Exhibit 1.1
- SHARES
MONTPELIER RE HOLDINGS LTD.
COMMON SHARES, PAR VALUE 1/6 CENT PER SHARE
UNDERWRITING AGREEMENT
June -, 2003
June -, 2003
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Credit Suisse First Boston LLC
as representatives of the Underwriters
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Certain shareholders of Montpelier Re Holdings Ltd., a Bermuda
corporation (the "COMPANY"), named in Schedule I hereto (each a "SELLING
SHAREHOLDER" and collectively, the "SELLING SHAREHOLDERS") severally propose to
sell to the several Underwriters named in Schedule II hereto (the
"UNDERWRITERS") an aggregate of ? of the Company's common shares, par value 1/6
cent per share (the "FIRM SHARES") each Selling Shareholder selling the amount
set forth opposite such Selling Shareholder's name in Schedule I hereto. The
Selling Shareholders also propose to sell to the several Underwriters not more
than an additional ? of the Company's common shares, par value 1/6 cent per
share (the "ADDITIONAL SHARES") if and to the extent that you, as Managers of
the offering, shall have determined to exercise, on behalf of the Underwriters,
the right to purchase such shares of common stock granted to the Underwriters in
Section 2 hereof each Selling Shareholder selling up to the amount set forth
opposite such Selling Shareholder's name in Schedule I hereto. The Firm Shares
and the Additional Shares are hereinafter collectively referred to as the
"SHARES." The common shares, par value 1/6 cent per share of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS".
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
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(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any 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, ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) PricewaterhouseCoopers, whose report is included or
incorporated by reference in the Prospectus, is an independent
certified public accountant with respect to the Company and its
combined subsidiaries within the meaning of the Securities Act and the
rules and regulations adopted by the Commission thereunder. The
financial statements of the Company and its combined subsidiaries
(including the related notes and supporting schedules) included in the
Registration Statement and the Prospectus present fairly in all
material respects the financial condition, results of operations and
cash flows of the entities purported to be shown thereby at the dates
and for the periods indicated and have been prepared in accordance with
United States generally accepted accounting principles applied on a
consistent basis throughout the periods indicated and conform in all
material respects with the rules and regulations adopted by the
Commission under the Securities Act; and the supporting schedules
included in the Registration Statement present fairly in all materials
respects the information required to be stated therein.
(d) The Company has been duly organized or formed and is
validly existing in good standing (including as an exempted company)
under the laws of the jurisdiction of its organization or formation,
with full power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement; and the Company
is duly qualified to do business as described in the Prospectus and is
in good standing in each jurisdiction in which the character of the
business conducted by it or the location of the properties owned,
leased or operated by it make such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its combined subsidiaries, taken as a whole (a "MATERIAL ADVERSE
Effect").
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(e) Montpelier Reinsurance Ltd. ("MONTPELIER RE") and
Montpelier Marketing Services (UK) Ltd. (the "DESIGNATED SUBSIDIARIES")
have been duly organized or formed and are validly existing in good
standing (including, in the case of Montpelier Re, as an exempted
company) under the laws of the jurisdictions of their organization or
formation, with full power and authority to own, lease and operate
their properties and conduct their businesses as described in the
Prospectus; and the Designated Subsidiaries are duly qualified to do
business as described in the Prospectus and are in good standing in
each jurisdiction in which the character of the business conducted by
them or the location of the properties owned, leased or operated by
them make such qualification necessary, except to the extent that the
failure to be so qualified or be in good standing would not have a
Material Adverse Effect. Except for Montpelier Holdings (Barbados) SRL
and Montpelier Enterprises (Barbados) Ltd., both of which are
immaterial and are not "significant subsidiaries" of the Company as
that term is defined in Rule 1-02(x) of Regulation S-X of the rules and
regulations of the Commission under the Securities Act, the Designated
Subsidiaries are the only subsidiaries of the Company.
(f) The capitalization of the Company as of March 31, 2003
conforms in all material respects to the description thereof in the
Prospectus. All of the outstanding common shares of the Company and
each Designated Subsidiary of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. All of the
outstanding common shares of each Designated Subsidiary of the Company
are owned directly or indirectly by the Company free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or
transfer, preemptive rights or any other claim of any third party.
(g) Except as described in or contemplated by the Registration
Statement and the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), since
the respective dates as of which information is given in the Prospectus
(i) there has not been any event or development that has had or would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and (ii) there has not been any material change
in the long-term debt of the Company and its combined subsidiaries
taken as a whole.
(h) None of (i) the execution or delivery hereof by the
Company, (ii) the consummation of the transactions contemplated hereby
or (iii) compliance by the Company with all of the provisions of this
Agreement, (A) will result in a breach or violation of, or constitute a
default under, the memorandum of association, bye-laws or other
governing documents of the Company or any of the Designated
Subsidiaries, (B) will result in a breach or violation of, or
constitute a default under, any agreement, indenture or other
instrument to which the Company or any of the Designated Subsidiaries
is a party or by which any of them is bound, or to which any of their
properties is subject, (C) will result in a violation of any law, rule,
administrative regulation or decree of any court, or any governmental
agency or body having jurisdiction over the Company, the Designated
Subsidiaries or any of their respective properties, or (D) will result
in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company, or any Designated Subsidiary
except (other than with respect to clause (A)), as would not have,
individually or in the
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aggregate, a Material Adverse Effect. Except for permits, consents,
approvals and similar authorizations required by the securities or
"Blue Sky" or insurance securities laws of certain jurisdictions in
connection with the offer and sale of the Shares, the filing of the
Prospectus under the Bermuda Companies Act 1981 in connection with the
offer and sale of the Shares and permits, consents, approvals and
authorizations which have been obtained, no permit, consent, approval,
authorization or order of any court, governmental agency or body or
financial institution is required in connection with the consummation
of the transactions contemplated by this Agreement.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) None of the Company or any of its Designated Subsidiaries
(i) is in violation of its memorandum of association or bye-laws or
articles of association or other governing documents, (ii) is in
default and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
agreement, indenture or other instrument to which it is a party or by
which it is bound or to which any of its properties is subject, except
for any such defaults that would not, individually or in the aggregate,
have a Material Adverse Effect, or (iii) is in violation of any
insurance law or insurance regulation to which it or its property is
subject, except for any such violations that would not, individually or
in the aggregate, have a Material Adverse Effect.
(k) On the date hereof and on the Closing Date, each of the
Company and Montpelier Re is and will be solvent and able to pay its
liabilities as they become due.
(l) The shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding have been duly and
validly authorized and are validly issued, fully paid and
non-assessable. The authorized capital stock of the Company conforms in
all material respects to the description thereof in the Registration
Statement and the Prospectus. Neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any rights, other than those that have
been duly waived or satisfied, for or relating to the registration of
any securities of the Company.
(m) There are no contracts or other documents that are
required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement, as the case may be, that have not been
described in the Prospectus or filed as exhibits to the Registration
Statement, as the case may be.
(n) There is no litigation or governmental proceeding pending
or, to the knowledge of the Company, threatened to which the Company or
any of the Designated Subsidiaries is a party or to which any property
of the Company or any of the Designated Subsidiaries is subject that
could reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect, or which is required to be
disclosed in the Prospectus or the Registration Statement and is not so
disclosed.
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(o) Each of the Company and the Designated Subsidiaries has
(i) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has filed all reports, documents
and other information required to be filed pursuant to the applicable
laws of Bermuda and other relevant jurisdictions as is necessary to
engage in the business currently conducted by it in the manner
described in the Prospectus (each, an "AUTHORIZATION"), except where
the failure, individually or in the aggregate, to file such report,
document or information would not have a Material Adverse Effect, (ii)
fulfilled and performed all obligations necessary to maintain each
Authorization, except where the failure to fulfill or perform such
obligation, individually or in the aggregate, would not have a Material
Adverse Effect and (iii) no knowledge of any threatened action, suit,
proceeding or investigation that would reasonably be expected to result
in the revocation, termination or suspension of any Authorization. All
such Authorizations are valid and in full force and effect and the
Company and the Designated Subsidiaries are in compliance in all
material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto, except where the
failure to comply, individually or in the aggregate, would not have a
Material Adverse Effect. The Company has not received any order or
decree from any insurance regulatory agency or body impairing,
restricting or prohibiting the payment of dividends by any Designated
Subsidiary to its parent.
(p) The Company has no knowledge of any threatened or pending
downgrading of Montpelier Re's claims-paying ability rating by A.M.
Best Company, Inc., or of Montpelier Re's financial strength rating by
Xxxxx'x Investor Service, the only "nationally recognized statistical
rating organizations," as such term is defined for purposes of Rule
463(g)(2) under the Securities Act, which currently has publicly
released a rating of the claims-paying ability or financial strength of
the Company or any Designated Subsidiary. No such organization
currently has publicly released a rating of any securities of the
Company or any Designated Subsidiary.
(q) The Shares have been approved for listing on the New York
Stock Exchange.
(r) The Company and the Designated Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(s) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
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(t) The Company is not required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(u) None of the Underwriters or any subsequent purchasers of
the Shares (other than purchasers resident in Bermuda for Bermuda
exchange control purposes) is subject to any stamp duty, excise or
similar tax imposed in Bermuda in connection with the offering, sale or
purchase of the Shares.
(v) There are no currency exchange control laws or withholding
taxes of Bermuda that would be applicable to the payment of dividends
on the Shares by the Company (other than to residents of Bermuda for
Bermuda exchange control purposes).
2. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations
under, this Agreement, the Custody Agreement signed by such Selling
Shareholder, the Company and EquiServe Trust Company, N.A., as
Custodian, relating to the deposit of the Shares to be sold by such
Selling Shareholder (the "CUSTODY AGREEMENT") and the Power of Attorney
appointing certain individuals as such Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"POWER OF ATTORNEY") will not contravene any provision of law
applicable to such Selling Shareholder, or the certificate of
incorporation or by-laws of such Selling Shareholder (if such Selling
Shareholder is a corporation), or any agreement or other instrument
binding upon such Selling Shareholder or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over such
Selling Shareholder, except for any contraventions of an agreement,
instrument, judgment, order or decree which would not, individually or
in the aggregate, adversely affect such Selling Shareholder's ability
to fulfill its obligations under and consummate the transactions
contemplated by this Agreement, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is
required for the performance by such Selling Shareholder of its
obligations under this Agreement or the Custody Agreement or Power of
Attorney of such Selling Shareholder, except such as may be required
under the Securities Act, pursuant to the rules of the National
Association of Securities Dealers, Inc. or by the securities or Blue
Sky laws of the various states in connection with the offer and sale of
the Shares.
(c) Such Selling Shareholder has, and on the Closing Date will
have, valid title to, or a valid "security entitlement" within the
meaning of Section 8-501 of the New York Uniform Commercial Code in
respect of, the Shares to be sold by such Selling Shareholder free and
clear of all security interests, claims, liens, equities or other
encumbrances and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement and the Power of Attorney
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and to sell, transfer and deliver the Shares to be sold by such Selling
Shareholder or a security entitlement in respect of such Shares.
(d) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by such Selling Shareholder and
are valid and binding agreements of such Selling Shareholder.
(e) Upon payment for the Shares to be sold by such Selling
Shareholder pursuant to this Agreement, delivery of such Shares, as
directed by the Underwriters, to Cede & Co. ("CEDE") or such other
nominee as may be designated by the Depository Trust Company ("DTC"),
registration of such Shares in the name of Cede or such other nominee
and the crediting of such Shares on the books of DTC to securities
accounts of the Underwriters (assuming that neither DTC nor any such
Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code (the "UCC")) to
such Shares), (A) DTC shall be a "protected purchaser" of such Shares
within the meaning of Section 8-303 of the UCC, (B) under Section 8-501
of the UCC, the Underwriters will acquire a valid security entitlement
in respect of such Shares and (C) no action based on any "adverse
claim", within the meaning of Section 8-102 of the UCC, to such Shares
may be asserted against the Underwriters with respect to such security
entitlement; for purposes of this representation, such Selling
Shareholder may assume that when such payment, delivery and crediting
occur, (x) such Shares will have been registered in the name of Cede or
another nominee designated by DTC, in each case on the Company's share
registry in accordance with its certificate of incorporation, bylaws
and applicable law, (y) DTC will be registered as a "clearing
corporation" within the meaning of Section 8-102 of the UCC and (z)
appropriate entries to the accounts of the several Underwriters on the
records of DTC will have been made pursuant to the UCC.
(f) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any 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 (ii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided
that the representations and warranties set forth in this paragraph
2(f) are limited to statements or omissions made in reliance upon
information relating to such Selling Shareholder furnished to the
Company in writing by such Selling Shareholder expressly for use in the
Registration Statement, the Prospectus or any amendments or supplements
thereto, it being understood and agreed that the only such information
furnished by any such Selling Shareholder consists of the information
about such Selling Shareholder under the caption "Principal and Selling
Shareholders" in the Prospectus.
3. Agreements to Sell and Purchase. Each of the Selling Shareholders
severally and not jointly hereby agrees to sell to the several Underwriters, and
each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Selling Shareholder at
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$- a share (the "PURCHASE PRICE") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the number of Firm Shares to be sold by such Selling
Shareholder as the number of Firm Shares set forth in Schedule II hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Shareholders
agree to sell to the Underwriters the Additional Shares, and the Underwriters
shall have the right to purchase, severally and not jointly, up to 1,050,000
Additional Shares at the Purchase Price. You may exercise this right on behalf
of the Underwriters in whole or from time to time (but no more than three times)
in part by giving written notice of each election to exercise the option not
later than 30 days after the date of this Agreement. Any exercise notice shall
specify the number of Additional Shares to be purchased by the Underwriters and
the date on which such shares are to be purchased. Each purchase date must be at
least one business day after the written notice is given and may not be earlier
than the closing date for the Firm Shares nor later than ten business days after
the date of such notice. Additional Shares may be purchased as provided in
Section 4 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. On each day, if any, that
Additional Shares are to be purchased (an "OPTION CLOSING DATE"), each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased on such Option Closing Date as the number of
Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
The Company and each Selling Shareholder hereby agrees that, without
the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 90 days after the date of
the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise.
The restrictions contained in the preceding paragraph shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, (C) grants by the Company of employee
stock options or other equity-based employee compensation pursuant to the terms
of a plan in effect on the date of this Agreement, (D) transactions by persons
other than the Company relating to shares of Common Stock or other securities
acquired in open market transactions after the completion of the offering
contemplated by this Agreement, (E) transfers by a Selling Shareholder of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock to a family member of such Selling Shareholder or trust created for the
benefit of such Selling Shareholder or a family member of such Selling
Shareholder, (F) in the case of any
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Selling Shareholder that is a partnership, corporation or limited liability
company, as a distribution to the partners, shareholders or members thereof, or
(G) transfers by a Selling Shareholder of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock to an affiliate
of such Selling Shareholder, provided that in the case of any transfer or
distribution pursuant to clauses (E), (F) or (G), (i) each transferee agrees to
be bound by the terms of this lock-up agreement and (ii) no filing by any party
(transferee or transferor) under Section 16(a) of the Securities Exchange Act of
1934, as amended, shall be required or shall be made voluntarily in connection
with such transfer or distribution (other than a filing on Form 5 made after the
expiration of the 90-day period referred to above). In addition, (x) each
Selling Shareholder agrees that it will not, during the period ending 90 days
after the date of the Prospectus, make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock and (y) the
Company agrees that it will not, during the period ending 90 days after the
effectiveness of the Registration Statement, file a registration statement
pursuant to the request of any shareholder under the Shareholders Agreement
dated December 12, 2001, in either case without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters.
4. Terms of Public Offering. The Selling Shareholders are advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Selling
Shareholders are further advised by you that the Shares are to be offered to the
public initially at $? per share (the "PUBLIC OFFERING PRICE") and to certain
dealers selected by you at a price that represents a concession not in excess of
$? per share under the Public Offering Price.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Selling Shareholder shall be made to EquiServe Trust Company, N.A. in Federal or
other funds immediately available in New York City against delivery of such Firm
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on July 1, 2003 or at such other time on the same or such
other date, not later than July 8, 2003, as shall be designated in writing by
you. The date and time of such payment are referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to EquiServe Trust
Company, N.A. in Federal or other funds immediately available in New York City
against delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on the date specified in
the corresponding notice described in Section 3 or at such other time on the
same or on such other date, in any event not later than August 8, 2003, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE".
Certificates for the Shares shall be in definitive form and registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Closing Date or the applicable
Option Closing Date, as the case may be. The certificates evidencing the Shares
shall be delivered to you on the Closing Date or an Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer
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taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Selling Shareholders to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 4:00 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's or any
subsidiary's securities or in the Company's or any
subsidiary's financial strength or claims paying ability
rating by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
results of operations of the Company and its combined
subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 6(a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion from LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., outside counsel
for the Company, dated the Closing Date, substantially in the form of
Exhibit A.
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(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx Xxxx & Xxxxxxx, special Bermuda counsel to the Company,
dated the Closing Date, substantially in the form of Exhibit B.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxx & Xxxxxxx, special tax counsel to the Company, to
the effect that the statements in the Prospectus under the headings "Risk
Factors - Risks Related to Taxation" and "Material Tax Considerations"
which relate to United States income tax laws, regulations and rulings
fairly summarize in all material respects such laws, regulations and
rulings.
(f) The Underwriters shall have received on the Closing Date an
opinion of counsel for each of the Selling Shareholders, dated the Closing
Date, substantially in the form of Exhibit C.
(g) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in the last paragraph of
Exhibit A.
(h) The opinions of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., Xxxxxxx
Xxxx & Xxxxxxx and Xxxxxx Xxxxxx & Xxxxxxx shall be rendered to the
Underwriters and the opinions of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
and Xxxxxxx Xxxx & Xxxxxxx shall be rendered to the Selling Shareholders
at the request of the Company and shall so state therein. The opinion of
counsel for each of the Selling Shareholders shall be rendered to the
Underwriters at the request of the Selling Shareholders and shall so state
therein.
(i) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, and upon delivery to PricewaterhouseCoopers of a
letter of representations from any Selling Shareholder satisfactory to
PricewaterhouseCoopers, such Selling Shareholder shall have received on
the Closing Date, a letter dated the Closing Date, in form and substance
satisfactory to the Underwriters, from PricewaterhouseCoopers, independent
public accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus; provided that
the letters delivered on the Closing Date shall use a "cut-off date" not
earlier that the date hereof.
(j) The "lock-up" agreements, each substantially in the form of
Exhibit D hereto, between you and the shareholders, officers and directors
of the Company listed on Exhibit E hereto relating to sales and certain
other dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force and
effect on the Closing Date.
(k) The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the
applicable Option Closing Date of such documents as you may reasonably
request with respect to the good standing of the Company and Montpelier Re
and other matters related to the delivery of such Additional Shares.
7. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
11
(a) To furnish to you, without charge, 5 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 7(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to material taxation
or service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending June 30, 2004 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and one counsel for the
Selling Shareholders as appointed in accordance with the
12
Shareholders Agreement dated December 12, 2001 in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the offer and
sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 7(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all
costs and expenses incident to listing the Shares on the New York Stock
Exchange, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company,
travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and half of the cost of any aircraft
chartered in connection with the road show (the remainder to be for the
account of the Underwriters) and (ix) all other costs and expenses
incident to the performance of the obligations of the Company and the
Selling Shareholders hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in
this Section, Section 8 entitled "Indemnity and Contribution", and the
last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and
any advertising expenses connected with any offers they may make.
(g) The provisions of this Section shall not supersede or otherwise
affect any agreement that the Company and the Selling Shareholders may
otherwise have for the allocation of such expenses among themselves.
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
each affiliate of any Underwriter within the meaning of Rule 405 under the
Securities Act (collectively, the "INDEMNIFIED
13
UNDERWRITER PARTIES"), and each Selling Shareholder from and against any
and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages or
liabilities, unless the failure to send or give such Prospectus is the
result of noncompliance by the Company with Section 7(a) hereof.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each indemnified Underwriter party
from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only with reference to
information relating to such Selling Shareholder furnished in writing by
or on behalf of such Selling Shareholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto, it being understood and agreed that the
only such information furnished by any such Selling Shareholder consists
of the information about such Selling Shareholder under the caption
"Principal and Selling Shareholders" in the Prospectus; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any
14
amendments or supplements thereto) was not sent or given by or on behalf
of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless the failure to send or give such
Prospectus is the result of noncompliance by the Company with Section 7(a)
hereof. Notwithstanding the provisions of this Section 8(b), no Selling
Shareholder shall be required to pay an amount in excess of the net
proceeds received by such Selling Shareholder from the Shares sold by it
hereunder.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the directors of the Company, the officers
of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act and each Selling
Shareholder to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a), 8(b) or 8(c), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless 1) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or 2)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (i) the fees
and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act or who are affiliates of any Underwriter
within the meaning of Rule 405 under the Securities Act, (ii) the fees and
expenses of more than one separate firm (in addition to any local counsel)
for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either such Section and (iii) the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder
within the meaning of either such Section, and that all such fees and
15
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons and affiliates
of any Underwriters, such firm shall be designated in writing by Xxxxxx
Xxxxxxx & Co. Incorporated. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of
any such separate firm for the Selling Shareholders and such control
persons of any Selling Shareholders, such firm shall be designated in
writing by the persons named as attorneys in fact for the Selling
Shareholders under the Powers of Attorney. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section 8(a),
8(b) or 8(c) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause
8(e)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause 8(e)(i) above but also the relative fault of the indemnifying party
or parties on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Selling Shareholders on the one hand and the Underwriters on the
other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the
offering of the Shares (before deducting expenses) received by the Company
and each Selling Shareholder and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. (For the purposes of this Section 8(e), the
benefit to the Company shall be deemed to be equal to the total net
proceeds from the offering of the Shares (before deducting expenses)). The
relative fault of the Company or the Selling Shareholders on the one hand
and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or Selling
Shareholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or
16
prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 8 are several in
proportion to the respective number of Shares they have purchased
hereunder, and not joint. Notwithstanding the provisions of this Section
8(e), no Selling Shareholder shall be required to pay an amount in excess
of the net proceeds received by such Selling Shareholder from the Shares
sold by it hereunder.
(f) The Company, the Selling Shareholders and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 8(e). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law
or in equity.
(g) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company and the Selling Shareholders contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or any
affiliate of any Underwriter, any Selling Shareholder or any person
controlling any Selling Shareholder or by or on behalf of the Company, the
officers or directors of the Company or any person controlling the Company
and (iii) acceptance of and payment for any of the Shares.
(h) The provisions of this Section shall not supersede or otherwise
affect any agreement that the Company and the Selling Shareholders may
otherwise have for the allocation of such indemnity and contribution
matters among themselves.
9. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a material disruption in the
securities
17
settlement, payment or clearance services in the United States shall have
occurred, (iv) any moratorium on commercial banking activities shall have been
declared by Federal or New York State or Bermuda authorities or (v) there shall
have occurred any outbreak or escalation of hostilities, or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you, the Company and
the Selling Shareholders for the purchase of such Firm Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, Company or the Selling
Shareholders. In any such case either you or the relevant Selling Shareholders
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. If, on an Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
Option Closing Date, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase the Additional Shares to be
sold on such Option Closing Date or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or any Selling
Shareholder to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or any Selling Shareholder shall be
unable to perform its obligations under this Agreement, the
18
Company and the Selling Shareholders will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
11. Successors and Assigns. This Agreement shall be binding upon and inure
solely to the benefit of, the Underwriters and the Company, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign solely by reason of such
purchase.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law; Submission to Jurisdiction; Appointment of Agent for
Service. (a)This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
(b) The Company irrevocably submits to the non-exclusive
jurisdiction of any New York State or United States Federal court sitting
in The City of New York over any suit, action or proceeding arising out of
or relating to this Agreement, the Prospectus, the Registration Statement
or the offering of the Shares. The Company irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an
inconvenient forum. To the extent that the Company has or hereafter may
acquire any immunity from the jurisdiction of any court or from any legal
process with respect to itself or its property, it irrevocably waives, to
the fullest extent permitted by law, such immunity in respect of any such
suit, action or proceeding.
(c) The Company hereby irrevocably appoints CT Corporation System,
with offices at 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, as its agent for
service of process in any suit, action or proceeding described in the
preceding paragraph. The Company agrees that service of process in any
such suit, action or proceeding may be made upon it at the office of its
agent. The Company waives, to the fullest extent permitted by law, any
other requirements of or objections to personal jurisdiction with respect
thereto. The Company represents and warrants that its agent has agreed to
act as agent for service of process, and each agrees to take any and all
action, including the filing of any and all documents and instruments,
that may be necessary to continue such appointment in full force and
effect.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
19
Montpelier Re Holdings Ltd.
By:
-------------------------------------
Name:
Title:
The Selling Shareholders named in
Schedule I hereto, acting severally
By:
-------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Credit Suisse First Boston LLC
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
----------------------------------
Name:
Title:
20
SCHEDULE I
NUMBER OF FIRM SHARES NUMBER OF ADDITIONAL
SELLING SHAREHOLDER TO BE SOLD SHARES TO BE SOLD
-------------------------------------------------------- --------------------- --------------------
Cypress Merchant B Partners II (Cayman) L.P. - -
Cypress Merchant Banking Partners II-A C.V. - -
Cypress Side-By-Side (Cayman), L.P. - -
55th Street Partners II (Cayman) L.P. - -
DLJMP Overseas Partners III, C.V. - -
DLJ Offshore Partners III, C.V. - -
DLJ Offshore Partners III-1, C.V. - -
DLJ Offshore Partners III-2, C.V. - -
DLJMB Partners III GmbH & Co. KG - -
Millennium Partners II L.P. - -
MBP III Plan Investors L.P. - -
Vestar-Montpelier Holdings A L.P. - -
Vestar-Montpelier Holdings B L.P. - -
Vestar-Montpelier Employees Ltd. - -
Xxxxxxxx Holdings Ltd. 796,055 -
Xxxxxxx Global Equity Partners, L.P. 409,903 -
Xxxxxxx Global Equity Partners (Bermuda), L.P. 74,692 -
GGEP-SK, LLC 6,445 -
Xxxxxxxx Xxxxxxxxx & Xxxx Capital Partners, L.P. 361,736 -
FFL Executive Partners, L.P. 6,544 -
Bank of America Corporation 336,936 -
Mutual Shares Fund 124,221 -
Mutual Qualified Fund 59,723 -
Mutual Beacon Fund 65,492 -
Mutual Discovery Fund 28,947 -
Mutual European Fund 9,870 -
Mutual Financial Services Fund 4,591 -
Mutual Shares Securities Fund 9,993 -
Mutual Discovery Securities Fund 1,314 -
Mutual Beacon Fund (Canada) 1,154 -
Franklin Mutual Beacon Fund 1,596 -
OIP Montpelier, L.P. 208,257 -
Century Capital Partners II, L.P. 40,000 -
Trident Capital Fund-IV, L.P. 36,392 -
Trident Capital Fund-IV Principals Fund, L.P. 1,323 -
Trident Capital Fund-IV Affiliates Fund (Q), L.P. 667 -
Trident Capital Fund-IV Affiliates Fund, L.P. 498 -
Trident Capital Fund-V, L.P. 74,124 -
Trident Capital Parallel Fund-V, C.V. 5,631 -
Trident Capital Fund-V Principals Fund, L.P. 1,515 -
Trident Capital Fund-V Affiliates Fund (Q), L.P. 000 -
Xxxxxxx Xxxxxxx Xxxx-X Affiliates Fund, L.P. 431 -
I
AXP Variable Portfolio Capital Resource Fund 102,300 -
Renaissance Executive Partners, L.P. 26,598 -
Total: ............................ 7,000,000 8,050,000
--------- ---------
II
SCHEDULE II
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
--------------------------------------------------- ---------------------
Xxxxxx Xxxxxxx & Co. Incorporated..................
Banc of America Securities LLC.....................
Credit Suisse First Boston LLC.....................
X.X. Xxxxxx Securities Inc.........................
Bear, Xxxxxxx & Co. Inc............................
Xxxxxxx & Partners Securities, LLC.................
X.X. Xxxxxx Securities Inc.
UBS Securities LLC
Total:.................................... 7,000,000
---------
II
EXHIBIT A
FORM OF OPINION OF LLGM
TO BE DELIVERED PURSUANT
TO SECTION 6(C)
1. Neither the execution, delivery or performance of the Underwriting
Agreement by the Company, nor compliance by the Company with the provisions
thereof, nor or the consummation by the Company of the transactions contemplated
therein (A) to our knowledge, requires any consent, approval, authorization or
any other order of, or registration or filing with, any United States Federal or
New York State court, regulatory body or administrative agency (a "U S
REGULATORY AUTHORITY"), except for such consents, approvals, authorizations and
orders (i) as have been obtained and (ii) as may be required under state
securities or Blue Sky laws of any jurisdiction in connection with the purchase
and distribution of the Shares by the Underwriters (as to which we express no
opinion), (B) conflicts with or constitutes a breach of, or a default under, any
bond, debenture, note or other evidence of indebtedness or any agreement,
indenture, lease or other instrument set forth on Schedule I hereto, to the
extent such documents are governed by New York law, or (C) to our knowledge,
violates any existing United States Federal or New York State law or regulation
or any ruling, judgment, injunction, order or decree of any U. S. Regulatory
Authority (other than state securities or Blue Sky laws of any jurisdiction in
connection with the purchase and distribution of the Shares by the underwriters,
as to which we express no opinion) that is applicable to the Company or the
Designated Subsidiaries.
2. The Registration Statement and the Prospectus (except for the financial
statements and notes thereto and the related statements, supporting schedules
and other financial and statistical information included or referred to therein
or omitted therefrom, as to which we express no opinion) comply as to form in
all material respects with the requirements of the Act.
3. To our knowledge, (A) there are no United States Federal or New York
State legal or governmental proceedings pending or threatened against the
Company or any of the Designated Subsidiaries, or to which the Company or any of
the Designated Subsidiaries of any of their respective properties is subject,
that are required to be described in the Registration Statement or Prospectus
and are not so described and (B) there are no agreements, contracts, indentures,
leases or other instruments of a character that are required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required, as the case
may be.
4. The statements relating to United States Federal or New York State
legal matters, proceedings or documents in the Prospectus under the captions
"Regulation -- United States Insurance Regulation", "Description of Share
Capital -- Shareholders Agreement" and "Shares Eligible for Future Sale", fairly
summarize in all material respects such matters, proceedings or documents.
5. To the extent that the laws of the State of New York are applicable,
the Company (A) has validly submitted to the non-exclusive jurisdiction of any
New York State or Federal court sitting in The City of New York over any suit,
action or proceeding arising out of
A-1
or relating to the Underwriting Agreement, the Prospectus, the Registration
Statement or the offering of the Shares, (B) has validly waived any objection to
the venue of a proceeding in any such New York court, and (C) has duly appointed
CT Corporation System as its authorized agent for the purposes described in the
Underwriting Agreement, assuming (i) the validity of such actions under Bermuda
law and (ii) the due authorization, execution and delivery of the Underwriting
Agreement by or on behalf of the Underwriters.
6. The Company is not required to register as an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
In rendering the opinion expressed in paragraph 2 above, we necessarily
assume the correctness and completeness of the statements made by the Company in
the Registration Statement and the Prospectus and assume no responsibility
therefor. In the course of the preparation by the Company of the Registration
Statement and the Prospectus, we have participated in conferences with certain
officers and employees of the Company, with representatives of
PricewaterhouseCoopers, independent auditors for the Company, and with counsel
for the Underwriters, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed and at which we
reviewed certain corporate records, documents and proceedings. Although we have
not undertaken to determine independently, do not express an opinion as to, and
do not assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus except
as stated expressly in paragraph 4 above, we advise you that, based upon our
examination of the Registration Statement and the Prospectus and upon the
above-described procedures, no facts have come to our attention that have caused
us to believe that the Registration Statement (it being understood that we have
not been requested to comment and do not express any comment with respect to the
financial statements and the notes thereto or the related statements, supporting
schedules and other financial and statistical information included or referred
to therein or omitted therefrom), at the time the Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus (it being understood
that we have not been requested to comment and do not express any comment with
respect to the financial statements and the notes thereto or the related
statements, supporting schedules and other financial and statistical information
included or referred to therein or omitted therefrom) at the time it was filed
with the Commission pursuant to Rule 424(b) under the Act, contained, or, on the
date hereof, contains, an untrue statement of a material fact or omitted, or, on
the date hereof, omits, 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.
A-2
SCHEDULE I TO LLGM OPINION
1. Underwriting Agreement.
2. Share Purchase Warrant, dated as of January 3, 2002, between Montpelier
Re Holdings Ltd. (the "COMPANY") and Banc of America Securities LLC, as amended
by Amendment, dated as February 11, 2002, as further amended by Amendment, dated
as of July 1, 2002.
3. Share Purchase Warrant, dated January 3, 2002, between the Company and
Xxxxxxxx Group plc, as amended by Amendment, dated as of February 11, 2002, as
further amended by Amendment, dated as of July 1, 2002.
4. Share Purchase Warrant, dated January 3, 2002, between the Company and
White Mountains Insurance Group, Ltd., as amended by Amendment, dated as of
February 11, 2002, as further amended by Amendment, dated as of July 1, 2002.
5. Shareholders Agreement, dated as of December 12, 2001, among the
Company and each of the persons listed on Schedule 1 thereto, as amended by
Amendment No. 1, dated December 24, 2001.
6. Service Agreement, dated as of December 12, 2001, between Xxxxxxx
Xxxxxx, the Company and Montpelier Reinsurance Ltd.
7. Service Agreement, dated as of January 24, 2002, between Xxxxxxx Xxxxxx
and Montpelier Marketing Services (UK) Limited.
8. Service Agreement, dated as of January 1, 2002, between C. Xxxxxxx
Xxxxxxxx, III and Montpelier Reinsurance Ltd.
9. Service Agreement, dated as of January 1, 2002, between Xxxxxx Xxxxxx
Story Xxxxxx and Montpelier Reinsurance Ltd.
10. Service Agreement, dated as of January 24, 2002, between Xxxxxx Xxxxxx
Story Xxxxxx and Montpelier Marketing Services (UK) Limited.
11. Service Agreement, dated as of January 24, 2002, between Xxxxxxxx
Xxxxxx-Xxxxx and Montpelier Marketing Services (UK) Limited.
12. Credit Agreement, dated as of December 12, 2001, among the Company and
Various Financial Institutions, as amended by Amendment Agreement, dated as of
December 26, 2001, by Second Amendment Agreement, dated as of June 17, 2002 and
by Third Amendment Agreement, dated as of August 1, 2002.
13. Share Option Plan.
14. Performance Unit Plan.
A-3
EXHIBIT B
FORM OF OPINION OF CD&P TO BE DELIVERED PURSUANT TO SECTION 6(D)
1. The Company and Montpelier Re are duly incorporated and validly existing
under the laws of Bermuda in good standing (meaning that they have not
failed to make any required filing with any Bermuda government authority
or to pay any Bermuda government fee or tax which would make them liable
to be struck off the register of companies and thereby cease to exist
under the laws of Bermuda).
2. The Company has the necessary corporate power and authority to execute and
file the Registration Statement under the Securities Act and to enter into
and perform its obligations under the Underwriting Agreement. Neither the
execution and filing under the Securities Act of the Registration
Statement by the Company, nor the execution and delivery of the
Underwriting Agreement and the performance by the Company of its
obligations thereunder will violate the Company Constitutional Documents
nor any applicable law, regulation, order or decree in Bermuda.
3. The Company has taken all corporate action required to authorize its (i)
execution, delivery and performance of the Underwriting Agreement; and
(ii) execution and filing of the Registration Statement with the
Commission under the Securities Act. The Underwriting Agreement has been
duly authorized and executed by or on behalf of the Company and
constitutes the valid and binding obligations of the Company enforceable
in accordance with its terms. The Registration Statement has been duly
executed by or on behalf of the Company.
4. No order, consent, approval, licence, authorisation or validation of or
exemption by any government or public body or authority of Bermuda or any
sub-division thereof is required (i) to authorize or in connection with
the execution and filing of the Registration Statement, or (ii) in
connection with sale of the Shares being delivered pursuant to the
Underwriting Agreement, or (iii) the execution, delivery, performance and
enforcement of the Underwriting Agreement, except such as have been duly
obtained in accordance with Bermuda law and which are in full force and
effect.
5. The Company and Montpelier Re have the necessary corporate power and
authority and all permits, licenses and authorisations required by Bermuda
law to own or lease their properties and conduct their business as
described in the Prospectus.
6. The statements contained in the Prospectus under the captions referred to
in Schedule 1 hereto, insofar as such statements constitute a summary of
the matters of Bermuda law as so referred therein, fairly represent a
summary of the relevant Bermuda law or the Constitutional Documents of the
Companies and fairly and accurately present the information set forth
therein in all material respects.
7. (a) The authorized capital of the Company is as set forth in the
Prospectus.
B-1
(b) All of the issued share capital of the Company at the date of the
Company Register was duly authorized, validly issued, and such
shares of the Company were fully paid and non-assessable.
(c) The Shares conform to the description thereof in the Prospectus.
8. There are no Bermuda stamp duty, transfer or similar taxes payable in
respect of delivery of the Shares to the Underwriters or any subsequent
purchasers pursuant to the Underwriting Agreement (assuming that such
Underwriters or subsequent purchasers of the Shares are not resident in
Bermuda for exchange control purposes). The Underwriting Agreement is not
subject to ad valorem stamp duty in Bermuda, and no registration,
documentary, recording, transfer or other similar tax, fee or charge by
any Bermuda government authority is payable in connection with the
execution, delivery, filing, registration or performance of the Agreement.
9. There is no capital gains, income or other tax of Bermuda imposed by
withholding or otherwise on any payment to be made to or by the Company
pursuant to the Underwriting Agreement.
10. Neither of the Companies is entitled to any immunity under the laws of
Bermuda, whether characterized as sovereign immunity or otherwise, from
any legal proceedings to enforce the Underwriting Agreement in respect of
itself or its property.
11. It is not necessary or desirable to ensure the enforceability in Bermuda
of the Underwriting Agreement that it be registered in any register kept
by, or filed with, any governmental authority or regulatory body in
Bermuda.
12. Consummation of the transactions contemplated by the Underwriting
Agreement, including but not limited to any actions taken pursuant to the
indemnification and contribution provisions set forth therein, will not
constitute unlawful financial assistance by the Company under Bermuda law.
13. Based solely upon the Constitutional Documents and upon certified copies
supplied to us by the Company of certain correspondence from the Bermuda
Monetary Authority, the Company has been designated as non-resident of
Bermuda for the purposes of the Xxxxxxx Xxxxxxxx Xxxxxxx Xxx 0000 and as
such is free to acquire, hold, transfer and sell foreign currency and
securities without restriction under such legislation (including the
payment of dividends or other distributions which may be lawfully made by
the Company under the Act and the Constitutional Documents) and is an
"exempted company" under the Act.
14. The Company's agreement to the choice of law provisions set forth in
Section 11 of the Underwriting Agreement is a valid choice of law and
would be recognized and given effect to in any action brought before a
court of competent jurisdiction in Bermuda except for those laws (i) which
such court considers to be procedural in nature, (ii) which are revenue or
penal laws or (iii) the application of which would be inconsistent with
public policy, as such term is interpreted under the
B-2
laws of Bermuda. To the extent Bermuda law is applicable, the submission
by the Company in the Agreement to the non-exclusive jurisdiction of any
New York State or United States Federal court sitting in The City of New
York, the waiver of any objection related to inconvenient forum and
appointment of an agent for service of process are valid and binding upon
the Company.
15. The courts of Bermuda would recognize as a valid judgment, a final and
conclusive judgment in personam obtained in the federal courts of New York
against the Company based upon the Underwriting Agreement under which a
sum of money is payable (other than a sum of money payable in respect of
multiple damages, taxes or other charges of a like nature or in respect of
a fine or other penalty) and would give a judgment based thereon provided
that (a) such courts had proper jurisdiction over the parties subject to
such judgment, (b) such courts did not contravene the rules of natural
justice of Bermuda, (c) such judgment was not obtained by fraud, (d) the
enforcement of the judgment would not be contrary to the public policy of
Bermuda, (e) no new admissible evidence relevant to the action is
submitted prior to the rendering of the judgment by the courts of Bermuda
and (f) there is due compliance with the correct procedures under the laws
of Bermuda.
16. The Company has received an assurance from the Ministry of Finance that in
the event of there being enacted in Bermuda any legislation imposing tax
on profits or income or computed on any capital asset, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax,
then the imposition of any such tax shall not be applicable to the Company
or any of its operations or its shares, debentures or other obligations
until March 28, 2016.
B-3
SCHEDULE I TO CD&P OPINION
(a) "Risk Factors -- Risks Related to Our Common Shares and This Offering:
- There are provisions in our charter documents which restrict the voting
rights of our common shares,
- U.S. persons who own our common shares may have more difficulty in
protecting their interests than U.S. persons who are shareholders of a
U.S. corporation,
- Anti-takeover provisions in our bye-laws could impede an attempt to
replace or remove our directors, which could diminish the value of our
common shares,
- You may have difficulty effecting service of process on us or enforcing
judgments against us in the United States.
- You may repurchase your common shares";
(b) "Risks Related to Taxation:
- We may become subject to taxes in Bermuda after 2016, which may have a
material adverse effect on our financial condition";
(c) "Risks Related to Regulation:
- If we become subject to insurance statutes and regulations in
jurisdictions other than Bermuda or there is a change to Bermuda law or
regulations or application of Bermuda law or regulations, there could be a
significant and negative impact on our business";
(d) "Dividend Policy";
(e) "Regulation:
- Bermuda Insurance Regulation
Certain Bermuda Law Considerations";
(f) "Material Tax Considerations:
- Taxation of the Company and Montipelier Re
- Taxation of Shareholders - Bermuda Taxation";
(g) "Description of Share Capital";
(h) "Enforceability of Civil Liabilities under United States Federal
Securities Laws and Other Matters"; and
(i) "Principal Shareholders" - Footnote (1) to Shareholder table.
B-4
EXHIBIT C
FORM OF OPINION OF COUNSEL TO EACH OF THE SELLING
SHAREHOLDERS TO BE DELIVERED PURSUANT TO SECTION 6(F)
1. The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders;
2. The execution and delivery by each Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, the
Underwriting Agreement and the Custody Agreement and Powers of Attorney of such
Selling Shareholder will not contravene any provision of applicable law, or the
certificate of incorporation or by laws of such Selling Shareholder (if such
Selling Shareholder is a corporation), or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon such Selling
Shareholder or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction over such
Selling Shareholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Shareholder of its obligations under the
Underwriting Agreement or the Custody Agreement or Power of Attorney of such
Selling Shareholder, except such as may be required by the securities or Blue
Sky laws of the various states in connection with offer and sale of the Shares;
3. Each of the Selling Shareholders has the legal right and power, and all
authorization and approval required by law, to enter into this Underwriting
Agreement and the Custody Agreement and Power of Attorney of such Selling
Shareholder and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder or a security entitlement in respect of such Shares;
4. The Custody Agreement and the Power of Attorney of each Selling
Shareholder have been duly authorized, executed and delivered by such Selling
Shareholder and are valid and binding agreements of such Selling Shareholder;
5. Upon payment for the Shares to be sold by the Selling Stockholders
pursuant to the Underwriting Agreement, delivery of such Shares, as directed by
the Underwriters, to Cede or such other nominee as may be designated by DTC,
registration of such Shares in the name of Cede or such other nominee and the
crediting of such Shares on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter has notice of
any adverse claim within the meaning of Section 8-105 of the UCC to such
Shares), (A) DTC shall be a "protected purchaser" of such Shares within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such Shares
and (C) no action based on any "adverse claim" (within the meaning of Section
8-102 of the UCC) to such Shares may be asserted against the Underwriters with
respect to such security entitlement; in giving this opinion, counsel for the
Selling
C-1
Shareholders may assume that when such payment, delivery and crediting occur,
(x) such Shares will have been registered in the name of Cede or another nominee
designated by DTC, in each case on the Company's share registry in accordance
with its certificate of incorporation, bylaws and applicable law, (y) DTC will
be registered as a "clearing corporation" within the meaning of Section 8-102 of
the UCC and (z) appropriate entries to the accounts of the several Underwriters
on the records of DTC will have been made pursuant to the UCC.
C-2
EXHIBIT D
[FORM OF LOCK-UP LETTER]
____________, 2003
Xxxxxx Xxxxxxx & Co. Incorporated
as representative of the Underwriters
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Montpelier Re Holdings Ltd., a Bermuda
corporation (the "COMPANY") and certain shareholders of the Company (the
"SELLING SHAREHOLDERS"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"UNDERWRITERS"), of __________ shares (the "OFFERED SHARES") of the Company's
common shares, par value 1/6 cent per share (the "COMMON SHARES").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on June
10, 2003 and ending 90 days after the date of effectiveness of the registration
statement (the "REGISTRATION STATEMENT") associated with the Public Offering,
(1) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any Common Shares or any securities convertible into or exercisable
or exchangeable for Common Shares, or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Shares, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Shares or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (a) the sale of any Offered Shares to the Underwriters
pursuant to the Underwriting Agreement, (b) transactions relating to Common
Shares or other securities acquired in open market transactions after the
completion of the Public Offering, (c) transfers of Common Shares or securities
convertible into or exercisable or exchangeable for Common Shares to a family
D-1
member of the undersigned or trust created for the benefit of the undersigned or
a family member of the undersigned, (d) in the case of any Selling Shareholder
that is a partnership, corporation or limited liability company, as a
distribution to the partners, shareholders or members thereof, or (e) transfers
of Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares to an affiliate of the undersigned, provided that
in the case of any transfer or distribution pursuant to clauses (c), (d) or (e),
(i) each transferee agrees to be bound by the terms of this agreement and (ii)
no filing by any party (transferee or transferor) under Section 16(a) of the
Securities Exchange Act of 1934, as amended, shall be required or shall be made
voluntarily in connection with such transfer or distribution (other than a
filing on Form 5 made after the expiration of the 90-day period referred to
above).
In addition, the undersigned agrees that, without the prior written
consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the
period commencing on June 10, 2003 and ending 90 days after the date of the
effectiveness of the Registration Statement, make any demand for or exercise any
right with respect to, the registration of any Common Shares of any security
convertible into or exercisable or exchangeable for Common Shares. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
undersigned's Common Shares except in compliance with the foregoing
restrictions.
The undersigned understands that the Company, the Selling Shareholders and
the Underwriters are relying upon this Lock-Up Agreement in proceeding toward
consummation of the Public Offering. The undersigned further understands that
this Lock-Up Agreement is irrevocable and shall be binding upon the
undersigned's heirs, legal representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters. This Lock-Up Agreement
shall cease to be in effect if the Registration Statement is not declared
effective by July 31, 2003.
Very truly yours,
-----------------------------
(Name)
-----------------------------
(Address)
D-2
EXHIBIT E
OFFICERS AND DIRECTORS
Xxxx X. (Xxxx) Xxxxx
Xxxxxxx Xxxxxx
K. Xxxxxx Xxxx
Xxxxx X. Xxxxxxxxx
X. Xxxxxxxx Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxx
Xxxxxxx Xxxxxxx
SHAREHOLDERS
E-1
