration Statement or the Company Registration Statement; without limitation to the foregoing, the Company shall make all filings and provide all such information as may be required by the National Association of Securities Dealers, Inc. (the "NASD") in connection with the offering under the Shelf Registration Statement or the Company Registration Statement of the Transfer Restricted Securities (including, without limitation, such as may be required by NASD Rule 2710 or 2720), and shall cooperate with each Holder in connection with any filings required to be made with the NASD by such Holder in that regard. 9 (x) Upon the occurrence of any event described in Section 2(d)(iii) hereof, the Company shall as soon as reasonably practicable prepare and file with the Commission a post-effective amendment to the Shelf Registration Statement or Company Registration Statement or an amendment or supplement to the related Prospectus or any document incorporated therein by reference or file a document which is incorporated or deemed to be incorporated by reference in such Shelf Registration Statement or Prospectus, as the case may be, so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Shelf Registration Statement or Company Registration Statement and the Prospectus, in each case as then amended or supplemented, will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus in light of the circumstances under which they were made) not misleading and, in the case of a post-effective amendment, use its reasonable best efforts to cause it to become effective as promptly as practicable; provided that the Company's obligations under this paragraph (x) shall be suspended if the Company has suspended the use of the Prospectus in accordance with Section 2(a)(iv) hereof and given notice of such suspension to Selling Holders, it being understood that the Company's obligations under this Section 2(d)(x) shall be automatically reinstated at the end of such Blackout Event. (xi) The Company shall use its best efforts to comply with all applicable rules and regulations of the Commission and shall make generally available to its Holders as soon as practicable but in any event not later than 50 days after the end of a 12-month period (or 105 days, if such period is a fiscal year) after (i) the effective date of the Shelf Registration Statement or Company Registration Statement, (ii) the effective date of each post-effective amendment to the Shelf Registration Statement or Company Registration Statement, and (iii) the date of each filing by the Company with the Commission of an Annual Report on Form 10-K that is incorporated by reference or deemed to be incorporated by reference in the Shelf Registration Statement or Company Registration Statement, an earnings statement satisfying the provisions of Section 11(a) of the Act and Rule 158 promulgated by the Commission thereunder. (xii) Upon request of the Majority Holders, the Company shall cause all Registrable Securities issued (or, in the case of Common Shares, issuable upon conversion of the Preferred Shares or the Convertible Common Shares into which the Preferred Shares may be exchanged for) to be listed on each securities exchange or quotation system on which the Common Shares are then listed no later than the date the Shelf Registration Statement or the Company Registration Statement is declared effective and, in connection therewith, to make such filings as may be required under the Exchange Act and to have such filings declared effective as and when required thereunder. (xiii) The Company may require each Holder of Registrable Securities to be sold pursuant to the Shelf Registration Statement or Company Registration Statement to furnish to the Company such information regarding the Holder and the distribution of such Registrable Securities sought by the Notice and Questionnaire and such additional information as may, from time to time, be required by the Securities Act and the rules and regulations promulgated thereunder, and the obligations of the Company to any Holder hereunder shall be expressly conditioned on the compliance of such Holder with such request. 10 (xiv) The Company, subject to the provisions of paragraph (xviii) of this Section 2(d), shall enter into such customary agreements (including underwriting agreements) and take all other appropriate actions as may be reasonably requested in order to expedite or facilitate the registration or the disposition of the Registrable Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification and contribution provisions and procedures no less favorable than those set forth in Section 5. The plan of distribution in the Shelf Registration Statement or the Company Registration Statement and the Prospectus included therein shall permit resales of Registrable Securities to be made by selling security holders through underwriters, brokers and dealers, and shall also include such other information as the Selling Holders may reasonably request. (xv) In connection with an underwritten offering, if any, the Company shall, if reasonably requested in writing by Majority Holders: (1) make reasonably available for inspection during normal business hours by any underwriter participating in any disposition pursuant to such Shelf Registration Statement or Company Registration Statement, and any attorney, accountant or other agent retained by any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and their subsidiaries as is customary for due diligence examinations in connection with public offerings; provided, however, if the foregoing inspection would otherwise disrupt the Company's conduct of its business, such inspection shall, to the greatest extent practicable, be coordinated by the underwriters on behalf of the other parties; (2) cause the Company's officers, directors, employees, accountants and auditors to supply, during normal business hours, all relevant information reasonably requested by any such underwriter, attorney, accountant or agent in connection with any such Shelf Registration Statement or Company Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such underwriter, attorney, accountant or agent, unless disclosure thereof is made in connection with a court, administrative or regulatory proceeding or required by law, or such information has become available to the public generally through the Company or through a third party without an accompanying obligation of confidentiality; provided, further, that if the foregoing information gathering would otherwise disrupt the Company's conduct of its business, such information gathering shall, to the greatest extent practicable, be coordinated by the underwriters on behalf of the other parties; (3) deliver a letter, addressed to the Selling Holders and the underwriters, if any, in which the Company shall make such representations and warranties in form, substance and scope as are customarily made by issuers to underwriters; 11 (4) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the underwriters, if any) addressed to each Selling Holder and the underwriters, if any, covering such matters as are customarily covered in opinions requested in public offerings; (5) obtain "cold comfort" letters and updates thereof from the current and former independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Shelf Registration Statement or Company Registration Statement), addressed to each Selling Holder (provided such Holder furnishes the accountants, prior to the date such "cold comfort" letter is required to be delivered, with such representations as the accountants customarily require in similar situations) and the underwriters, if any, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings; and (6) deliver such documents and certificates as may be reasonably requested by the Selling Holders or, in the case of an underwritten offering, the underwriters, if any, including those to evidence compliance with Section 2(d)(x) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The foregoing actions set forth in clauses (3), (4), (5) and (6) of this Section 2(d)(xv) shall be performed at (A) the effectiveness of such Shelf Registration Statement or Company Registration Statement and each post-effective amendment thereto and (B) the closing under any underwriting or similar agreement as and to the extent required thereunder. If any of the Registrable Securities covered by the Shelf Registration Statement or Company Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage each such offering will be selected by the Majority Holders of such Registrable Securities included in such offering and shall be reasonably acceptable to the Company. No Holder of Registrable Securities may participate in any underwritten offering unless such Holder (a) agrees to sell such Holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting arrangements and other documents required under the terms of such underwriting agreements. The Holders of Registrable Securities that participate in an underwritten offering shall be required to pay on a ratable basis all registration expenses associated with or arising as a result of the underwritten offering, payable by such Holders pursuant to Section 2 hereof. 12 (xvi) Each Selling Holder agrees that, upon receipt of notice of the happening of an event described in Sections 2(d)(iii)(2) through and including 2(d)(iii)(7), each Holder shall forthwith discontinue (and shall cause its agents and representatives to discontinue) disposition of Registrable Securities and will not resume disposition of Registrable Securities until such Selling Holder has received copies of an amended or supplemented Prospectus contemplated by Section 2(d)(x) hereof, or until such Selling Holder is advised in writing by the Company that the use of the Prospectus may be resumed or that the relevant Blackout Event has been terminated, as the case may be; provided that the foregoing shall not prevent the sale, transfer or other disposition of Registrable Securities by a Selling Holder in a transaction which is exempt from, or not subject to, the registration requirements of the Securities Act, so long as such Selling Holder does not and is not required to deliver the applicable Prospectus or the Shelf Registration Statement or Company Registration Statement in connection with such sale, transfer or other disposition, as the case may be; and provided, further, that the provisions of this Section 2(d)(xvi) shall not prevent the occurrence of a registration default. (xvii) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the NASD Rules) thereof, whether as a Holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company shall assist such broker-dealer in complying with the NASD Rules, including, without limitation, by: (1) if the NASD Rules shall so require, engaging a "qualified independent underwriter" (as defined in the NASD Rules) to participate in the preparation of the Shelf Registration Statement or Company Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by the Shelf Registration Statement or Company Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the price of such Registrable Securities; (2) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 3 hereof; and (3) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the NASD Rules. (xviii) Anything herein to the contrary notwithstanding, the Company will not be required to pay the costs and expenses of, or to participate in the marketing or "road show" presentations of, or agree to indemnification or contribution agreements with respect to, more than two underwritten offerings initiated at the request of the Majority Holders, or to effect more than two underwritten offerings at the request of such Holders. The Company will not be required to pay the costs and expenses of, or to participate in the marketing or "road show" presentations of, an underwritten offering unless the Majority 13 Holders have requested that such Registrable Securities be included in such an underwritten offering. Upon receipt by the Company, from the Majority Holders of a request for an underwritten offering, the Company will, within 10 days thereafter, cause the Company to mail notice to all Holders of Registrable Securities stating that: (i) the Company has received a request from the Holders of the requisite amount of Registrable Securities to effect an underwritten offering on behalf of such Holders; (ii) under the terms of this Agreement, all Holders of Registrable Securities may include their Registrable Securities in such underwritten offering, subject to the terms and conditions set forth in this Agreement and subject to the right of the underwriters to reduce, in light of market conditions and other similar factors, the aggregate principal amount of Registrable Securities included in such underwritten offering; (iii) all Holders electing to include Registrable Securities in such underwritten offering must notify the Company in writing of such election (the "Election"), and setting forth an address and facsimile number to which such written elections may be sent and the deadline (which shall be 12:00 midnight on the 10th calendar day after such notice is mailed to Holders or, if not a Business Day, the next succeeding Business Day (the "Deadline")) by which such elections must be received by the Company; and (iv) setting forth such other instructions as shall be necessary to enable Holders to include their Registrable Securities in such underwritten offering. No Holder shall be entitled to participate in an underwritten offering unless such Holder notifies the Company of such Election by the Deadline. Notwithstanding anything to the contrary contained herein, if the underwriters for an underwritten offering to be effected pursuant to this Section 2(d)(xviii) advise the Holders of the Registrable Securities to be included in such underwritten offering that, because of the aggregate principal amount of Registrable Securities that such Holders have requested be included in the underwritten offering, the success of the offering would likely be materially adversely affected by the inclusion of all Registrable Securities requested to be included, then the principal amount of Registrable Securities to be offered for the accounts of Holders shall be reduced pro rata, according to the aggregate principal amount of Registrable Securities requested for inclusion by each such Holder, to the extent necessary to reduce the size of the offering to the size recommended by the underwriter. Notwithstanding anything to the contrary contained herein, neither the Company nor any Person, other than a Holder Registrable Securities and only with respect to its Registrable Securities, shall be entitled to include any securities in the underwritten offering. (e) Without the consent of the Majority Holders, the Company will not grant rights to any other person with respect to the registration under the Securities Act of the securities of the Company that are pari passu with, or superior in any respect to, those rights granted to the Holders of the Registrable Securities hereunder. SECTION 3. Indemnification. (a) The Company agrees to indemnify and hold harmless each Holder of Registrable Securities covered by the Shelf Registration Statement or Company Registration Statement, the directors, officers, partners, members, employees and agents of each such Holder and each person who controls any such Holder within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) 14 arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration Statement or Company Registration Statement as originally filed or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by any of them in connection with defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to any Holder to the extent that any such loss, claim, damage or liability arises out of or is based upon (A) any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any such Holder specifically for inclusion therein, (B) use of the Shelf Registration Statement or Company Registration Statement or the related Prospectus during a period when use of such Prospectus has been suspended pursuant to Section 2(a)(iv) or Section 2(d)(xvi) hereof; provided, in each case, that Holders received prior notice of such suspension, or (C) if the Holder was required under applicable law to deliver a Prospectus and fails to deliver a Prospectus, as then amended or supplemented, provided that the Company shall have delivered to such Holder such Prospectus, as then amended or supplemented. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Holder of Registrable Securities covered by the Shelf Registration Statement or Company Registration Statement severally and not jointly agrees to indemnify, hold harmless and reimburse (i) the Company, (ii) each of its directors, (iii) each of its officers, and (iv) each person who controls the Company within the meaning of either the Securities Act or the Exchange Act to the same extent as the foregoing indemnity from the Company to each such Holder, but only with reference to written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity; provided that the indemnity to be paid by each respective Holder shall not exceed the net proceeds received by such Holder from the offer and sale of its Registrable Securities. 15 This indemnity agreement shall be in addition to any liability which any such Holder may otherwise have. (c) Promptly after receipt by an indemnified party under this Section 3 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 3, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it was not otherwise notified of such action and such failure results in the forfeiture by the indemnifying party of any rights or defenses. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if: (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would not be permissible under the applicable standards of professional responsibility; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party and that representation of the indemnified party by counsel chosen by the indemnifying party would be inappropriate due to actual or potential differing interests among the parties represented by such counsel; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Neither an indemnifying party nor an indemnified party will, without the prior written consent of the other parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which 16 indemnification or contribution may be sought hereunder (whether or not such other parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of such other parties from all liability arising out of such claim, action, suit or proceeding. An indemnifying party shall not be liable for any losses, claims, damages or liabilities by reason of any settlement of any action or proceeding effected without such indemnifying party's prior written consent, which consent will not be unreasonably withheld. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 3 is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party shall have an obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses"), as incurred, to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from any sales of Registrable Securities under the Shelf Registration Statement or Company Registration Statement. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the Initial Placement of the Registrable Securities pursuant to the Purchase Agreement (before deducting expenses). Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions received in connection with the Initial Placement of the Registrable Securities as set forth in the Purchase Agreement, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Registrable Securities registered under the Securities Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Shelf Registration Statement or the Company Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to whether any untrue statement or omission or alleged untrue statement or omission relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 3(d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 3, each person who controls a Holder within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and 17 agent of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, each officer of the Company who signed the Shelf Registration Statement or Company Registration Statement and each director of the Company shall have the same rights to contribution as the Company, and each person who controls an underwriter within the meaning of either the Securities Act or the Exchange Act and each officer and director of each underwriter shall have the same rights to contribution as such underwriter, subject in each case to the applicable terms and conditions of this Section 3 (d). (e) The provisions of this Section 3 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder, any underwriter, the Company, or any of the officers, directors or controlling persons referred to in Section 3 hereof, and will survive the sale by a Holder of Registrable Securities covered by the Shelf Registration Statement or Company Registration Statement. SECTION 4. MISCELLANEOUS (a) No Inconsistent Agreements. The Company has not, as of the date hereof, entered into nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Majority Holders; provided that with respect to any matter that directly or indirectly affects the exclusive rights of the Initial Purchasers hereunder, the Company shall obtain the written consent of each of the Initial Purchasers against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Registrable Securities are being sold pursuant to the Shelf Registration Statement or Company Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of the Registrable Securities being sold rather than registered under such Shelf Registration Statement or Company Registration Statement. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier, or air courier guaranteeing overnight delivery: (i) if to the Initial Purchasers, initially at its address set forth in the Purchase Agreement; (ii) if to any other Holder, at the most current address of such Holder maintained by the transfer agent for the Preferred Shares, Common Shares or Convertible Common Shares, or, in the case of the Selling Holder, the address set for in its Notice and Questionnaire; and 18 (iii) if to the Company, initially at the Company's address set forth in the Purchase Agreement. All such notices and communications shall be deemed to have been duly given when received, if delivered by hand or air courier, and when sent, if sent by first-class mail or telecopier. The Initial Purchasers or the Company by notice to the other may designate additional or different addresses for subsequent notices or communications. (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company thereto, subsequent Holders. The Company hereby agrees to extend the benefits of this Agreement to any Holder and underwriter and any such Holder and underwriter may specifically enforce the provisions of this Agreement as if an original party hereto. (e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. (h) Severability. In the event that any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. (i) Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Preferred Shares, or the Common Shares or Convertible Common Shares issuable upon conversion of the Preferred Shares, is required hereunder, Preferred Shares, or Common Shares or Convertible Common Shares issued upon conversion of the Preferred Shares, held by the Company or its affiliates (other than subsequent Holders of Preferred Shares, or the Common Shares or Convertible Common Shares issued upon conversion of the Preferred Shares, if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 19 (j) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Shelf Registration Period or Company Registration Period, as applicable, except for any liabilities or obligations under Sections 2(a)(iv), 2(c) or 3 to the extent arising prior to the end of such Shelf Registration Period or Company Registration Period. [signature page follows] 20 IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. PXRE GROUP LTD. By: /s/Robert P. Myron -------------------------------------------- Name: Robert P. Myron Title: Senior Vice President and Treasurer IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. ANCHORAGE CAPITAL MASTER OFFSHORE, LTD. By: Anchorage Advisors, L.L.C., its advisor By: Anchorage Advisors Management, L.L.C., its Managing Member By: /s/Anthony Davis ------------------------------------- Name: Anthony Davis Title: Managing Member IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. TONGA PARTNERS, L.P. By: Cannell Capital LLC, as investment advisor By: /s/Carlo Cannell --------------------------- Name: Carlo Cannell Title: Managing Member ANEGADA MASTER FUND, LTD. By: Cannell Capital LLC, as investment advisor By: /s/Carlo Cannell --------------------------- Name: Carlo Cannell Title: Managing Member IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. CapZ PXRE HOLDINGS, LLC By: Capital Z Financial Services Fund II, L.P., its Managing Member By: Capital Z Partners, Ltd., its ultimate general partner By: /s/Craig Fisher ----------------------------------- Name: Craig Fisher Title: General Counsel CapZ PXRE HOLDINGS PRIVATE, LLC By: Capital Z Financial Services Private Fund II, L.P., its Managing Member By:Capital Z Partners, Ltd., its ultimate general partner By: /s/Craig Fisher ------------------------------------ Name: Craig Fisher Title: General Counsel IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. D.E. SHAW INVESTMENT GROUP, L.L.C. By: D.E. Shaw & Co., L.P., as managing member By: /s/ Max Stone ------------------------------ Name: Max Stone Title: Managing Director IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. D.E. SHAW VALENCE PORTFOLIOS, L.L.C. By: D.E. Shaw & Co., L.P., as managing member By: /s/Max Stone ------------------------------- Name: Max Stone Title: Managing Director IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. ENDICOTT PARTNERS, L.P. By: Endicott Management Company, its investment advisor By: /s/ Robert I. Usdan ------------------------------- Name: Robert I. Usdan Title: Co-President ENDICOTT PARTNERS II, L.P. By: Endicott Management Company, its investment advisor By: /s/ Robert I. Usdan ------------------------------- Name: Robert I. Usdan Title: Co-President ENDICOTT OFFSHORE INVESTORS, LTD. By: Endicott Management Company, its investment advisor By: /s/ Robert I. Usdan ------------------------------- Name: Robert I. Usdan Title: Co-President IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. ENGINEERS JOINT PENSION PLAN & TRUST By: Endicott Management Company, its investment advisor By: /s/ Robert I. Usdan ----------------------------- Name: Robert I. Usdan Title: Co-President INTERNATIONAL BANCSHARES CORPORATION EMPLOYEES PROFIT SHARING PLAN & TRUST By: Endicott Management Company, its investment advisor By: /s/ Robert I. Usdan ----------------------------- Name: Robert I. Usdan Title: Co-President EHL ENDICOTT LIMITED By: Endicott Portfolio Management, LLC, its investment advisor By: /s/ Robert I. Usdan ----------------------------- Name: Robert I. Usdan Title: Managing Member IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. ETON PARK MASTER FUND, LIMITED By: Eton Park Capital Management, L.P., its investment advisor By: /s/ Eric Mindich -------------------------------- Name: Eric Mindich Title: ETON PARK FUND, L.P. By: Eton Park Capital Management, L.P., its investment advisor By: /s/ Eric Mindich -------------------------------- Name: Eric Mindich Title: IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. OZ MASTER FUND, LTD. By: OZ Management, LLC, its investment advisor By: /s/Dan Och ------------------------------ Name: Dan Och Title: Senior Managing Member IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. PERRY PARTNERS, L.P. By: Perry Capital, L.L.C., as investment advisor By: /s/ Michael C. Neus --------------------------------- Name: Michael C. Neus Title: General Counsel PERRY PARTNERS, INTERNATIONAL, INC. By: Perry Capital, L.L.C., as investment advisor By: /s/ Michael C. Neus --------------------------------- Name: Michael C. Neus Title: General Counsel IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. RESERVOIR CAPITAL PARTNERS, L.P. By: Reservoir Capital Group, L.L.C., its general partner By: /s/ Craig Huff ------------------------------- Name: Craig Huff Title: President RESERVOIR CAPITAL INVESTMENT PARTNERS, L.P. By: Reservoir Capital Group, L.L.C., its general partner By: /s/ Craig Huff ------------------------------- Name: Craig Huff Title: President RESERVOIR CAPITAL MASTER FUND, L.P. By: Reservoir Capital Group, L.L.C., its general partner By: /s/ Craig Huff ------------------------------- Name: Craig Huff Title: President RESERVOIR CAPITAL MASTER FUND II,, L.P. By: Reservoir Capital Group, L.L.C., its general partner By: /s/ Craig Huff ------------------------------- Name: Craig Huff Title: President IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. ROYAL CAPITAL VALUE FUND, LP By: Royal Capital Management, LLC, its investment advisor By: /s/ Yale M. Fergang --------------------------- Name: Yale M. Fergang Title: Managing Member ROYAL CAPITAL VALUE FUND (QP), LP By: Royal Capital Management, LLC, its investment advisor By: /s/ Yale M. Fergang --------------------------- Name: Yale M. Fergang Title: Managing Member ROYALCAP VALUE FUND, LTD. By: Royal Capital Management, LLC, its investment advisor By: /s/ Yale M. Fergang --------------------------- Name: Yale M. Fergang Title: Managing Member SENECA CAPITAL, LP By: Royal Capital Management, LLC, its investment advisor By: /s/ Yale M. Fergang --------------------------- Name: Yale M. Fergang Title: Managing Member IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. SAB CAPITAL PARTNERS, L.P. By: SAB Capital Advisors, L.L.C., its general partner By: /s/ Brian Jackelow ---------------------------------- Name: Brian Jackelow Title: Chief Financial Officer SAB CAPITAL PARTNERS II, L.P. By: SAB Capital Advisors, L.L.C., its general partner By: /s/ Brian Jackelow ---------------------------------- Name: Brian Jackelow Title: Chief Financial Officer SAB OVERSEAS MASTER FUND, L.P. By: SAB Capital Advisors, L.L.C., its general partner By: /s/ Brian Jackelow ---------------------------------- Name: Brian Jackelow Title: Chief Financial Officer IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. SCOPIA PARTNERS LLC By: Scopia Management, Inc., its investment manager By: /s/ Matthew Sirovich ---------------------------------- Name: Matthew Sirovich Title: Executive Vice President SCOPIA PARTNERS QP LLC By: Scopia Management, Inc., its investment manager By: /s/ Matthew Sirovich ---------------------------------- Name: Matthew Sirovich Title: Executive Vice President SCOPIA PX LLC By: Scopia Management, Inc., its investment manager By: /s/ Matthew Sirovich ---------------------------------- Name: Matthew Sirovich Title: Executive Vice President SCOPIA LONG LLC By: Scopia Management, Inc., its investment manager By: /s/ Matthew Sirovich ---------------------------------- Name: Matthew Sirovich Title: Executive Vice President IN WITNESS WHEREOF, the undersigned has executed this Registration Rights Agreement as of the date first above written. SCOPIA INTERNATIONAL LIMITED By: Scopia Management, Inc., its investment manager By: /s/ Matthew Sirovich --------------------------------- Name: Matthew Sirovich Title: Executive Vice President SCOPIA PX INTERNATIONAL LIMITED By: Scopia Management, Inc., its investment manager By: /s/ Matthew Sirovich --------------------------------- Name: Matthew Sirovich Title: Executive Vice President THE COAST FUND L.P. By: Scopia Management, Inc., its investment manager By: /s/ Matthew Sirovich --------------------------------- Name: Matthew Sirovich Title: Executive Vice President EXHIBIT A FORM OF SELLING SECURITY HOLDER NOTICE AND QUESTIONNAIRE The undersigned beneficial holder of Series D Perpetual Preferred Shares (the "Preferred Shares"), par value $1.00 per share, of PXRE Group Ltd. ("PXRE" or the "Company") or common shares, par value $1.00 per share, of the Company issuable upon conversion of the Preferred Shares (together with the Preferred Shares, the "Registrable Securities") of the Company understands that the Company has filed or intends to file with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Registrable Securities in accordance with the terms of the Registration Rights Agreement (the "Registration Rights Agreement") dated as of October 7, 2005 between the Company and the initial purchasers named therein. The Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Registration Rights Agreement. Each beneficial owner of Registrable Securities is entitled to the benefits of the Registration Rights Agreement. In order to sell or otherwise dispose of any Registrable Securities pursuant to the Shelf Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a selling securityholder in the related prospectus, deliver a prospectus to purchasers of Registrable Securities and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification provisions as described below). Beneficial owners that do not complete this Notice and Questionnaire and deliver it to the Company as provided below will not be named as selling securityholders in the prospectus and therefore will not be permitted to sell any Registrable Securities pursuant to the Shelf Registration Statement. Beneficial owners are encouraged to complete and deliver this Notice and Questionnaire prior to the effectiveness of the Shelf Registration Statement so that such beneficial owners may be named as selling securityholders in the related prospectus at the time of effectiveness. Upon receipt of a completed Notice and Questionnaire from a beneficial owner following the effectiveness of the Shelf Registration Statement, the Company will, as promptly as practicable but in any event within five business days of such receipt, file such amendments to the Shelf Registration Statement or supplements to the related prospectus as are necessary to permit such holder to deliver such prospectus to purchasers of Registrable Securities. Certain legal consequences may arise from being named as selling securityholders in the Shelf Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and the related prospectus. NOTICE The undersigned beneficial owner (the "Selling Securityholder") of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities beneficially owned by it and listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands that it will be bound by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement. The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: QUESTIONNAIRE 1. (a) Full Legal Name of Selling Securityholder: ___________________________________________________________________________ (b) Full legal name of Registered Holder (if not the same as (a) above) through which Registrable Securities listed in (3) below are held: ___________________________________________________________________________ (c) Full legal name of broker-dealer or other third party through which Registrable Securities listed in (3) below are held: ___________________________________________________________________________ (d) Full legal name of DTC Participant (if applicable and if not the same as (b) or (c) above) through which Registrable Securities listed in (3) below are held: ___________________________________________________________________________ 2. Address for Notices to Selling Securityholder: ___________________________________________________________________________ ___________________________________________________________________________ Telephone:_________________________________________________________________ Fax: _________________________________________________________________ Contact Person ____________________________________________________________ 3. Beneficial Ownership of Registrable Securities: Type and Principal Amount of Registrable Securities beneficially owned: ___________________________________________________________________________ ___________________________________________________________________________ Unless otherwise indicated in the space provided below, all Registrable Securities listed in response to this Item (3) as listed above will be included in the Shelf Registration Statement. If the undersigned does not wish all such Registrable Securities to be so included, please indicate below the amount of Registrable Securities to be included: ___________________________________________________________________________ ___________________________________________________________________________ 4. Beneficial Ownership of Company securities owned by the Selling Securityholder: Except as set forth below in this Item (4), the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item (3). Type and amount of other securities beneficially owned by the Selling Securityholder (include CUSIP No(s). if applicable): ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. Relationship with the Company: Except as set forth below, neither the undersigned nor any of its affiliates, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. State any exceptions here: ___________________________________________________________________________ ___________________________________________________________________________ 6. Plan of Distribution: Except as set forth below, the undersigned (including its donees or pledgees) intends to distribute the Registrable Securities listed above in Item (3) pursuant to the Shelf Registration Statement only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned or alternatively through underwriters or broker-dealers or agents. If the Registrable Securities are sold through underwriters or broker-dealers or agents, the Selling Securityholder will be responsible for underwriting discounts or commissions or agent's commissions. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the undersigned may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities, short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities. The Selling Securityholder may pledge or grant a security interest in some or all of the Registrable Securities owned by it and, if it defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell the Registrable Securities from time to time pursuant to the prospectus. The Selling Securityholder also may transfer and donate shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling securityholder for purposes of the prospectus. State any exceptions here: ___________________________________________________________________________ ___________________________________________________________________________ Note: In no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company. The undersigned acknowledges that it understands its obligation to comply with the provisions of the Securities Exchange Act of 1934, as amended, and the rules thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor rules or regulations) and the provisions of the Securities Act of 1933, as amended, relating to prospectus delivery, in connection with any offering of Registrable Securities pursuant to the Shelf Registration Statement. The undersigned agrees that neither it nor any person acting on its behalf will engage in any transaction in violation of such provisions. The Selling Securityholder hereby acknowledges its obligations under the Registration Rights Agreement to indemnify and hold harmless certain persons set forth therein. Pursuant to the Registration Rights Agreement, the Company has agreed under certain circumstances to indemnify the Selling Securityholders against liabilities. In accordance with the undersigned's obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below. In the event any Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item 3 above after the date on which such information is provided to the Company, the Selling Securityholder will notify the transferee(s) at the time of transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement. By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company without independent investigation or inquiry in connection with the preparation or amendment of the Shelf Registration Statement and the related prospectus. IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its authorized agent. Beneficial Owner By: _______________________________ Name: Title: Dated: PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO PXRE Corporation PXRE House 110 Pitts Bay Road Pembroke HM 08 Bermuda Facsimile No.: (441) 296-6162 Attn: Jeffrey L. Radke EX-4 4 jd10-17ex_1.txt EXHIBIT 4 --------- JOINT FILING AGREEMENT ---------------------- This will confirm the agreement by and among all the undersigned that the Schedule 13D filed on or about this date with respect to the beneficial ownership of the undersigned of shares of common stock, par value $1.00 per share, of PXRE Group Ltd. is being filed on behalf of each of the undersigned. This agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Dated: October 17, 2005 CAPITAL Z FINANCIAL SERVICES FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher -------------------------------------------------------- Craig Fisher General Counsel CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher -------------------------------------------------------- Craig Fisher General Counsel CAPITAL Z PARTNERS, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher -------------------------------------------------------- Craig Fisher General Counsel CAPITAL Z PARTNERS, LTD. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher -------------------------------------------------------- Craig Fisher General Counsel CAPITAL Z MANAGEMENT, LLC. By: /s/ Craig Fisher -------------------------------------------------------- Craig Fisher General Counsel CAPZ PXRE HOLDINGS, LLC By: CAPITAL Z FINANCIAL SERVICES FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher -------------------------------------------------------- Craig Fisher General Counsel CAPZ PXRE HOLDINGS PRIVATE, LLC By: CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P. By: Capital Z Partners, Ltd., it ultimate general partner By: /s/ Craig Fisher -------------------------------------------------------- Craig Fisher General Counsel SCHEDULE I CONTROL PERSONS AND EXECUTIVE OFFICERS OF THE CAPITAL Z REPORTING PERSONS The names, present principal occupations and business addresses of the control persons and executive officers of the Reporting Persons are set forth below. The control person's or executive officer's business address is that of the Reporting Person. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to the Reporting Person. Each of the named individuals is a citizen of the United States of America except for Laurence Cheng who is a citizen of Canada. Capital Z Partners, Ltd. is the ultimate general partner and control person of Capital Z Financial Services Fund II, L.P. and Capital Z Financial Services Private Fund II, L.P. Robert A. Spass Chairman of the Board Laurence W. Cheng Chief Executive Officer and Director Bradley E. Cooper Senior Vice President and Director Mark K. Gormley Senior Vice President and Director Craig Fisher General Counsel Roland V. Bernardon Chief Financial Officer, Treasurer and Assistant Secretary -----END PRIVACY-ENHANCED MESSAGE-----