SEC Form SC 13D filed

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Series A Preference Shares

At the effective time of the Business Combination (the “Effective Time”), the Issuer entered into a certificate of designation for the Series A Preference Shares (the “Series A Certificate of Designation”).  The Series A Preference Shares rank pari passu with the Common Shares with respect to the payment of dividends or distributions.  Each Series A Preference Share has voting power equal to the number of Common Shares into which it is convertible, and the Series A Preference Shares and Common Shares shall vote together as a single class with respect to any and all matters.  Upon the third anniversary of the Effective Time, as described in the Series A Certificate of Designation and pursuant to the analysis of an independent actuarial team, the Issuer will calculate the total amount of TPRE’s COVID-19 losses in excess of $51.1 million (the “TPRE Net COVID Loss”) and the total amount of Sirius’s COVID-19 losses in excess of $150 million (the “Sirius Net COVID Loss”).  If TPRE’s COVID-19 losses are less than or equal to $51.1 million, the TPRE Net COVID Loss will equal $0, and if Sirius’ COVID-19 losses are less than or equal to $150 million, the Sirius Net COVID Loss will equal $0.  Should the Sirius Net COVID Loss be greater than the TPRE Net COVID Loss, then a number of Series A Preference Shares will be forfeited by the holders of Series A Preference Shares (including CM Bermuda) equal to (x) the lesser of (i) the Sirius Net COVID Loss minus the TPRE Net COVID Loss and (ii) $100 million divided by (y) the volume-weighted average price (“VWAP”) of the Common Shares measured over the thirty business day (where normal trading occurs on U.S. national and regional exchanges) (“Trading Day”) period prior to the date five business days after the calculation of the TPRE Net COVID Loss and Sirius Net COVID Loss (the “Final Adjustment Determination Date”).  Should the TPRE Net COVID Loss be greater

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than the Sirius Net COVID Loss, then a number of Series A Preference Shares will be issued to the holders of Series A Preference Shares (including CM Bermuda) equal to (x) the TPRE Net COVID Loss minus the Sirius Net COVID Loss divided by (y) the 30-Trading Day VWAP during the period prior to the Final Adjustment Determination Date.  After either such adjustment occurs, the Series A Preference Shares will convert into Common Shares based on the conversion ratio of one Series A Preference Share to one Common Share, subject to the adjustment as set forth in the Series A Certificate of Designation.

The foregoing summary of the Series A Preference Shares and the Series A Certificate of Designation does not purport to be a complete description and is qualified in its entirety by reference to the Series A Certificate of Designation, which is attached hereto as Exhibit C.

Warrant Agreement

On February 26, 2021, the Issuer entered into a warrant agreement (the “Warrant Agreement”).  Pursuant to the Warrant Agreement, holders of Warrants (including CM Bermuda) may exercise each Warrant to purchase one Common Share for $11.00 per share, subject to adjustment as set forth in the Warrant Agreement.  The Warrants are exercisable at any time after the Effective Time through the fifth anniversary of the Effective Time.  If the Warrants are not exercised prior to the fifth anniversary of the Effective Time, the Warrants will expire without value.

The foregoing summary of the Warrants and the Warrant Agreement does not purport to be a complete description and is qualified in its entirety by reference to the Warrant Agreement, which is attached hereto as Exhibit D.

Upside Rights

At the Effective Time, the Issuer issued Upside Rights.  Pursuant to the Upside Rights, if (i) the last reported sales price of the Common Shares for each of 30 consecutive trading days exceeds the target price of $20.00 (the “Target Price”), subject to adjustment, prior to the first anniversary of the Effective Time, or (ii) the Issuer enters into a definitive agreement to consummate a change of control transaction and the per share consideration in such transaction exceeds the Target Price, the principal amount of the Upside Rights will become immediately due and payable.  Settlement of the Upside Rights will be in a number of Common Shares equal to $100,070,726 divided by the Issuer’s average share price determined using a 30-day VWAP, or in the case of a change of control transaction, the lesser of the per share consideration being offered in such change of control transaction and the Issuer’s average share price determined using a 30-day VWAP.

The foregoing summary of the Upside Rights does not purport to be a complete description and is qualified in its entirety by reference to the written instrument representing the Upside Rights, which is attached hereto as Exhibit E.

At the Effective Time, the Issuer and CM Bermuda entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which CM Bermuda is able to require the Issuer, beginning after the lock-up period described below, to file one or more registration statements with the U.S. Securities and Exchange Commission covering the public resale of Common Shares beneficially owned by CM Bermuda.  The rights of CM Bermuda and its permitted transferees under the Registration Rights Agreement will remain in effect with respect to all Common Shares covered by such agreement until such securities (i) are sold in a private transaction in which the transferor’s rights under the Registration Rights Agreement are not assigned to the transferee, (ii) are sold pursuant to an effective registration statement, (iii) are sold pursuant to Rule 144 or Rule 145 (or any similar provision then in force under the Securities Act of 1933), (iv) may be sold pursuant to Rule 144 without any conditions, (v) with respect to any particular holder, such holder beneficially owns less than 2% of the Common Shares or (vi) shall have ceased to be outstanding.

Demand Registration.  CM Bermuda is able to request an unlimited number of registrations under the Securities Act of 1933 of all or any portion of the Common Shares covered by the Registration Rights Agreement, and the Issuer is obligated, subject to limited exceptions, to register such shares as requested by CM Bermuda.  Subject to certain exceptions, the Issuer may defer the filing of a registration statement after a demand request has been made if, at the time of such request, the Issuer’s board of directors determines that any pending or imminent event would require

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disclosure of material, non-public information in the registration statement for such registration statement not to be materially misleading and would not otherwise be required to be publicly disclosed by the Issuer.  The Issuer is not obligated to effect more than one demand registration in any 60-day period or a demand registration that would reasonably be expected to result in gross cash proceeds of less than $50 million.

Shelf Registration.  At any time after expiration of the applicable lock-up period, the Issuer is obligated, upon request by CM Bermuda, to file a shelf registration statement to register all or any portion of the Common Shares covered by the Registration Rights Agreement.  CM Bermuda may, at any time and from time to time, request that the Issuer complete an unlimited number of shelf take-downs, subject to certain limited exceptions.

Piggy-Back Registration.  If at any time the Issuer intends to file on its behalf or on behalf of any of its other security holders a registration statement in connection with a public offering of any of the Issuer’s securities on a form and in a manner that would permit the registration for offer and sale of the Common Shares held by CM Bermuda, CM Bermuda has the right to include its Common Shares in that offering.  CM Bermuda’s ability to participate in any such offering will be subject to market “cut-back” exceptions.

Registration Procedures; Expenses.  The Issuer is responsible for all registration expenses, including expenses incurred by the Issuer, in connection with the registration, offer and sale of securities under the Registration Rights Agreement by CM Bermuda, except for selling commissions and transfer taxes applicable to such sale.

The Registration Rights Agreement sets forth customary registration procedures, including an agreement by the Issuer to make its management reasonably available to participate in road show presentations in connection with any underwritten offerings.  The Issuer also agrees to indemnify CM Bermuda and its permitted transferees with respect to liabilities resulting from untrue statements or omissions in any registration statement used in any such registration, other than untrue statements or omissions resulting from information furnished to the Issuer for use in a registration statement by CM Bermuda or any permitted transferee.

At the Effective Time, the Issuer and CM Bermuda entered into an Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which CM Bermuda’s and its affiliates’ voting power in the Issuer will be capped at 9.9%, in accordance with the terms described in the Investor Rights Agreement and the Bye-laws of the Issuer, and, for so long as CM Bermuda and its affiliates beneficially own at least 9.9% of the Common Shares, they shall have the right to designate an observer to the Board.  In addition, for so long as CM Bermuda and its affiliates and its related persons beneficially own at least 9.9% of the Common Shares, they will be subject to certain customary standstill restrictions.  CM Bermuda’s board observer right and the standstill restrictions will terminate on the later of the 450th day after the closing of the Business Combination and the date on which CM Bermuda or one of its affiliates or related persons no longer has a representative designated by CM Bermuda or one of its affiliates or related persons serving as a director on the Issuer’s board of directors.

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