EXECUTION COPY
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made and entered into as of May 25, 2006,
among Montpelier Re Holdings Ltd., a Bermuda company (the "COMPANY"), WLR
Recovery Fund II, L.P. and WLR Recovery Fund III, L.P. (each, a "Purchaser" and
collectively, the "PURCHASERS").
1. Authorization and Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Company has authorized the issuance and sale
of 3,448,276 common shares (the "TRANCHE A SHARES"), par value 1/6 cent per
share (the "COMMON SHARES"), and an additional 3,448,276 Common Shares, subject
to adjustment as provided in Section 6(q) hereof (the "TRANCHE B SHARES," and,
together with the Tranche A Shares, the "SHARES").
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company hereby agrees to sell to each Purchaser, and such
Purchaser agrees to purchase from the Company, the number of Shares set forth on
such Purchaser's signature page hereto at the aggregate purchase price set forth
on such signature page (the "TRANCHE A PURCHASE PRICE" and, subject to
adjustment as provided in Section 6(q) hereof, the "TRANCHE B PURCHASE PRICE,"
and together, "PURCHASE PRICE").
3. Payment and Delivery. Payment for the Tranche A Shares shall be made
to the Company in Federal or other funds immediately available in New York City
against delivery of a certificate representing such Shares or a certified copy
of the Company's share register containing the relevant entry in respect of the
Tranche A Shares (such payment and delivery hereinafter referred to as the
"TRANCHE A CLOSING") at 10:00 a.m., New York City time, on June 1, 2006, or at
such other time on the same or such other date, as shall be agreed by the
Company and the Purchasers. The time and date of such payment are hereinafter
referred to as the "TRANCHE A CLOSING DATE." Payment for the Tranche B Shares
shall be made to the Company in Federal or other funds immediately available in
New York City against delivery of a certificate representing such Shares or a
certified copy of the Company's share register containing the relevant entry in
respect of the Tranche B Shares (such payment and delivery hereinafter referred
to as the "TRANCHE B CLOSING") at 10:00 a.m., New York City time, on the first
business day after the condition in Section 5(d) hereto has been satisfied, or
at such other time on the same or such other date, not later than three business
days after such condition has been satisfied, as shall be agreed by the Company
and the Purchasers; provided that, if the waiting period under the HSR Act (as
defined below) is early terminated, the Purchasers will use reasonable efforts
to close promptly but can defer the Tranche B Closing for a period up to ten
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business days after the date of such early termination. The time and date of
such payment are hereinafter referred to as the "TRANCHE B CLOSING DATE."
Certificates for the Shares shall be registered in the names of the
Purchasers or if so indicated on the signature page hereto, in the name of a
nominee designated by the Purchasers. The certificates evidencing the Shares
shall be delivered to the Purchasers on the applicable Closing Date, with any
transfer taxes payable in connection with the transfer of such Shares to the
Purchaser duly paid by the Company, against payment of the Purchase Price
therefor.
4. Conditions to the Company's Obligations. The Company's obligation to
issue and sell the Shares to the Purchasers on the applicable Closing Date is
subject to the following conditions:
(a) Receipt by the Company of Federal or other immediately
available funds in the full amount of the Purchase Price that is
allocable to the Shares being transferred on such Closing Date;
(b) accuracy of the representations and warranties made by the
Purchasers and the fulfillment in all material respects of those
undertakings of the Purchasers to be fulfilled prior to the date of
such Closing; and
(c) With respect to the Tranche B Closing only, the waiting
period applicable to the sale of the Tranche B Shares under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
regulations promulgated thereunder (including 16 C.F.R. Sec. 802.9)
(the "HSR ACT") shall have expired or been terminated prior to the
Tranche B Closing Date.
5. Conditions to the Purchasers' Obligations. The obligations of the
Purchasers to purchase and pay for the Shares on the applicable Closing Date are
subject to the following conditions:
(a) The Purchasers shall have received a certificate, dated
the date of such Closing and signed by an executive officer of the
Company, to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of such
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 such date. The officer signing and
delivering such certificate may rely, with respect to the threatened
matters referred to in Section 6(k), upon the best of his or her
knowledge.
(b) The Purchasers shall have received an opinion of Xxxxxxx
Xxxx & Xxxxxxx, special Bermuda counsel for the Company, dated the date
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of such Closing, substantially in the form set forth in Exhibit A and
otherwise reasonably acceptable to the Purchasers, as to matters (A)
through (E), and an opinion of Xxxxx Xxxx & Xxxxxxxx, outside counsel
for the Company, dated the date of such Closing, substantially in the
form set forth in Exhibit A and otherwise reasonably acceptable to the
Purchasers, as to matters (F) and (G). Such opinions shall be rendered
to the Purchasers at the request of the Company and shall so state
therein.
(c) The Purchasers shall have received such closing documents
in form and substance as are customary for transactions of this nature.
(d) With respect to the Tranche B Closing only, the waiting
period applicable to the sale of the Tranche B Shares under the HSR Act
shall have expired or been terminated prior to the Tranche B Closing
Date.
6. Representations, Warranties and Covenants of the Company. The
Company represents and warrants to, and covenants with, the Purchasers that as
of the date of this Agreement and as of each Closing Date:
(a) The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") all documents required to be filed
pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") and the applicable rules and regulations of the
Commission thereunder during the 12 months preceding the date of this
Agreement. The following documents (collectively, the "EXCHANGE ACT
DOCUMENTS") complied when filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder:
(i) Annual Report on Form 10-K for the year ended
December 31, 2005;
(ii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 2006; and
(iii) All other documents, if any, filed by the
Company with the Commission since December 31, 2005.
(b) The Company has been duly organized or formed and is
validly existing in good standing as an exempted company under the laws
of the jurisdiction of its organization or formation, with full power
and authority to own its property and to conduct its business as
currently conducted and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
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or be in good standing would not have a material adverse effect on the
Company and its consolidated subsidiaries, taken as a whole.
(c) The information contained in the Exchange Act Documents,
taken as a whole and as amended to the date hereof, does not as of the
date hereof 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.
(d) 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 incorporation or
formation, with full power and authority to own their property and to
conduct their business as currently conducted and are duly qualified to
transact business and are in good standing in each jurisdiction in
which the conduct of their business or their ownership or leasing of
property requires such qualification, 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 Company and its consolidated
subsidiaries, taken as a whole; all of the outstanding common shares of
each Designated Subsidiary of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been and, on or prior to the Tranche A
Closing Date the Registration Rights Agreement will have been, duly
authorized, executed and delivered by the Company, and constitute, or
will constitute, the valid and binding obligations of the Company,
enforceable against the Company in accordance with the terms thereof,
except to the extent such rights and indemnities are limited by
applicable law.
(f) The authorized share capital of the Company conforms in
all material respects to the description thereof contained in the
Exchange Act Documents.
(g) The outstanding common shares of the Company have been
duly authorized and validly issued, and are fully paid and
non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
Ex.1-4
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and
the Registration Rights Agreement will not contravene (i) the
memorandum of association or the amended and restated bye-laws of the
Company, (ii) any provision of any agreement or other instrument
binding upon the Company or any of the Designated Subsidiaries that is
material to the Company and the Designated Subsidiaries, taken as a
whole, except such as have been duly waived or otherwise satisfied, or
(iii) any provision of applicable law, judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or the Designated Subsidiaries, except as would not have, individually
or in the aggregate, a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole. No consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by the Company of its
obligations under this Agreement and the Registration Rights Agreement,
except such as may be required by the securities or Blue Sky or
insurance securities laws of the various states or foreign
jurisdictions in connection with the offer and sale of the Shares and
by Federal and state securities laws with respect to the Company's
obligations under the Registration Rights Agreement and such as have
been obtained.
(j) Except as disclosed in the Exchange Act Documents, there
has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its consolidated subsidiaries, taken as a whole, since
March 31, 2006.
(k) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its Designated Subsidiaries is a party or to which any of the
properties of the Company or any of its Designated Subsidiaries is
subject, other than proceedings accurately described in all material
respects in the Exchange Act Documents, that would reasonably be
expected to have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole.
(l) The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof will not be, required to register as, an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended.
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(m) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), an "AFFILIATE") of the Company has, directly,
or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in
the Securities Act) which is or will be integrated with the sale of the
Shares in a manner that would require the registration under the
Securities Act of the Shares; or (ii) offered, solicited offers to buy
or sold the Shares by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; and neither the Company
nor any Affiliate of the Company will engage in any of the actions
described in clauses (i) and (ii) of this paragraph.
(n) Subject to the accuracy of each Purchaser's
representations herein, it is not necessary in connection with the
offer, sale and delivery of the Shares to the Purchasers in the manner
contemplated by this Agreement to register the Shares under the
Securities Act.
(o) The Company shall, as soon as practicable following the
execution of this Agreement, but in no event later than the second
business day after the date of this Agreement, publicly disclose the
sale of Shares pursuant to this Agreement to the extent required by the
Exchange Act and the applicable rules and regulations of the Commission
thereunder.
(p) The Company covenants that it shall use its best efforts
to make, as promptly as practicable, an appropriate filing of a HSR
Notification and Report Form pursuant to the HSR Act with respect to
the sale of the Tranche B Shares contemplated hereby, to seek early
termination of such waiting period under the HSR Act and, except with
the prior written consent of the Purchasers, not to extend any waiting
period under the HSR Act or to enter into any agreement with the U.S.
Federal Trade Commission or the Antitrust Division of the U.S.
Department of Justice not to consummate the sale of the Tranche B
Shares contemplated hereby.
(q) In the event the Company makes an underwritten public
offering of its Common Shares, including, for the sake of clarity, an
underwritten public offering relating to a "variable forward
transaction" or similar transaction, at a per share purchase price to
the public (the "PUBLIC PURCHASE PRICE") below $14.50 as disclosed on
the cover page of a prospectus filed under Rule 424(b) of the
Securities Act of 1933, as amended, at any time prior to the Tranche B
Closing, the Company will, at its option, either (A) offer or cause to
be offered to the Purchasers the right to purchase any or all such
Common Shares at a per share price equal to the Public Purchase Price
Ex.1-6
(the "RIGHT OF FIRST REFUSAL"), or (B) at its option, the Company will
either (x) sell to each Purchaser on the Tranche B Closing Date its
allocable portion of an aggregate number of Shares equal to the Tranche
B Purchase Price divided by the Public Purchase Price, or (y) sell the
Tranche B Shares to the Purchasers at an aggregate purchase price equal
to the aggregate number of Tranche B Shares multiplied by the Public
Purchase Price. In the event that the Company elects to offer the
Purchasers the Right of First Refusal, the Purchasers shall remain
obligated to purchase the Tranche B Shares at the Tranche B Purchase
Price.
(r) On or prior to the Tranche A Closing Date, the Company
will have entered into a Registration Rights Agreement in the form of
Exhibit B hereto (the "REGISTRATION RIGHTS AGREEMENT").
7. Representations, Warranties and Covenants of the Purchasers.
Each Purchaser represents and warrants to, and covenants with, the
Company that:
(a) The Purchaser is a qualified institutional buyer as
defined in Rule 144A under the Securities Act (a "QIB") and has
requested, received, reviewed and considered all information it deems
relevant in making an informed decision to purchase the Shares. The
Purchaser is experienced in evaluating companies such as the Company.
At no time was the Purchaser presented with or solicited by any
publicly issued or circulated newspaper, mail, radio, television or, to
the Purchaser's knowledge, any other form of general advertising or
solicitation in connection with the offer, sale and purchase of the
Shares.
(b) The Purchaser is acquiring the number of Shares set forth
on the signature page hereto in the ordinary course of its business and
for its own account for investment only and with no present intention
of distributing any of such Shares or any arrangement or understanding
with any other persons regarding the distribution of such Shares, other
than as contemplated in the Registration Rights Agreement.
(c) The Purchaser will not, directly or indirectly, offer,
sell, charge, pledge, transfer or otherwise dispose of (or solicit
offers to buy, purchase or otherwise acquire or take a pledge of or
charge over) any of the Shares, except in compliance with the
Securities Act and the applicable rules and regulations of the
Commission thereunder.
(d) The Purchaser will have, on or prior to the Closing Date,
furnished to the Company a fully completed Securityholder Questionnaire
Ex.1-7
attached as Appendix I hereto and all of the information contained
therein will be true and correct as of such date and as of the Closing
Date.
(e) The Purchaser will notify the Company immediately of any
change in any such information until such time as the Purchaser has
sold all of its Shares or until the Company is no longer required to
keep the Registration Statement (defined below) effective.
(f) The Purchaser will not make any sale of the Shares without
complying with the provisions of this Agreement and without causing the
prospectus delivery requirement under the Securities Act to be
satisfied, and the Purchaser acknowledges that the certificates
evidencing the Shares will be imprinted with a legend in substantially
the following form (and a stop-transfer order may be placed against
transfer of the certificates for the Shares):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER SAID ACT UNTIL THE PASSAGE OF TWO YEARS FROM
JUNE 1, 2006, UNLESS THE SECURITIES ARE OTHERWISE SOLD,
TRANSFERRED OR ASSIGNED IN COMPLIANCE WITH ALL APPLICABLE
SECURITIES LAWS, AND THE COMPANY RECEIVES AN OPINION OF
COUNSEL AS TO THE EXEMPTION FROM REGISTRATION OF SUCH SALE,
TRANSFER OR ASSIGNMENT."
The Purchaser acknowledges that there may occasionally be times when
the Company determines that it must suspend the use of the prospectus
forming part of the Registration Statement, as set forth in the
Registration Rights Agreement.
(g) The Purchaser will notify the Company promptly of any sale
of its Shares, other than sales pursuant to a Registration Statement
contemplated in the Registration Rights Agreement, and the Purchaser
will furnish any information reasonably requested by the Company,
including an opinion of counsel reasonably satisfactory to the Company,
to evidence the exemption from the registration requirements of the
Securities Act, the applicable rules and regulations of the Commission
thereunder, and state securities laws, in reliance upon which such
sales have been made.
Ex.1-8
(h) This Agreement has been duly authorized, executed and
delivered by the Purchaser.
(i) The Purchaser will not, prior to August 1, 2006, sell,
offer to sell, solicit offers to buy, dispose of, loan, charge, pledge
or grant any right with respect to (collectively, a "Disposition"), the
Common Shares, nor will the Purchaser engage in any hedging or other
transaction which is designed or could reasonably be expected to lead
to or result in a Disposition of Common Shares by the Purchaser or any
person or entity. Such prohibited hedging or other transaction would
include, without limitation, effecting any short sale or having in
effect a short position (whether such short sale or position is against
the box and regardless of when such position was entered into) or any
purchase, sale or grant of any right (including, without limitation,
any put or call option) with respect to the Common Shares or with
respect to any security (other than a broad-based market basket or
index) that includes or derives any significant part of its value from
the Common Shares. In the event the Company effects a registered
offering or a Rule 144A offering of its Common Shares, or securities
exchangeable for or convertible into its Common Shares, the Purchaser
will not engage in a Disposition of its Common Shares, nor will the
Purchaser engage in any hedging or other transaction which is designed
or could reasonably be expected to lead to or result in a Disposition
of Common Shares by the Purchaser or any person or entity for the same
period of time that the Company agrees not to effect such Disposition.
(j) The Purchaser will hold in confidence all information
concerning this Agreement and the placement of shares hereunder and
under any other Agreements until the Company has made a public
announcement concerning this Agreement, or this Agreement is
terminated. Purchaser acknowledges that for purposes of the foregoing,
"hold in confidence" shall include not trading securities of the
Company.
(k) The Purchaser covenants that it shall use its best efforts
to make, as promptly as practicable, an appropriate filing of a HSR
Notification and Report Form pursuant to the HSR Act with respect to
the sale of the Tranche B Shares contemplated hereby, to seek early
termination of such waiting period under the HSR Act and, except with
the prior written consent of the Company, not to extend any waiting
period under the HSR Act or to enter into any agreement with the U.S.
Federal Trade Commission or the Antitrust Division of the U.S.
Department of Justice not to consummate the sale of the Tranche B
Shares contemplated hereby.
Ex.1-9
(l) The Purchaser represents that, to its knowledge, after
giving effect to the sale and purchase of Shares pursuant to this
Agreement, neither it nor any Purchaser Affiliate will be a "United
States shareholder" of the Company within the meaning of Section 951(b)
of the Internal Revenue Code of 1986, as amended.
(m) The Purchaser represents that, to its knowledge, neither
it nor any Purchaser Affiliate is a direct or indirect insured with
respect to a policy of insurance or reinsurance issued by Montpelier
Re, within the meaning of Section 953(c)(2) of the Internal Revenue
Code of 1986, as amended.
(n) On or prior to the Tranche A Closing Date, the Purchasers
will have entered into the Registration Rights Agreement.
8. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) business day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(a) if to the Purchasers, at its address on the signature page hereto;
(b) if to the Company, to:
Montpelier Re Holdings Ltd.
0 Xxx-Xx-Xxxxx Xxxx
P.O. Box HM 2079
Xxxxxxxx, XX HX
Bermuda
Attn: General Counsel
Fax: 000-000-0000
or to such other address as such person may have furnished to the other persons
identified in this Section 8 in writing in accordance herewith.
9. Severability. If any term provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the same
Ex.1-10
result as that contemplated by such term, provision, covenant or restriction, it
being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
10. Modification; Amendment. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented unless pursuant to an instrument in writing signed by the Company
and the Purchasers.
11. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
with respect to the subject matter contained herein. Except as provided in this
Agreement, there are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to such matters.
This Agreement supersedes all prior agreements and undertakings among the
parties with respect to such matters. No party hereto shall have any rights,
duties or obligations other than those specifically set forth in this Agreement.
12. Counterparts. This Agreement may be signed in any number of
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. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York
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.
15. Consent to Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
the United States District Court for the Southern District of New York or any
other New York State court sitting in New York City, and each of the parties
hereby consents to the non-exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8 shall be deemed
effective service of process on such party.
Ex.1-11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
WLR Recovery Fund II, L.P.
By: WLR Recovery Associates II LLC
By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Managing Member
Address: 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Per Share Purchase Price: $14.50
--------------------
Number of Tranche A Shares: 327,586
------------------
Aggregate Tranche A Purchase Price: $4,749,997
---------
Number of Tranche B Shares: 327,586
------------------
Aggregate Tranche B Purchase Price: $4,749,997
----------
Tax ID No. 00-0000000
-----------------------------------
Contact Name: Xxxxxxx Xxxxxxx, Chief
Financial Officer.
Telephone: (000) 000 0000
-----------------------------------
Fax: (000) 000 0000
-----------------------------------------
Name in which the Shares should be registered
(if different):________________________________
Relationship between the
Purchaser and the person or
entity in whose name the
Shares should be registered
(if different):________________________________
_______________________________________________
Ex.1-12
I IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
WLR Recovery Fund III, L.P.
WLR Recovery Associates III LLC
By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Managing Member
Address: 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Per Share Purchase Price: $14.50
---------------------
Number of Tranche A Shares: 3,120,690
------------------
Aggregate Tranche A Purchase Price:$45,250,003
-----------
Number of Tranche B Shares: 3,120,690
--------------------
Aggregate Tranche B Purchase Price:$45,250,003
-----------
Tax ID No.: 00-0000000
------------------------------------
Contact Name: Xxxxxxx Xxxxxxx, Chief
Financial Officer.
Telephone: (000) 000 0000
-----------------------------------
Fax: (000) 000 0000
-----------------------------------------
Name in which the Shares should be registered
(if different):________________________________
Relationship between the
Purchaser and the person or
entity in whose name the
Shares should be registered
(if different):________________________________
_______________________________________________
Ex.1-13
Agreed to and Accepted by:
MONTPELIER RE HOLDINGS LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CFO
Ex.1-14
EXHIBIT A
OPINIONS OF COUNSEL FOR THE COMPANY
The opinions of counsel for the Company, to be delivered pursuant to
Section 5(b) of the Purchase Agreement shall be substantially to the effect (but
may include assumptions and exceptions customary in such opinions) that:
(A) The Company is duly incorporated and existing under the laws of
Bermuda in good standing (meaning solely that it has not failed to make any
filing with any Bermuda governmental authority, or to pay any Bermuda government
fee or tax, which would make it liable to be struck off the Register of
Companies and thereby cease to exist under the laws of Bermuda).
(B) The Company has the necessary corporate power and authority to
execute, deliver and perform its obligations under the Purchase Agreement and
the Registration Rights Agreement and the necessary corporate power to conduct
its business as described in Item 1 of the Company's Annual Report on Form 10-K
for the year ended December 31, 2005 (the "Form 10-K").
(C) The Company has taken all corporate action required to authorise
its execution, delivery and performance of the Purchase Agreement and the
Registration Rights Agreement. The Purchase Agreement and the Registration
Rights Agreement have been duly executed and delivered by or on behalf of the
Company, and constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with the terms thereof.
(D) Based solely upon a review of the register of members of the
Company dated o, prepared by The Bank of New York, the branch registrar of the
Company, the issued share capital of the Company consists of o common shares par
value US 1/6 cent per share, each of which is validly issued, fully paid and
non-assessable (which term when used herein means that no further sums are
required to be paid by the holders thereof in connection with the issue
thereof). When issued and paid for in accordance with the Purchase Agreement,
the Shares to be sold by the Company will be validly issued, fully paid and
non-assessable and will not be subject to any pre-emptive or similar rights.
(E) The statements contained in the Form 10-K under the captions on
Schedule I, to the extent that they constitute statements of Bermuda law, are
accurate in all material respects.
(F) Assuming the Purchase Agreement and the Registration Rights
Agreement have been duly executed and delivered by or on behalf of the Company,
the Agreements are enforceable against the Company in accordance with the terms
Ex.1-15
thereof, except that no opinion need be expressed as to the indemnity and
contribution provisions thereof.
(G) Based upon the representations, warranties and agreements of the
Company in Section 6(m) of the Purchase Agreement and the Purchasers in Section
7 of the Purchase Agreement, it is not necessary in connection with the offer,
sale and delivery of the Shares to the Purchasers under the Purchase Agreement
to register the Shares under the Securities Act, it being understood that no
opinion is expressed as to any subsequent resale of any Shares.
Ex.1-16
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
Ex.1-17
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
DATED MAY 25, 2006
AMONG
MONTPELIER RE HOLDINGS LTD.,
WLR RECOVERY FUND II, L.P.
AND
WLR RECOVERY FUND III, L.P.
Ex.1-18
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into May 25, 2006 among MONTPELIER RE HOLDINGS LTD., a Bermuda company
(the "COMPANY"), WLR RECOVERY FUND II, L.P., and WLR RECOVERY FUND III, L.P.
(each, a "SHAREHOLDER" and collectively, the "SHAREHOLDERS").
W I T N E S S E T H:
WHEREAS, the Shareholders have agreed to purchase up to 6,896,552
common shares of the Company (subject to certain adjustments provided for in the
Purchase Agreement), par value 1/6 cent per share (the "COMMON SHARES"); and
WHEREAS, the parties hereto desire to enter into this Agreement to
memorialize the agreement between the parties with respect to the Shareholders'
right to have their Common Shares registered under the Securities Act of 1933,
as amended.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 . Definitions. (a) The following terms, as used herein,
have the following meanings:
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"HOLDER" means any of the Shareholder or a Permitted Transferee if, at
any time, such Person then owns Registrable Securities.
"INITIAL OWNERSHIP" means, with respect to the Shareholders and their
Permitted Transferees, the number of Registrable Securities purchased by the
Shareholders pursuant to the Purchase Agreement between the Company and the
Shareholders, dated as of May 25, 2006 (the "PURCHASE AGREEMENT"), taking into
account any share subdivision, share dividend, share distribution, share
consolidation or similar event.
"PARTICIPATING HOLDERS" means Holders electing to sell Registrable
Securities pursuant to a Shelf Takedown.
Ex.1-19
"PERMITTED TRANSFEREE" includes (A) with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person; (B) any purchaser of the Registrable Securities from
the Shareholders for an aggregate purchase price of at least $30 million; and
(C) any shareholder of a Shareholder who receives such Registrable Securities
upon a distribution in kind by the Shareholder, provided, in each case, that
such Person, purchaser, or shareholder shall become a party to this Agreement.
For the purpose of this definition, the term "CONTROL" (including, with
correlative meanings, the terms "CONTROLLING", "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"PERSON" means an individual, company, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"REGISTRABLE SECURITIES" means, at any time, any Common Shares then
owned by the Shareholders or a Permitted Transferee that was included in the
Initial Ownership, and any other securities issued in exchange for or as
distribution or dividend with respect to Common Shares included in the Initial
Ownership and then owned by the Shareholders or a Permitted Transferee, until
the earliest of (i) a registration statement covering such securities has been
declared effective by the SEC and such Common Shares have been disposed of
pursuant to such effective registration statement, (ii) such Common Shares are
eligible to be sold pursuant to Rule 144(k) (or any similar provision then in
force) of the Securities Act, or (iii) such securities cease to be issued and
outstanding.
"REGISTRATION EXPENSES" means (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of Registrable Securities), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting duties
and all expenses of "roadshow" and marketing efforts for the relevant offering),
(v) reasonable fees and disbursements of counsel for the Company and customary
fees and expenses for independent certified public accountants retained by the
Company (including the expenses of any comfort letters or costs associated with
the delivery by independent certified public accountants of a comfort letter or
comfort letters requested pursuant to Section 2.03(g)), (vi) the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, (vii) reasonable fees and expenses of one U.S. securities law
counsel (and one local counsel in each non-U.S. jurisdiction for each
Participating Holder that is not a U.S. Person) for Participating Holders
selected by the Participating Holders, (viii) reasonable fees and expenses in
Ex.1-20
connection with any review of underwriting arrangements by the National
Association of Securities Dealers, Inc., and (ix) fees and disbursements of
underwriters customarily paid by issuers or sellers of securities; provided
however that "Registration Expenses" shall not include (a) underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities, (b)
out-of-pocket expenses (except as set forth in clause (vii) above) of
Participating Holders (or the agents who manage their accounts), or (c) fees and
expenses of underwriter's counsel (except as set forth in clause (ii) and (viii)
above).
"RULE 415" means Rule 415 under the Securities Act or any substitute
rule that may be adopted by the SEC.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.01 . Shelf Takedown. (a) The Company shall file with the SEC
an automatic shelf registration statement pursuant to Rule 415 on Form S-3 (a
"SHELF REGISTRATION STATEMENT") and shall cause such Shelf Registration
Statement to become effective by August 1, 2006. The Company shall use
reasonable efforts to cause such Shelf Registration Statement to remain
effective for so long as the Common Shares purchased by the Shareholders
constitute Registrable Securities.
(b) At any time after August 1, 2006, if the Company shall receive a
written request by a Holder (such requesting Holder, a "SELLING SHAREHOLDER")
that the Company effect the offering under the Securities Act of all or a
portion of such Selling Shareholder's Registrable Securities, and specifying the
intended method of disposition thereof, then the Company shall use its best
efforts to effect an offering of such Registrable Securities (a "SHELF
TAKEDOWN") so as to permit the disposition of such Registrable Securities in
accordance with the intended methods thereof as aforesaid; provided that,
subject to Section 2.01(g) hereof, the Company shall not be obligated to effect
more than four Shelf Takedowns for the Shareholders and their Permitted
Transferees; provided further that the Company shall not be obligated to effect
a Shelf Takedown unless the aggregate proceeds expected to be received from the
sale of the Registrable Securities to be included in such Shelf Takedown, in the
reasonable opinion of the Board, equals or exceeds $30,000,000; and provided
further that the Company shall not, in any event, be required to effect more
than one Shelf Takedown pursuant to this Section 2.01(b) within any six month
period.
Ex.1-21
(c) In addition, if a Selling Shareholder delivers a request of a Shelf
Takedown pursuant to Section 2.01(b), the Company shall have the right to
preempt such Shelf Takedown by delivering written notice (within five business
days after the Company has received from the Selling Shareholder a request for
such Shelf Takedown) to the Selling Shareholder of the Company's intention to do
a primary offering of its Common Shares, or of securities convertible into or
exchangeable for its Common Shares, and the Company shall use all commercially
reasonable efforts to effect such offering within 45 days of such notice. In the
event that the Company delivers such preemption notice, the Selling Shareholder
may request within three business days to be included in a "marketed" offering
of the Company's Common Shares. If the managing underwriter of an offering
advises the Company in writing, with a copy to be provided to the Selling
Shareholder that, in its view, the aggregate number of Registrable Securities to
be included in such marketed offering (including any securities which the
Company proposes to be included which are not Registrable Securities) exceeds
the largest number of securities which can be sold without materially and
adversely affecting the price or likely success of such offering (the "MAXIMUM
OFFERING SIZE"), the Company will include in such marketed offering, in the
priority listed below, up to the Maximum Offering Size:
(A) first, all securities proposed to be offered by the
Company; and
(B) second, any Registrable Securities requested to be
included in such offering by the Selling Shareholder.
In the event that the Company delivers a preemption notice, and the
Company intends to do a primary offering of its Common Shares, or of securities
convertible into or exchangeable for its Common Shares, in a "block trade" or
"bought" transaction, then the Selling Shareholder may not request to be
included in the offering. The Company shall use all commercially reasonable
efforts to effect such offering within ten business days of such preemption
notice, the Company will advise the Selling Shareholder promptly when the
Company's offering is completed and the Selling Shareholder's rights will be
reinstated in full, subject to the other provisions of this Agreement.
(d) Upon the Company's preemption of a requested Shelf Takedown, unless
the Selling Shareholder sells all the Registrable Securities that it request to
sell pursuant to Section 2.01(c) hereof, such requested offering will not count
as a Shelf Takedown. The Company shall not be entitled to exercise its right of
preemption more than one (1) time in any six-month period, unless the Selling
Shareholder elects to sell its Registrable Securities pursuant to Section
2.01(c) hereof, in which case such preemption notice will not count as an
exercise of its right of preemption.
Ex.1-22
(e) The Selling Shareholder requesting an offering under this Section
may, at any time prior to the pricing of the Registrable Securities being
offered, revoke such request, without liability to any Holders, by providing a
written notice to the Company revoking such request, in which case such request,
so revoked, shall be considered a Shelf Takedown unless the Selling Shareholder
reimburses the Company for all Registration Expenses incurred by the Company in
connection with such Shelf Takedown, in which case such request shall not be
considered a Shelf Takedown.
(f) Subject to Section 2.01(e) above, the Company will pay all
Registration Expenses in connection with any Shelf Takedown.
(g) A Shelf Takedown requested pursuant to this Section shall not be
deemed to have been effected unless the registration statement relating thereto
(A) has become effective under the Securities Act and (B) has remained effective
until such time as the Registrable Securities included in such registration have
actually been sold thereunder; provided that if after any Shelf Takedown is
requested pursuant to this Section the registration statement is interfered with
by any stop order, injunction or other order or requirement of the SEC or other
governmental agency or court, such a Shelf Takedown shall not be deemed to have
been effected and any such Shelf Takedown shall not be included or counted in
the number of Shelf Takedowns that may be requested pursuant to Section 2.01
until completed.
SECTION 2.02 . Holdback Agreements. (a) Notwithstanding anything
contained herein, each Shareholder (and any Permitted Transferee) agrees that it
will not, prior to August 1, 2006, sell, offer to sell, solicit offers to buy,
dispose of, loan, charge, pledge or grant any right with respect to
(collectively, a "DISPOSITION"), the Common Shares, nor will each Shareholder
(or any Permitted Transferee) engage in any hedging or other transaction which
is designed or could reasonably be expected to lead to or result in a
Disposition of Common Shares by such Shareholder (or any Permitted Transferee)
or any person or entity. Such prohibited hedging or other transaction would
include, without limitation, effecting any short sale or having in effect a
short position (whether such short sale or position is against the box and
regardless of when such position was entered into) or any purchase, sale or
grant of any right (including, without limitation, any put or call option) with
respect to the Common Shares or with respect to any security (other than a
broad-based market basket or index) that includes or derives any significant
part of its value from the Common Shares. In the event the Company effects a
registered offering of Common Shares or a Rule 144A offering, or securities
exchangeable for or convertible into its Common Shares, each Shareholder (and
any Permitted Transferee) will not engage in a Disposition of its Common Shares,
nor will such Shareholder (or any Permitted Transferee) engage in any hedging or
other transaction which is designed or could reasonably be expected to lead to
or result in a Disposition of Common Shares by the Shareholder (or any Permitted
Ex.1-23
Transferee) or any person or entity for the same period of time that the Company
agrees not to effect such Disposition.
SECTION 2.03 . Shelf Takedown Procedures.
(a) Whenever Holders request that any Registrable Securities be offered
pursuant to Section 2.01, the Company will, subject to the provisions of such
Section, within five business days of receipt of such written notice prepare a
prospectus supplement or preliminary prospectus supplement, and furnish such
prospectus supplement to Participating Holders and each underwriter, if any, of
the Registrable Securities; provided that if the Company shall furnish to
Participating Holders a certificate signed by the Company's Chairman or
President stating that in the good faith judgment of the Company's Board it
would be seriously detrimental to the Company or its shareholders to effect an
offering of Registrable Securities at such time, the Company may postpone for a
period of no more than 60 days (provided that the Company may not defer any such
offering of Registrable Securities pursuant to this clause more than twice in
any twelve-month period); and provided further that if an offering of
Registrable Securities would otherwise take place after the end of the Company's
fiscal quarter or fiscal year, as the case may be, and before the Company files
it annual report on Form 10-K or quarterly report on Form 10-Q for such period,
as the case may be, then the Company may delay such offering until after the
Company files its Form 10-K or Form 10-Q for such period, as the case may be.
(b) After the filing of a Shelf Registration Statement, the Company
will promptly notify each Participating Holder of any stop order issued or
threatened by the SEC and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.
(c) The Company will use its best efforts to (i) register or qualify
the Registrable Securities covered by such prospectus supplement under such
other securities or blue sky laws of such jurisdictions in the United States as
any Participating Holder reasonably (in light of such Holder's intended plan of
distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Company and
do any and all other acts and things that may be reasonably necessary or
advisable to enable Participating Holders to consummate the disposition of their
Registrable Securities; provided that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d), (B) subject itself
to taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.
Ex.1-24
(d) The Company will immediately notify each Participating Holder, at
any time prior to the completion of the offering of the Registrable Securities,
of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus supplement (including documents incorporated by
reference therein) so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus supplement (including documents
incorporated by reference therein) will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and promptly prepare
and make available to each Participating Holder any such supplement or
amendment.
(e) Participating Holders shall have the right to select the managing
underwriters and any additional investment bankers and managers to be used in
connection with a Shelf Takedown, subject to the Company's approval. The Company
and each Participating Holder will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of
Registrable Securities pursuant to this Agreement.
(f) The Company will make available for inspection by any underwriter
participating in any offering of Registrable Securities pursuant to this
Agreement and any attorney or other professional retained by any such
underwriter (collectively, the "ADVISORS"), all financial and other records and
pertinent corporate documents and properties of the Company (collectively, the
"RECORDS") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and will supply or make available for inspection all
other information and such management for due diligence sessions as reasonably
requested by any Advisors in connection with such offering. Records that the
Company determines, in good faith, to be confidential and that it notifies the
Advisors are confidential, shall be provided upon the execution of
confidentiality agreements in the form and substance satisfactory to the
Company.
(g) The Company will furnish to each such underwriter, addressed to
such underwriter, (i) an opinion or opinions of counsel to the Company and (ii)
a comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
managing underwriter therefor reasonably requests, it being understood that if
the Company has announced results for a period but not yet filed a report on
Form 10-K or Form 10-Q, as the case may be, then the Company may not be able to
provide a comfort letter with respect to such period's results.
(h) The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
Ex.1-25
shareholders, as soon as reasonably practicable, an earnings statement covering
a period of 12 months, beginning within three months after the completion of an
offering of Registrable Securities, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(i) The Company may require each Participating Holder to promptly
furnish in writing to the Company such information regarding such Holder and the
offering of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such offering.
(j) Each Participating Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
2.03(d) such Participating Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the prospectus supplement covering such
Registrable Securities until such Participating Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 2.03(d) and,
if so directed by the Company, such Participating Holder will deliver to the
Company, or destroy, all copies, other than any permanent file copies then in
such Participating Holder's possession, of the most recent prospectus supplement
covering such Registrable Securities at the time of receipt of such notice.
(k) The Company will use all commercially reasonable efforts to cause
all such Registrable Securities to be listed on each securities exchange or
quoted on each inter-dealer quotation system on which the Common Shares are then
listed or quoted.
SECTION 2.04 . Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Participating Holder, its officers, directors
and agents, and each person, if any, who controls such Holder within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, 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 furnished in writing to the Company by such Holder or on such
Holder's behalf expressly for use therein. The Company also agrees to indemnify
any underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Holders provided in this Section 2.04.
Ex.1-26
SECTION 2.05 . Indemnification by Participating Holders. Each
Participating Holder agrees, severally but not jointly, to indemnify and hold
harmless the Company, its officers, directors and agents 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 to the same extent as the
foregoing indemnity from the Company to such Holder, but only with respect to
information furnished in writing by such Holder or on such Holder's behalf
expressly for use in any prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus. Each such
Holder also agrees to indemnify and hold harmless underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Company provided in this Section 2.05. As a condition to
conducting any offering of Registrable Securities in accordance with Article 2
hereof, each of the Company and Participating Holders may require that it shall
have received an undertaking reasonably satisfactory to it from any underwriter
to indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
SECTION 2.06 . Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
this Article 2 such person (an "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all fees and expenses; provided that the failure of
any Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure to notify. 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 (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) both
the Indemnifying Party and the Indemnified Party are named parties to any such
proceeding and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
Except as provided above, it is understood that the Indemnifying Party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
Ex.1-27
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 shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) 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 arising out of such proceeding.
SECTION 2.07 . Contribution. If the indemnification provided for in
this Article 2 is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between the Company and
the Participating Holders on the one hand and the underwriters on the other, in
such proportion as is appropriate to reflect the relative benefits received by
the Company and such Holders on the one hand and the underwriters on the other,
from the offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the Company and such
Holders on the one hand and of such underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Company on the one hand and each such Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Holder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and such Holders on the one hand and such underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and such Holders bear to the total
underwriting discounts and commissions received by such underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Company and such Holders on the one hand and of such underwriters
on the other 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 and such Holders or by such underwriters. The relative fault of the
Company on the one hand and of each such Holder on the other 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
Ex.1-28
material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 2.07 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 which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or 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 2.07, no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Holder were offered to the
public exceeds the amount of any damages which such Holder 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. Each such Holder's obligation to contribute pursuant to this
Section 2.07 is several in the proportion that the proceeds of the offering
received by such Holder bears to the total proceeds of the offering received by
all such Holders and not joint.
SECTION 2.08 . Participation Limitations. No Person may participate in
a Shelf Takedown hereunder unless such Person (a) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and the provisions of this Agreement in respect of
registration rights.
Ex.1-29
ARTICLE 3
MISCELLANEOUS
SECTION 3.01 . Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof.
SECTION 3.02 . Binding Effect; Benefit. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, successors, assigns and Permitted Transferees. Nothing in this Agreement,
expressed or implied, shall confer on any Person other than the parties hereto,
and their respective heirs, successors, assigns and Permitted Transferees, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 3.03 . Assignability. Other than to Permitted Transferees, no
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement, directly or indirectly, whether by operation
of law or otherwise, without the written consent of the Company, and any
attempted assignment contrary to the terms hereof shall be null and void.
Neither this Agreement nor any provision hereof is intended to confer upon any
Person other than the parties hereto and their Permitted Transferees any rights
or remedies hereunder.
Prior to any transfer of rights to a Permitted Transferee, the
transferring Holder shall provide the Company with notice of the Permitted
Transferee's name and address and the number of Registrable Securities with
respect to which such rights are being transferred. The Permitted Transferee
shall assume the obligations of a Holder under this Agreement in a written
instrument delivered to the Company. If, in connection with such transfer, a
Holder has transferred all of its Registrable Securities to such Permitted
Transferee, then the transferring Holder shall be released from all liability
under this Agreement other than, and solely with regard to, the provisions of
Sections 2.05 and 2.07 of this Agreement in connection with any Shelf Takedown
in which such Holder was a Participating Holder.
SECTION 3.04 . Amendment; Waiver. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by each Holder and the Company, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Ex.1-30
SECTION 3.05 . Notices. All notices, requests and other communications
to any party hereunder shall be in writing via facsimile,
if to the Company, to:
Montpelier Re Holdings Ltd.
0 Xxx-Xx-Xxxxx Xxxx
P.O. Box HM 2079
Xxxxxxxx, XX HX
Bermuda
Attn: General Counsel
Fax: 000-000-0000
if to the Shareholders, to:
WLR Recovery Fund II, L.P.
WLR Recovery Fund III, L.P.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Chief Financial Officer
Fax: 000-000-0000
All notices, requests and other communications shall be deemed received
on the date of receipt by the recipient thereof if received prior to 5 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
Any notice, request or other written communication sent by facsimile
transmission shall be confirmed by certified mail, return receipt requested,
posted within one Business Day, or by personal delivery, whether courier or
otherwise, made within two Business Days after the date of such facsimile
transmission.
Each Permitted Transferee shall provide its address and fax number to
the Company in writing.
Section 3.06 . Headings. The headings contained in this Agreement are
for convenience only and shall not affect the meaning or interpretation of this
Agreement.
Section 3.07 . Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
Ex.1-31
Section 3.08 . Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW RULES OF SUCH STATE.
Section 3.09 . Consent to Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the non-exclusive jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 3.05 shall be deemed
effective service of process on such party.
Ex.1-32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
MONTPELIER RE HOLDINGS LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CFO
WLR RECOVERY FUND II, L.P.
By: /s/ Xxxxxx X. Xxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Managing Member
WLR RECOVERY FUND III, L.P.
By: /s/ Xxxxxx X. Xxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Managing Member
Ex.1-33
APPENDIX I
MONTPELIER RE HOLDINGS LTD.
SECURITYHOLDER QUESTIONNAIRE
FOR INTENDED SALE OF COMMON SHARES
PURSUANT TO SHELF REGISTRATION STATEMENT
The following questionnaire and agreement (the "QUESTIONNAIRE") elicits
information necessary to prepare a registration statement on Form S-3 (the
"SHELF REGISTRATION STATEMENT") for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the "SECURITIES ACT"), of certain
common shares of Montpelier Re Holdings Ltd. (the "COMPANY") to be filed by the
Company with the Securities and Exchange Commission (the "COMMISSION"), in
accordance with the terms of the Purchase Agreement, dated as of May 25, 2006
(the "PURCHASE AGREEMENT"), between the Company and the undersigned beneficial
owner of common shares of the Company purchased pursuant to such agreement (the
"SECURITYHOLDER"). All capitalized terms not otherwise defined herein shall have
the meaning ascribed thereto in the Purchase Agreement.
In order to sell or otherwise dispose of any Shares pursuant to the
Shelf Registration Statement, you generally will be required to be named as a
selling securityholder in the related prospectus, deliver a prospectus to
purchasers of the Shares and be bound by the provisions of the Purchase
Agreement (including certain indemnification provisions, as described below). IF
YOU DO NOT COMPLETE THIS QUESTIONNAIRE AND DELIVER IT TO THE COMPANY AS PROVIDED
BELOW YOU WILL NOT BE NAMED AS A SELLING SECURITYHOLDER IN THE PROSPECTUS AND
THEREFORE WILL NOT BE PERMITTED TO SELL ANY SHARES PURSUANT TO THE SHELF
REGISTRATION STATEMENT. Please complete and deliver this Questionnaire to
Xxxxxxxx X. Xxx, General Counsel of Montpelier Re Holdings Ltd., as soon as
possible and in any event no later than June 1, 2006.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of the Shares are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling securityholder in the Shelf Registration Statement
and the related prospectus.
The Securityholder, by signing and returning this Questionnaire,
understands that it will be bound by the terms and conditions of this
Questionnaire and the Purchase Agreement.
Ex.1-34
Pursuant to the Purchase Agreement, the undersigned has agreed to
indemnify and hold harmless the Company, any of its directors and officers who
sign the Shelf 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 Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), from
and against certain losses arising in connection with statements concerning the
undersigned made in the Company's Shelf Registration Statement or the related
prospectus in reliance upon the information provided in this Questionnaire.
The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
Ex.1-35
QUESTIONNAIRE
1. (a) Full Legal Name of Securityholder:(1)
------------------------------------------------------
(b) Except as set forth below in this Item 1(b), the
undersigned does not hold any or all of the Shares on behalf
of another person or entity.
State any exceptions here:
------------------------------------------------------
2. Address of Securityholder:
------------------------------------------------------
------------------------------------------------------
Telephone: __________________________
Fax: ________________________________
Contact Person: _______________________
3. Beneficial Ownership:
Immediately after the Closing, there will be no equity
securities of the Company of which the undersigned will be the
"BENEFICIAL OWNER"(2), except as set forth below in this Item
3. The disclosure indicates the amount of equity securities
which the undersigned beneficially owns, which it has a right
to acquire within 60 days after the Closing Date, and as to
which it has sole voting power, shared voting power, sole
investment power or shared investment power.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
--------------
(1) If this Questionnaire is being completed by or on behalf of a
person other than an individual, the entity on whose behalf the Questionnaire is
being completed should be stated.
(2) Defined in Appendix A.
Ex.1-36
4. Except as set forth below in this Item 4, the undersigned
wishes that all the Shares held by it be offered for the
account of the undersigned in the Registration Statement.
State any exceptions here:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
5. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of
its affiliates, officers, directors or principal equity
holders (5% or more) has held any position or office or has
had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.
State any exceptions here:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
6. Plan of Distribution:
Except as set forth below, the undersigned (including its
donees or pledgees) intends to distribute the Shares pursuant
to the Shelf Registration Statement only as follows (if at
all): Such Shares may be sold from time to time directly by
the undersigned or, alternatively, through underwriters,
broker-dealers or agents. If the Shares are sold through
underwriters or broker-dealers, the Securityholder will be
responsible for underwriting discounts or commissions or
agent's commissions. Such Shares may be sold in one more or
transactions at fixed prices, at prevailing market prices at
the time of sale, at varying prices determined at the time of
sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve block transactions) (i) on any
Ex.1-37
national securities exchange or quotation service on which the
Shares may be listed or quoted at the time of sale, (ii) in
the over-the-counter market, (iii) in transactions otherwise
than on such exchanges or services or in the over-the-counter
market, or (iv) through the writing of options. In connection
with sales of the Shares or otherwise, the undersigned may
enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the Shares in the course of
hedging positions they assume. The undersigned may also sell
Shares short and deliver Shares to close out short positions,
or loan or pledge Shares to broker-dealers that in turn may
sell such securities.
State any exceptions here:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Note: In no event will such method(s) of distribution take the
form of an underwritten offering of the Shares without the
prior agreement of the Company.
7. State below whether the undersigned is a "MEMBER"(3) of the
National Association of Securities Dealers, Inc. ("NASD"), a
"PERSON ASSOCIATED WITH A MEMBER", a direct or indirect
"AFFILIATE" of a "MEMBER" or an "UNDERWRITER OR RELATED
PERSON" with respect to the proposed offering.(4) If the
undersigned is a general or limited partnership, a "No" reply
shall be assumed to confirm that no relationship exists for
the undersigned as well as each of its general or limited
partners.(5)
Yes____________________ No____________________
-----------------
(3) Highlighted terms in this Item are defined in Appendix A.
(4) NASD Rule 2710(b)(6)(A)(iii).
(5) Item 6 need only be answered if either (i) the Securityholder is an
affiliate of the Company, or (ii) the sale of Shares under the Shelf
Registration Statement requires clearance from the NASD.
Ex.1-38
If yes, identify the NASD member and describe the relationship
with the NASD member, including in the case of a general or
limited partner, the identity of the partner.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules thereunder relating
to stock manipulation, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of the Shares pursuant to
the Shelf Registration Statement. The undersigned agrees that neither it nor any
person acting on its behalf will engage in any transaction in violation of such
provisions.
In accordance with the undersigned's obligation under the Purchase
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items 1 through 6 above and the
inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Questionnaire to be executed and delivered either in person or by
its duly authorized agent.
Dated:
[NAME OF SECURITYHOLDER]
By: ________________________________
Name:___________________________
Title:__________________________
Ex.1-39
APPENDIX A
DEFINITIONS OF TERMS USED
1. You are the "BENEFICIAL OWNER" of a security if you directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise, have or share: (i) voting power which includes the power to vote, or
to direct the voting of, such security, or (ii) investment power which includes
the power to dispose, or to direct the disposition of, such security. You are
deemed the beneficial owner of a security if you, directly or indirectly, create
or use a trust, proxy, power of attorney, pooling arrangement or any other
contract, arrangement, or device with the purpose or effect of divesting
yourself of beneficial ownership of a security or preventing the vesting of such
beneficial ownership. Finally, you are deemed to be the beneficial owner of a
security if you have the right to acquire beneficial ownership of such security
at any time within sixty days, including but not limited to any right to acquire
(a) through the exercise of any option, warrant or right, or (b) through the
conversion of a security, or (c) pursuant to the power to revoke a trust,
discretionary account, or similar arrangement, or (d) pursuant to the automatic
termination of a trust, discretionary account or similar arrangement. If you
have acquired any security or power specified in (a), (b) or (c) above, with the
purpose or effect of changing or influencing the control of the issuer, or in
connection with or as a participant in any transaction having such purpose or
effect, then immediately upon such acquisition you are deemed to be the
beneficial owner of the securities which may be acquired through the exercise or
conversion of such security or power.
All securities of the same class that are beneficially owned by you,
regardless of the form which such beneficial ownership takes, must be aggregated
in calculating the number of shares beneficially owned by you.
The above definition is broad and although you may not actually have or
share voting or investment power with respect to securities owned by persons in
your family or living in your home, you should include such shares in your
beneficial ownership disclosure, and then, as appropriate, disclaim beneficial
ownership of such securities.
2. The term "UNDERWRITER OR RELATED PERSON" includes, with respect to a
proposed offering, any underwriter, underwriter's counsel, financial consultant
and advisors, finders, members of the selling or distribution group, any member
participating in the proposed offering and any and all other persons associated
with or related to and members of the immediate family of any of such persons.
NASD Rule 2710(a)(6).
3. The NASD defines a "MEMBER" as being either any broker or dealer
admitted to membership in the NASD or any individual, partnership, corporation
Ex.1-40
or other legal entity admitted to membership in the NASD under the provisions of
Articles III and IV of the By-laws. NASD Rule 0120(i).
4. The NASD defines a "PERSON ASSOCIATED WITH A MEMBER" as being every
sole proprietor, general or limited partner, officer, director or branch manager
of any member, or any natural person occupying a similar status or performing
similar functions, or any natural person engaged in the investment banking or
securities business who is directly or indirectly controlling or controlled by
such member (for example, any employee), whether or not any such person is
registered or exempt from registration with the NASD. Thus, "PERSON ASSOCIATED
WITH A MEMBER" includes a sole proprietor, general or limited partner, officer,
director or branch manager of an organization of any kind (whether a
corporation, partnership or other business entity) which itself is a "MEMBER" or
a "PERSON ASSOCIATED WITH A MEMBER". In addition, an organization of any kind is
a "PERSON ASSOCIATED WITH A MEMBER" if its sole proprietor or any one of its
general or limited partners, officers, directors or branch managers is a
"MEMBER" or "PERSON ASSOCIATED WITH A MEMBER". (Article I of the NASD By-Laws.)
5. The NASD defines "AFFILIATE" to include a company which controls, is
controlled by or is under common control with a member. A company is presumed to
control a member if the company beneficially owns 10 percent or more of the
outstanding voting securities of a member which is a corporation, or
beneficially owns a partnership interest in 10 percent or more of the
distributable profits or losses of a member which is a partnership. A company is
presumed to be controlled by a member if the member and persons associated with
the member beneficially own 10 percent or more of the outstanding voting
securities of a company which is a corporation, or beneficially own a
partnership interest in 10 percent or more of the distributable profits or
losses of a company which is a partnership. A company is presumed to be under
common control with a member if (i) the same natural person or company controls
both the member and company by beneficially owning 10 percent or more of the
outstanding voting securities of a member or company which is a corporation, or
by beneficially owning a partnership interest in 10 percent or more of the
distributable profits or losses of a member or company which is a partnership or
(ii) a person having the power to direct or cause the direction of the
management or policies of the member or the company also has the power to direct
or cause the direction of the management or policies of the other entity in
question. NASD Rule 2720(b)(1).
Ex.1-41
