MAIDEN HOLDINGS, LTD. 45,000,000 Shares of Common Stock PURCHASE/PLACEMENT AGREEMENT June 26, 2007
EXHIBIT
1.1
EXECUTION
COPY
45,000,000
Shares of Common Stock
PURCHASE/PLACEMENT
AGREEMENT
June
26, 2007
PURCHASE/PLACEMENT
AGREEMENT
June
26,
2007
FRIEDMAN,
BILLINGS, XXXXXX & CO., INC.
0000
00xx
Xxxxxx Xxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Dear
Sirs:
Maiden
Holdings, Ltd., a Bermuda company limited by shares (the “Company”),
proposes to issue and sell to you, Friedman, Billings, Xxxxxx & Co., Inc.
(“FBR”),
as
initial purchaser, a number of shares of the Company’s common stock, par value
$0.01 per share (the “Common
Stock”)
equal
to 45,000,000 shares less the number of Regulation D Shares sold in the Private
Placement (each as defined herein) (the “144A/Regulation S
Shares”).
FBR
will
also act as the Company's sole placement agent in connection with the Company's
offer and sale to certain “Accredited Investors” (as such term is defined in
Regulation D (“Regulation
D”)
under
the Securities Act of 1933, as amended (the “Securities
Act”)
of (a)
that number of shares of Common Stock equal to the difference between
45,000,000
shares
and the number of 144A/Regulation S Shares (the “Regulation
D Shares”
and,
together with the 144A/Regulation S Shares, the “Initial
Shares”),
and
(b) the Placed Option Shares (as defined herein), as set forth in the Final
Memorandum (as defined herein) under the headings “Plan of Distribution”’ and
“Private Placement”. The offer and sale of the shares described in the first
sentence of this paragraph (the “Private
Placement Shares”)
is
referred to herein as the “Private
Placement”.
In
addition, the Company proposes to grant to you the option described in
Section 1(c) hereof to purchase or place all or any part of 6,750,000
additional
shares of Common Stock (the “Option
Shares”
and,
together with the Initial Shares, the “Shares”)
to
cover additional allotments, if any.
The
offer
and sale of the Shares to you and to the Accredited Investors, respectively,
will be made without registration of the Shares under the Securities Act and
the
rules and regulations thereunder (the “Securities
Act Regulations”),
in
reliance upon the exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereof. You have advised the Company that you
will
make offers and sales (“Exempt
Resales”)
of the
144A/Regulation S Shares and the Purchased Option Shares (as defined
herein) purchased by you hereunder (such shares referred to collectively herein
as “Resale
Shares”)
in
accordance with Section 3 hereof on the terms set forth in the Final Memorandum
(as defined herein), as soon as you deem advisable after this Agreement has
been
executed and delivered.
1
In
connection with the offer and sale of the Shares, the Company has prepared
a
preliminary offering memorandum, subject to completion, dated June 7, 2007
(the
“Preliminary
Memorandum”),
each
of the supplements to the Preliminary Memorandum, dated June 21, 2007 and June
26, 2007, respectively (each a “Supplement”
and,
collectively, the “Supplements”)
and a
final offering memorandum, dated the date hereof and as it may be amended or
supplemented from time to time (the “Final
Memorandum”).
Each
of the Preliminary Memorandum, the Supplements and the Final Memorandum sets
forth certain information concerning the Company and the Shares. The Company
hereby confirms that it has authorized the use of the Preliminary Memorandum,
the Supplements and the Final Memorandum in connection with (i) the
offering and resale of the Resale Shares by FBR and by all dealers to whom
Resale Shares may be sold and (ii) the Private Placement. Any references to
the Preliminary Memorandum, the Supplements or the Final Memorandum shall be
deemed to include all exhibits and annexes thereto.
It
is
understood and acknowledged that holders (including subsequent transferees)
of
the Shares will have the registration rights set forth in the registration
rights agreement between the Company and FBR, which shall be in substantially
the form attached hereto as Exhibit A
and
dated as of the Closing Time (as defined herein) (the “Registration
Rights Agreement”),
for
so long as their Shares constitute “Registrable Shares” (as defined in the
Registration Rights Agreement).
Pursuant
to, and subject to the terms of, the Registration Rights Agreement, the Company
will agree to file with the Securities and Exchange Commission (the
“Commission”),
under
the circumstances set forth therein, (i) a registration statement on
Form S-1 under the Securities Act for the initial public offering of Common
Stock that includes the resale by holders of the Registrable Shares (if any
holders of Registrable Shares so request) and/or (ii) a shelf registration
statement on Form S-1 or such other appropriate form pursuant to Rule 415
under the Securities Act relating to the resale by holders of the Registrable
Shares, and to use its best efforts to cause any such registration statement
to
be declared effective.
The
Company and FBR agree as follows:
1.
Sale
and Purchase.
(a) 144A/Regulation S
Shares.
Upon the
basis of the warranties and representations and other terms and conditions
herein set forth, the Company agrees to issue and sell to FBR and FBR agrees
to
purchase from the Company the 144A/Regulation S Shares at a purchase price
of
$9.30 per share (the “144A/Regulation S
Purchase Price”).
(b) Regulation
D Shares.
The
Company agrees to issue and sell the Regulation D Shares and, to the extent
that
FBR exercises the option described in Section 1(c), the Placed Option Shares,
for which the Accredited Investors have subscribed pursuant to the terms and
conditions set forth in the subscription agreements substantially in the forms
attached to the Preliminary Memorandum as Annex III and Annex IV, as
applicable (each a “Subscription
Agreement”).
The
Private Placement Shares will be sold by the Company pursuant to this Agreement
at a price of $10.00 per share (the “Regulation
D Purchase Price”).
As
compensation for the services to be provided by FBR in connection with the
Private Placement, the Company shall pay to FBR at each of the Closing Time,
the
Extended Closing Time (as defined herein), to the extent applicable and any
Secondary Closing Time (as defined herein), to the extent applicable, an amount
equal to $0.70 per Private Placement Share sold at such time (the “Placement
Fee”).
2
(c) Option
Shares. Upon
the
basis of the representations and warranties and
subject
to the other terms and conditions herein set
forth, the Company hereby grants an option to FBR to (i) purchase from the
Company, as initial purchaser, up to an aggregate of 6,750,000 Option
Shares
at
the 144A/Regulation S Purchase Price per share (the
“Purchased
Option Shares”);
and
(ii) place, as exclusive placement agent for the Company, up to that number
of Option
Shares
remaining, after subtracting any Purchased Option Shares with respect to which
FBR has exercised its option pursuant to clause (i), at the Regulation D
Purchase Price per share (the
“Placed
Option Shares”).
The
option granted
hereby will expire thirty (30) days after the date hereof and may
be
exercised in whole or in part from time to time in one or more installments,
including at the Closing Time, only for the purpose of covering additional
allotments which may be made
in
connection with the offering and distribution of
the
Initial Shares upon written notice
by
FBR to the Company setting forth (i) the number of
Option
Shares as to which FBR
is
then exercising the option, (ii) the names and
denominations to which the Option Shares are to be delivered in book-entry
form
through the facilities of The Depository Trust Company (“DTC”),
(iii) the number of Option Shares that will be Purchased Option Shares and
the number of Option Shares that will be Placed Option Shares, and (iv) the
time and date
of
payment for and delivery of such
Option Shares in book-entry form. Any such time and date of delivery shall
be
determined by FBR, but shall not
be
later than five (5) full business days nor earlier
than one (1) full business day after
the
exercise of said option, nor in any event prior
to
the Closing Time,
unless
otherwise agreed in writing by FBR and
the
Company.
2.
Payment
and Delivery.
(a) 144A/Regulation
S Shares.
The
closing of FBR’s purchase of the 144A/Regulation S Shares shall be held at the
office of Sidley Austin LLP,
000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (unless another place shall be agreed
upon by FBR and the Company). At the closing, subject to the satisfaction or
waiver of the closing conditions set forth herein, FBR shall pay to the Company
the aggregate purchase price for the 144A/Regulation S Shares by wire transfer
of immediately available funds to an account previously designated by the
Company in writing against delivery by the Company of the 144A/Regulation S
Shares to FBR for FBR’s account through the facilities of DTC in such
denominations and registered in such names as FBR shall specify. Such payment
and delivery shall be made at 10:00 a.m., New York City time, on the fifth
business day after the date hereof (unless another time, not later than ten
(10)
business days after such date, shall be agreed to by FBR and the Company).
The
time at which such payment and delivery are actually made is hereinafter called
the “Closing
Time”.
(b) Regulation
D Shares.
At
the
Closing Time, subject to the satisfaction of
the
closing conditions set forth herein, FBR shall pay
to
the Company the aggregate applicable purchase price for the Regulation D Shares
received by FBR prior to the Closing
Time (net of any Placement Fee, if the Placement Fee is withheld as provided
in
the immediately following paragraph) against the Company’s
delivery of the Regulation
D Shares to FBR, as placement agent in respect of such shares, in book-entry
form through the facilities of DTC for each
such
Accredited Investor’s account. At
FBR’s
option, it may delay the placement of up to 3% of Regulation D Shares (the
“Extended
Regulation D Shares”)
for an
additional five (5) business days after the Closing Time (the “Extended
Regulation D Closing Date”)
at
which time FBR shall cause an escrow agent, to the extent it has funds
transferred to it by Accredited Investors, to pay the Company the aggregate
applicable purchase price for the Extended Regulation D Shares placed by FBR
(net of any Placement Fee, if the Placement Fee is withheld as provided herein)
against the Company’s delivery of the Extended Regulation D Shares to the
purchasers thereof, in book-entry form through the facilities of DTC. Extended
Regulation D Shares may only be placed with Accredited Investors who have
committed to purchase Regulation D Shares before the Closing Time. The time
at
which payment and delivery on an Extended Regulation D Closing Date is actually
made is hereinafter sometimes called the “Extended
Closing Time.”
On
the
Extended Regulation D Closing Date, FBR shall purchase as Initial Shares any
unpaid Extended Regulation D Shares at the 144A/Regulation S Purchase Price
described in Section 1(a) above.
3
At
each
of the Closing Time or any Extended Closing Time, unless FBR has withheld such
amount from the applicable purchase price paid by FBR to the Company with
respect to the Regulation D Shares placed by FBR on such date, the Company
shall
pay to FBR, by wire transfer of immediately available funds to an account or
accounts designated by FBR, any Placement Fee amount payable with respect to
the
Regulation D Shares for which the Company shall have received the purchase
price.
(c) Option
Shares.
The
closing of FBR’s purchase or placement of the Option Shares shall occur from
time to time at the office of Sidley Austin LLP,
000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (unless another place shall
be
agreed
upon by FBR and the Company). On the applicable Secondary Closing Time (as
defined herein),
subject
to
the
satisfaction or waiver of the closing conditions set
forth
herein, FBR shall pay to the Company the aggregate applicable purchase price
for
the Option Shares then purchased or placed by FBR (net of any Placement Fee
with
respect to any Placed Option Shares) by wire transfer of immediately available
funds against the Company’s delivery of the Option Shares. Such payment and
delivery shall be made at 10:00 a.m., New York City time, on each Secondary
Closing Time. The
Option
Shares shall be delivered in book-entry form through the facilities of DTC,
in
such
names
and
in such denominations as FBR shall specify.
The
time
at which payment by FBR for and delivery by the Company of any Option Shares
are
actually made is referred to herein as a “Secondary
Closing Time”.
4
3.
Offering
of the Shares; Restrictions on Transfer.
(a) FBR
represents and warrants to and agrees with the Company that it is an Accredited
Investor. FBR represents and warrants to and agrees with the Company that
(i) it (and each person acting on its behalf) has not solicited and will
not solicit any offer to buy, and has not and will not make any offer to sell,
the Shares by means of any form of general solicitation or general advertising
(within the meaning of Regulation D, and, with respect to Resale Shares sold
in
reliance on Regulation S under the Securities Act (“Regulation
S”),
by
means of any directed selling efforts (within the meaning of Regulation S);
and
(ii) it (and each person acting on its behalf) has solicited and will
solicit offers to buy the Resale Shares only from, and has offered and will
offer, sell and deliver the Resale Shares only to, (A) persons who it
reasonably believes to be “qualified institutional buyers” (as defined in Rule
144A under the Securities Act) (“QIBs”)
or, if
any such person is buying for one or more institutional accounts for which
such
person is acting as fiduciary or agent, only when such person has represented
to
it that each such account is a QIB to whom notice has been given that such
sale
or delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A and who provide to it a fully completed and
executed purchaser’s letter substantially in the form of Annex I to the
Preliminary Memorandum or Final Memorandum, and (B) persons (each a
“Regulation
S Purchaser”)
to
whom, and under which circumstances, it reasonably believes offers and sales
of
Resale Shares may be made without registration under the Securities Act in
reliance on Regulation S thereunder, and who provide to it a fully completed
and
executed purchaser’s letter substantially in the form of Annex II to the
Preliminary Memorandum or Final Memorandum (such persons specified in clauses
(A) and (B) being referred to herein as the “Eligible
Purchasers”).
FBR
will
provide a copy of each certificate or agreement that it receives from an
Eligible Purchaser regarding its status as an Eligible Purchaser to the Company
as soon as reasonably practicable after FBR receives such certificate or
agreement. FBR agrees to abide by the provisions of Rule 902(g)(1) of the
Securities Act Regulations. Each of the Company and FBR represents, warrants
and
agrees that it is familiar with the rules and restrictions set forth in
Regulation S and that it (and
any
person acting on its behalf; provided that the Company makes no representation,
warranty or covenant in this Agreement with respect to FBR) has
not
undertaken any activity for the purpose of, or that would reasonably be expected
to have the effect of, conditioning the market in the United States for any
Resale Shares being offered in reliance on Regulation S. FBR further agrees
with
the Company that, in the case of any sale of Resale Shares to a distributor,
a
dealer (as defined in Section 2(a)(12) of the Securities Act) or a person
receiving a selling concession, fee or other remuneration, prior to the
expiration of the distribution compliance period set forth in Rule 903(b)(3)
of
Regulation S, it will use commercially reasonable efforts to send a confirmation
or other notice to the purchaser stating that the purchaser is subject to the
same restrictions on offers and sales that apply to FBR. FBR
agrees not to engage in hedging transactions with regard to the Resale Shares
except in compliance with the Securities Act.
5
(b) The
Company represents and warrants to and agrees with
FBR
that it (together with its respective affiliates) has
not
solicited and will not solicit any offer to buy,
and
it (together with its respective affiliates) has not offered and will not offer
to sell, the Shares by means of
any
form of general solicitation or general advertising (within
the meaning of Regulation
D), and it has solicited and will solicit offers
to
buy the Private Placement Shares only from, and has offered and will offer,
sell
or deliver the Shares only to, Accredited
Investors.
The
Company also represents and warrants and agrees that it will sell the Private
Placement Shares only to persons that have provided
to the Company a fully completed and executed Subscription Agreement
in the form of Annex III or Annex IV, as applicable, to the Preliminary
Memorandum or Final Memorandum.
(c) The
Company represents and warrants to and agrees with
FBR
that, assuming
the accuracy of FBR’s representations and
warranties and FBR’s compliance with its obligations set forth in this
Section 3, (i) none of the Company or any of its respective affiliates or
any person acting on
behalf
of it or its affiliates has engaged in, nor will it engage in, any directed
selling efforts (as that term is defined
in Regulation S) with respect to the Shares; and
(ii)
the Company or any of its respective affiliates, and any person acting
on
behalf of it or its affiliates (in each case, other than FBR as to
which
no
representation, warranty or covenant is made by the Company in this Agreement)
have
complied, and will comply, with the offering restrictions requirement
of
Regulation S.
(d) FBR
represents and warrants that it (or any person acting on its behalf) has not
offered or sold, nor will it offer or sell, any Resale Shares in a jurisdiction
outside of the United States except in material compliance with all applicable
laws, regulations and rules of those countries and in accordance with the
selling restrictions described in the Preliminary Memorandum, the Supplements
and the Final Memorandum.
(e) Each
of
FBR and the Company severally represents and warrants to the other that no
action is being taken by it (and any person acting on its behalf; provided
that
the Company makes no representation, warranty or covenant in this Agreement
with
respect to FBR) or is contemplated that would permit an offering or sale of
the
Shares or possession or distribution of the Preliminary Memorandum, the
Supplements or the Final Memorandum or any other offering material relating
to
the Shares in any jurisdiction where, or in any other circumstances in which,
action for those purposes is required (other than in jurisdictions where such
action has been duly taken by counsel for FBR).
(f) FBR
and
the Company agree that FBR may arrange (i) for the private offer and sale
of a portion of the Resale Shares to a limited number of Eligible Purchasers
(which may include affiliates of FBR), and (ii) for the private offer and
sale of the Private Placement Shares by the Company to Accredited Investors
(which may include affiliates of FBR), in each case under restrictions and
other
circumstances designed to preclude a distribution of the Shares that would
require registration of the Shares under the Securities Act or the securities
laws of any other jurisdiction.
(g) FBR
and
the Company agree that the Shares may be resold or otherwise transferred by
the
holders thereof only if the offer and sale of such Shares are registered under
the Securities Act or if an exemption is available from registration under
the
Securities Act and the securities laws of each other applicable jurisdiction.
FBR hereby represents, warrants and agrees that it has observed and will observe
the following procedures in connection with offers, sales and subsequent resales
or other transfers of any Shares placed by FBR:
(i) Sales
only to Eligible Purchasers.
Initial
offers and sales of the Resale Shares will be made only in Exempt Resales by
FBR
to investors that FBR reasonably believes to be Eligible Purchasers and who
have
delivered to the Company and FBR a fully completed and executed purchaser’s
letter substantially in the form of Annex I or II, as applicable, to the
Preliminary Memorandum or Final Memorandum.
6
(ii) No
general solicitation.
The
Shares will be offered only by approaching prospective purchasers on an
individual basis with whom FBR and or the Company has an existing relationship.
No general solicitation or general advertising within the meaning of Regulation
D will be used in connection with the offering of the Shares.
(iii) Restrictions
on transfer.
Each of
the Preliminary Memorandum and the Final Memorandum shall state that the offer
and sale of the Shares have not been and will not be registered (other than
pursuant to the Registration Rights Agreement) under the Securities Act, and
that no resale or other transfer of any Shares or any interest therein prior
to
the date that is two years (or such shorter period as is prescribed by Rule
144(k) under the Securities Act as then in effect) after the later of the
original issuance of such Shares and the last date on which the Company or
any
“affiliate” (as defined in Rule 144 under the Securities Act) of the Company was
the owner of such Shares may be made by a purchaser of such Shares except as
follows:
(A) to
the
Company or any subsidiary thereof,
(B) pursuant
to a registration statement that has been declared effective under the
Securities Act,
(C) for
so
long as the Shares are eligible for resale pursuant to Rule 144A under the
Securities Act, in a transaction complying with the requirements of Rule 144A
to
a person who such purchaser reasonably believes is a QIB that purchases for
its
own account or for the account of a QIB and to whom notice is given that the
offer, resale, pledge or transfer is being made in reliance on
Rule 144A,
(D) pursuant
to offers and sales that occur in “offshore transactions” to persons who are not
“U.S. persons” within the meaning of (and as such terms are defined in)
Regulation S, with the consent of the Company,
(E) to
an
Accredited Investor that is acquiring the Shares for his, her or its own account
or an investment adviser who is acquiring the Shares for the account of an
Accredited Investor for investment purposes and not with a view to, or for
offer
or sale in connection with, any distribution thereof, or
(F) pursuant
to any other available exemption from the registration requirements of the
Securities Act,
in
each
case in accordance with any applicable federal securities laws and the
securities laws of any state of the United States or of any other jurisdiction
and in accordance with the selling restrictions described in the Final
Memorandum.
7
(h) FBR
and
the Company agree that each initial resale of Resale Shares by FBR (and each
purchase of Resale Shares from the Company by FBR) in accordance with this
Section 3 shall be deemed to have been made on the basis of and in reliance
on
the representations, warranties, covenants and agreements (including, without
limitation, agreements with respect to indemnification and contribution) of
the
Company herein contained.
4.
Representations
and Warranties of the Company.
Subject
to Section 14, the Company hereby represents and warrants to FBR that, as of
the
date of this Agreement:
(a) each
of
the Preliminary Memorandum and the Supplements did not, as of its date, contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the Preliminary
Memorandum and the Supplements, as amended and supplemented as of 7:00 p.m
E.S.T. on June 26, 2007 (the “Applicable
Time”)
(the
“Disclosure Package”)
did
not, as of the Applicable Time, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and the Final Memorandum will not, as of its date, at Closing Time
and each Secondary Closing Time (if any), contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided,
however,
that
this representation and warranty shall not apply to any statement in or omission
from the Preliminary Memorandum, the Supplements or Final Memorandum made in
reliance upon and in conformity with information furnished to the Company in
writing by FBR expressly for use therein (that information being limited to
that
described in the last sentence of Section 8(b) hereof);
(b) the
Company is a company limited by shares duly organized and validly existing
and
in good standing under the laws of Bermuda, with
requisite corporate power and authority to own,
lease or operate its properties and to conduct its
business as described in the Disclosure Package and the Final Memorandum
and to execute and deliver this Agreement and the
Registration Rights Agreement, and to consummate
the transactions contemplated hereby (including
the issuance, sale
and
delivery of the Shares) and
thereby;
(c) Maiden
Insurance Company, Ltd. (“Maiden
Insurance”
or
the
“Subsidiary”)
is a
company duly organized and validly existing and in good standing under the
laws
of its jurisdiction of incorporation, with requisite corporate power and
authority to own, lease
or
operate its properties and to conduct its
business as described in the Disclosure Package and the Final Memorandum;
(d) all
issued and outstanding shares of the Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable, and have not been issued
in
violation of or subject to any preemptive right, co-sale right, registration
right, right of first refusal or other similar right of shareholders arising
by
operation of law, under the articles of incorporation or bye-laws of the
Subsidiary, under any agreement to which the Subsidiary is a party or otherwise,
and are owned by the Company free and clear of any pledge, security interests,
liens, encumbrances, claims or equitable interests. The Company does not, and
as
of any Closing Date will not, own or control, directly or indirectly, any
corporation, association or other entity other than the Subsidiary;
8
(e) the
Company had, at the date indicated and at the Closing Time, the duly
authorized
capitalization set forth
in
the both the Disclosure Package and the Final Memorandum under the caption
“Capitalization” after giving effect to the
adjustments set forth thereunder; all of the
issued and outstanding shares of capital stock of
the
Company have been duly and validly
authorized and issued, are fully paid and non-assessable,
and have not been issued in violation of or subject to any pre-emptive
right or other similar right of shareholders arising by operation of law,
under
the
certificate of incorporation or bye-laws of the Company, under any agreement
to
which the Company is a party or otherwise; except
as
disclosed in or contemplated by both the
Disclosure Package and the Final Memorandum, there are no outstanding
(i) securities or obligations of the Company
convertible into or exchangeable for
any
capital stock of the Company, (ii) warrants, rights
or
options to subscribe for or purchase
from the Company any such capital stock or
any
such convertible or exchangeable
securities or obligations or (iii) obligations
of the Company to issue or sell any
shares of capital stock, any such convertible or
exchangeable securities or obligation, or any such warrants, rights or
options;
(f) the
Shares have been duly authorized for issuance, sale and delivery pursuant to
this Agreement and, when issued and delivered by the Company against payment
therefor in accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim except for any such pledge,
lien, encumbrance, security interest or other claim resulting solely from the
actions of FBR, the Eligible Purchasers or Accredited Investors purchasing
Shares in the Private Placement, and the issuance, sale and delivery of the
Shares by the Company are not subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar right of
shareholders arising by operation of law, under the articles of incorporation
or
bye-laws of the Company, under any agreement to which the Company is a party
or
otherwise, other than as provided for in the Registration Rights Agreement
and
in that certain Registration Rights Agreement between the Company and Xxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxxxx and Xxxxx Xxxxxxx (the “Founding
Shareholders Registration Rights Agreement”);
the
Shares satisfy the requirements set forth in Rule 144A under the Securities
Act;
(g) each
of
the Company and the Subsidiary is duly qualified or licensed by, and
is
in
good standing in, each
jurisdiction in which it conducts its business, or in which it owns
or
leases property or
maintains an office and in which such qualification or
licensing is necessary and in which
the
failure, individually or in the aggregate, to be so qualified or licensed could
reasonably be expected to have a material adverse effect
on
the business, condition
(financial or otherwise), results of operations or prospects
of the Company and the Subsidiary taken as a whole (a “Material
Adverse Effect”);
9
(h) each
of
the Company and the Subsidiary has good and marketable title in fee simple
to
all real property and good title to all personal property reflected as owned
by
them in the Disclosure Package and the Final Memorandum, in each case free
and
clear of all liens, security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are disclosed in the both the Disclosure
Package and the Final Memorandum or as could not reasonably be expected to
have
a Material Adverse Effect; any real property or personal property held under
lease by the Company or the Subsidiary is held under a lease that is valid,
existing and enforceable by the Company or such Subsidiary, with such exceptions
as are disclosed in the Disclosure Package and the Final Memorandum or as could
not reasonably be expected to have a Material Adverse Effect, and the Company
has not received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or such Subsidiary
under
any such lease;
(i) the
Company and the Subsidiary owns or possesses such licenses or other rights
to
use all patents, trademarks, service marks, trade names, copyrights, software
and design licenses, trade secrets, manufacturing processes, other intangible
property rights and know-how (collectively “Intangibles”),
as
are necessary to entitle the Company and the Subsidiary
to
conduct its business
described in the Disclosure
Package and the Final
Memorandum,
and
neither the Company nor the Subsidiary has received written notice of any
infringement of or conflict with (and, upon due inquiry, the Company does not
know of any such infringement of or conflict with) asserted rights of others
with respect to any Intangibles which could reasonably be expected to have
a
Material Adverse Effect;
(j) neither
the Company nor the Subsidiary has violated, or received notice of any violation
with respect to, any law, rule, regulation, order decree or judgment applicable
to it and its business, including those relating to transactions with
affiliates, environmental, safety or similar laws, federal or state laws
relating to discrimination in the hiring, promotion or pay of employees, federal
or state wages and hours law, the Employee Retirement Income Security Act or
the
rules and regulations promulgated thereunder, except for those violations that
would not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect;
(k) neither
the Company nor the Subsidiary nor any officer, director, agent or employee
purporting to act on behalf of the Company or the Subsidiary, has at any time,
directly or indirectly, (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contributions, in
violation of law, (ii) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar public
or
quasi-public duties, other than payments required or allowed by applicable
law
(including the Foreign Corrupt Practices Act of 1977, as amended),
(iii) engaged in any transactions, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have
been
and are reflected in the normally maintained books and records of the Company
and the Subsidiary, (iv) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or (v) made any other unlawful
payment;
10
(l) except
as
otherwise disclosed in both the Disclosure
Package and the Final
Memorandum, there are no outstanding loans or advances or guarantees of
indebtedness by the Company or the Subsidiary to or for the benefit of any
of
the officers, directors, affiliates or representatives of the Company or the
Subsidiary or any of the members of the families of any of them; any
outstanding loans or advances or guarantees of indebtedness by the Company
or
the
Subsidiary
or to or
for the benefit of any such persons will be repaid, satisfied or terminated,
as
the case may be, within 60 days after the Closing Time;
(m) except
with respect to FBR, neither the Company nor the Subsidiary has incurred any
liability for any finder’s fees or similar payments in connection with the
transactions contemplated hereby;
(n) neither
the Company nor the Subsidiary is in breach of, or in default under (nor has
any
event occurred which with notice, lapse of time, or both would constitute a
breach of, or default under) its respective certificate of incorporation,
memorandum of association, bye-laws, or other organizational documents
(collectively, the “Charter
Documents”)
or in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, license, indenture, mortgage, deed of
trust, bank loan or credit agreement or other agreement or instrument to which
the Company or such Subsidiary is a party or by which any of them or their
respective properties may be bound or affected, except for such breaches or
defaults which would not have a Material Adverse Effect;
(o) the
execution, delivery and performance by the Company of this Agreement, and the
execution, delivery and performance by the Company and the Subsidiary, as
applicable, of the Registration Rights Agreement; the Founding Shareholders
Registration Rights Agreement; the warrants dated as of June 14, 2007, issued
by
the Company in favor of the Founding Shareholders (the “Warrants”);
the
Master Agreement between the Company and AmTrust Financial Services, Inc. to
be
dated as of July 3, 2007 (the “Master
Agreement”);
the
Asset Management Agreement among Maiden Insurance
and
AII Insurance Management Limited to be dated as of July 3, 2007 (the
“Asset
Management Agreement”);
and
the Reinsurance
Brokerage Agreement by and between Maiden Insurance and AII Reinsurance Broker
Ltd. to be dated as of July 3, 2007 (the “Brokerage
Agreement”
and,
together with the Registration Rights Agreement, the Founding Shareholders
Registration Rights Agreement, the Warrants, the Master Agreement and the Asset
Management Agreement, the “Transaction
Documents”),
and
the issuance, sale and delivery of the Shares by the Company and the
consummation
by
the
Company of the transactions contemplated hereby and, in the case of the Company
and the Subsidiary, as applicable, thereby and compliance by the Company with
the terms
and
provisions hereunder and, in the case of the Company and the Subsidiary, as
applicable, thereunder will
not
conflict with, or result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would constitute
a breach of, or default under), (i) any provision of the Charter Documents
of the Company or the Subsidiary, (ii) any provision of any contract,
license, indenture, mortgage, deed of trust, bank loan or credit agreement
or
other agreement or instrument to which the Company or the Subsidiary is a party
or by which it or its respective properties may be bound or affected, or
(iii) any federal, state, local or foreign law, regulation or rule or any
decree, judgment, permit or order applicable to the Company or the Subsidiary,
except in the case of clauses (ii) or (iii) for such conflicts, breaches or
defaults which have been validly waived or would not reasonably be expected
to
have a Material Adverse Effect or result in the creation or imposition of any
material lien, charge, claim or encumbrance upon any property or asset of the
Company or the Subsidiary;
11
(p) this
Agreement has been duly authorized, executed and delivered by the Company and
is
enforceable in accordance with its terms, and each of the Transaction Documents
has been duly authorized by the Company and the Subsidiary, as applicable,
and
at the Closing Time will have been duly executed and delivered by the Company
and the Subsidiary, as applicable, and will constitute a legal, valid and
binding agreement of the Company and the Subsidiary, as applicable, enforceable
in accordance with its terms, except in each case as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except
to
the extent that the indemnification provisions hereof or thereof may be limited
by federal or state securities laws and public policy considerations in respect
thereof;
(q) the
Shares, this Agreement and each of the Transaction Documents conform in all
material respects to the descriptions thereof contained in both the Disclosure
Package and the Final Memorandum; the form of certificate used to evidence
the
Common Stock complies in all material respects with all applicable statutory
requirements (including any requirement under the laws of Bermuda) and with
any
applicable requirements of the Charter Documents of the Company;
(r) assuming
the accuracy of FBR's representations and warranties set forth in Section 3
of this Agreement and that the purchasers who buy the Resale Shares in Exempt
Resales are Eligible Purchasers, no approval, authorization, consent or order
of
or filing with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection with
the
execution, delivery and performance by the Company of this Agreement or the
Registration Rights Agreement, or the consummation by the Company of the
transactions contemplated hereby and, in the case of the Company, thereby,
or
the issuance, sale and delivery of the Shares as contemplated hereby, other
than
(i) such as have been obtained or made, or will have been obtained or made
at the Closing Time, (ii) any necessary qualification under the securities
or blue sky laws of the various jurisdictions in which the Shares are being
offered or placed by FBR, (iii) with or by federal or state securities
regulatory authorities in connection with or pursuant to the Registration Rights
Agreement, including without limitation the filing of the registration
statement(s) required thereby with the Commission, and (iv) the filing of a
Form D with the Commission and with the applicable state regulatory
authorities;
(s) each
of
the Company and the Subsidiary has all necessary licenses, permits,
certificates, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or
rule, and has obtained all necessary licenses, permits, certificates,
authorizations, consents and approvals from other persons required in order
to
conduct its respective business as described in both the Disclosure Package
and
the Final Memorandum, except to the extent that any failure to have any such
licenses, permits, certificates, authorizations, consents or approvals, to
make
any such filings or to obtain any such licenses, permits, certificates,
authorizations, consents or approvals would not, individually and in the
aggregate, have a Material Adverse Effect; neither the Company nor the
Subsidiary is in violation of, or in default under, any such license, permit,
certificate, authorization, consent or approval or any federal, state, local
or
foreign law, regulation or rule or any decree, order or judgment applicable
to
the Company or the Subsidiary, the effect of which could reasonably be expected
to have a Material Adverse Effect;
12
(t) both
the
Disclosure Package and the Final Memorandum contain accurate summaries of all
material contracts, agreements, instruments and other documents of the Company
and the Subsidiary that would be required to be described in a prospectus
included in a registration statement on Form S-1 under the Securities Act;
the
copies of all contracts, agreements, instruments and other documents (including
governmental licenses, authorizations, permits, consents and approvals and
all
amendments or waivers relating to any of the foregoing) that have been
previously furnished to FBR or its counsel are complete and genuine and include
all material collateral and supplemental agreements thereto;
(u) other
than as set forth in both the Disclosure Package and the Final Memorandum,
there
are no material actions, suits, proceedings, inquiries or investigations pending
or, to the knowledge of the Company or the Subsidiary, threatened against the
Company or such Subsidiary, or any of their respective properties, directors,
officers or affiliates at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency; other than FBR, the Company has not authorized anyone to make any
representations regarding the offer and sale of the Shares, or regarding the
Company in connection therewith; the
Company has not received notice of any order
or
decree
preventing the use of the Preliminary Memorandum, the
Supplements or
the
Final Memorandum or any
amendment or supplement thereto, or any order asserting
that the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities
Act, has been issued and no proceeding for
that
purpose has commenced or is pending or, to its knowledge, is
contemplated;
(v) no
securities of the Company are of the same class (within the meaning of Rule
144A
under the Securities Act) as the Shares and listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934,
as
amended (the “Exchange
Act”),
or
quoted in a U.S. automated inter-dealer quotation system;
(w) subsequent
to the date of the Preliminary Memorandum and the Supplements, and except as
may
be otherwise stated in both the Disclosure
Package and the
Final
Memorandum, there has not been (i) any event, circumstance or change that
has, or could reasonably be expected to have, a Material Adverse Effect,
(ii) any transaction, other than in the ordinary course of business, which
is material to the Company or the Subsidiary, contemplated or entered into
by
the Company or the Subsidiary, (iii) any obligation, contingent or
otherwise, directly or indirectly incurred by the Company or the Subsidiary,
other than in the ordinary course of business, which is material to the Company
or such Subsidiary, (iv) any dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock, or any purchase
by the Company of any of its outstanding capital stock, or (v) any change
in the capital stock or indebtedness of the Company or the Subsidiary, other
than the incorporation of the Subsidiary;
13
(x) neither
the Company nor the Subsidiary is, nor upon the sale of the Shares as
contemplated herein and the application of the net proceeds therefrom as
described in both the Disclosure Package and the Final Memorandum under the
caption “Use of Proceeds”, will be, an “investment company” or an entity
“controlled” by an “investment company” (as such terms are defined in the
Investment Company Act of 1940, as amended);
(y) there
are
no persons with registration or other similar rights to have any securities
registered by the Company or the Subsidiary under the Securities Act other
than
pursuant to the Registration Rights Agreement or the Founding Shareholders
Registration Rights Agreement;
(z) the
Company has not relied upon FBR or legal counsel for FBR for any legal, tax
or
accounting advice in connection with the offering and sale of the
Shares;
(aa) each
of
the independent directors named in the Disclosure Package and the Final
Memorandum has not within the last five years, been employed by or affiliated,
directly or indirectly, with the Company, whether by ownership of, ownership
interest in, employment by, any
material business or professional relationship with,
or
serving as an officer or director of the Company or any of its
affiliates;
(bb) in
connection with the offering of the Shares, neither the Company, the Subsidiary
nor any of their respective affiliates (as defined in Section 501(b) of
Regulation D) has, whether directly or through any agent or person acting on
its
behalf (other than FBR): (i) offered Common Stock of the Company or any
other securities convertible into or exchangeable or exercisable for such Common
Stock in a manner in violation of the Securities Act or the rules and
regulations thereunder, (ii) distributed any other offering material in
connection with the offer and sale of the Shares, other than as described in
both the Disclosure Package and the Final Memorandum, or (iii) 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 offering and sale of the Shares in a manner that would require the
registration of the Shares under the Securities Act;
(cc) neither
the Company nor any of its affiliates (i) is required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act or the rules
and regulations thereunder, or (ii) directly, or indirectly through one or
more intermediaries, controls or has any other association with (within the
meaning of Article 1 of the Bylaws of the National Association of
Securities Dealers, Inc. (the “NASD”))
any
member firm of the NASD;
14
(dd) none
of
the Company, the Subsidiary or any of its respective directors, officers,
representatives (it being understood that FBR shall not be deemed to be a
representative of the Company for this purpose) or affiliates have taken,
directly or indirectly, any action intended, or which might reasonably be
expected, to cause or result, under the Securities Act, the Exchange Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares;
(ee) Each
of
the Company and the Subsidiary carries or is covered by, insurance (issued
by
insurers of recognized financial responsibility to the best knowledge of the
Company) in such amounts and covering such risks as is appropriate for the
conduct of their respective businesses and the value of the assets to be held
by
them upon the consummation of the transactions contemplated by both the
Disclosure Package and the Final Memorandum and as is customary for companies
engaged in businesses similar to the business of the Company, all of which
insurance is in full force and effect;
(ff) the
balance sheet and accompanying notes included in the Disclosure Package and
the
Final Memorandum fairly present in all material respects the financial condition
of the Company as of the date thereof and have been prepared in conformity
with
U.S. generally accepted accounting principles applied on a consistent
basis;
(gg) PricewaterhouseCoopers,
who have certified certain financial statements included in the Supplement
dated
June 21, 2007 and the Final Memorandum, whose reports with respect to such
financial statements included in such Supplement and the Final Memorandum are
included in such Supplement and the Final Memorandum and who have delivered
the
comfort letters referred to in Section 6(c) hereof, are independent registered
public accountants with respect to the Company within the meaning of the
Securities Act or the Securities Act Regulations.
(hh) except
as
disclosed in the Disclosure Package and Final Memorandum, the Subsidiary is
not
currently prohibited, directly or indirectly, from paying any dividends or
distributions to the Company to the extent permitted by applicable law, from
making any other distribution on the Subsidiary’s issued and outstanding capital
stock, from repaying to the Company any loans or advances to the Subsidiary
from
the Company or from transferring any of the property or assets of the Subsidiary
to the Company;
(ii) neither
the Company, nor the Subsidiary, nor to the Company's knowledge, any employee
or
agent of the Company or the Subsidiary, has made any payment of funds of the
Company or the Subsidiary or received or retained any funds in violation of
any
law, rule or regulation, including without limitation the “know your customer”
and anti-money laundering laws of any jurisdiction;
(jj) any
certificate signed by any officer of the Company delivered to FBR or to counsel
for FBR pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to FBR as to the matters covered
thereby; and
15
(kk) except
where such failure to file or pay an assessment or lien would not in the
aggregate reasonably be expected to have a Material Adverse Effect or where
such
matters are the result of a pending bona fide dispute with taxing authorities,
(i) each of the Company and the Subsidiary has accurately prepared and timely
filed any and all federal, state, foreign and other tax returns that are
required to be filed by it (other than those tax returns that would be required
to be filed if
the
Company or the Subsidiary was characterized as (x) engaged in a U.S. trade
or
business or (y) managed and controlled in the United Kingdom or (z) having
a
permanent establishment in the United Kindgom),
if any,
and has paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges (other than those taxes that would be
required to be paid if the Company or the Subsidiary was characterized as (x)
engaged in a U.S. trade or business or (y) managed and controlled in the United
Kingdom or (z) having a permanent establishment in the United Kindgom),
including without limitation, all sales and use taxes and all taxes which the
Company or the Subsidiary is obligated to withhold from amounts owing to
employees, creditors and third parties, with respect to the periods covered
by
such tax returns (whether or not such amounts are shown as due on any tax
return), (ii) no deficiency assessment with respect to a proposed adjustment
of
the Company’s or the Subsidiary’s federal, state, local or foreign taxes is
pending or, to the best of the Company’s knowledge, threatened; (iii) since the
date of the most recent audited financial statements, neither the Company nor
the Subsidiary has incurred any liability for taxes other than in the ordinary
course of its business; and (iv) to the Company’s knowledge there is no tax
lien, whether imposed by any federal, state, foreign or other taxing authority,
outstanding against the assets, properties or business of the Company or the
Subsidiary.
5.
Certain
Covenants of the Company.
Subject
to Section 14, the Company hereby agrees with FBR:
(a) to
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offer and sale under the securities or blue sky laws
of such states and other jurisdictions as FBR may designate or as required
for
the Private Placement and to maintain such qualifications in effect as long
as
required by such laws for the distribution of the Shares and for the Exempt
Resales of the Resale Shares; provided,
however,
that
the Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of, or subject itself to
taxation as doing business in, any such state or other jurisdiction (except
service of process with respect to the offering and sale of the
Shares);
(b) to
prepare the Final Memorandum in a form approved by FBR and to furnish promptly
(and with respect to the initial delivery of such Final Memorandum, not later
than 10:00 a.m. (New York City time) on the first day following the execution
and delivery of this Agreement) to FBR or to purchasers upon the direction
of
FBR as many copies of the Final Memorandum (and any amendments or supplements
thereto) as FBR may reasonably request for the purposes contemplated by this
Agreement;
16
(c) to
advise
FBR promptly, confirming such advice in writing, of: (i) the happening of
any event known to the Company within the time during which the Final Memorandum
shall (in the view of FBR) be required to be distributed by FBR in connection
with an Exempt Resale (and FBR hereby agrees to notify the Company in writing
when the foregoing time period has ended) which, in the judgment of the Company,
would require the making of any change in the Final Memorandum then being used
so that the Final Memorandum would not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
are made, not misleading; and (ii) the receipt of any notification with
respect to the modification, rescission, withdrawal or suspension of the
qualification of the Shares, or of any exemption from such qualification or
from
registration of the Shares, for offering or sale in any jurisdiction, or of
the
initiation or threatening of any proceedings for any of such purposes and,
if
any government agency or authority should issue any such order, to make every
reasonable effort to obtain the lifting or removal of such order as soon as
possible;
(d) to
furnish to FBR for a period of two years from the Closing Time, (i) copies
of all annual, quarterly and current reports supplied to holders of the Shares,
(ii) copies of all reports filed by the Company with the Commission, and
(iii) such other information as FBR may reasonably request regarding the
Company provided, however, that the Company shall not be required to provide
FBR
with any such information that has been filed with or furnished to the
Commission by any electronic transmission pursuant to the Electronic Data
Gathering, Analysis and Retrieval System (“XXXXX”)
or an
equivalent electronic database authorized by the Commission and that is
available to the public;
(e) not
to
amend or supplement the Final Memorandum prior to the Closing Time or any
Secondary Closing Time unless FBR shall previously have been advised thereof
and
shall have consented thereto or not have reasonably objected thereto (for legal
reasons) in writing within a reasonable time after being furnished a copy
thereof;
(f) during
any period in the two years (or such shorter period (x) as may then be
applicable under the Securities Act regarding the holding period for securities
under Rule 144(k) under the Securities Act or any successor rule or (y) until
the Company is required to file reports with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act) after the Closing Time in which the Company
is not subject to Section 13 or 15(d) of the Exchange Act to furnish, upon
request, to any holder of such Shares the information (“Rule
144A Information”)
specified in Rule l44A(d)(4) under the Securities Act and any additional
information (“PORTAL
Information”)
required by the National Association of Securities Dealers, Inc.
PortalSM
Market
(“PORTAL”),
and
any such Rule l44A Information and Portal Information will not, at the date
thereof, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they are made, not misleading;
17
(g) to
apply
the net proceeds from the sale of the Shares in the manner set forth under
the
caption “Use of Proceeds” in both the Disclosure Package and the Final
Memorandum;
(h) that
neither the Company nor the Subsidiary, nor any of their respective affiliates
(as defined in Section 501(b) of Regulation D) will, whether directly or
through any agent or person acting on its behalf (other than FBR):
(i) offer Common Stock of the Company or any other securities convertible
into or exchangeable or exercisable for such Common Stock in a manner in
violation of the Securities Act or the rules and regulations thereunder,
(ii) distribute any other offering material in connection with the offer
and sale of the Shares, other than as described in both the Disclosure Package
and the Final Memorandum, or (iii) sell, offer for sale, solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the
Securities Act), any of which will be integrated with the offering and sale
of
the Shares in a manner that would require the registration under the Securities
Act
of the
sale to FBR or the Eligible Purchasers of the Resale Shares or to the Accredited
Investors of the Private Placement Shares;
(i) that
neither the Company nor any of its affiliates will take, directly or indirectly,
any action designed to, or that might be reasonably expected to, cause or result
in stabilization or manipulation of the price of the Shares;
(j) that,
except as permitted by the Securities Act, neither the Company nor any of its
affiliates will distribute any offering materials in connection with Exempt
Resales;
(k) to
pay
all expenses, fees and taxes in connection with (i) the preparation of both
the Disclosure Package and the Final Memorandum, and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof
to FBR (including costs of mailing and shipment), (ii) the preparation,
issuance, sale and delivery of the Shares, including any stock or other transfer
taxes or duties payable upon the sale of the Resale Shares to FBR,
(iii) the printing of this Agreement and any dealer agreements, and the
reproduction and/or printing and furnishing of copies of each thereof to dealers
(including costs of mailing and shipment) (iv) the qualification of the
Shares for offering and sale under state laws and the determination of their
eligibility for investment under state law as aforesaid (including any filing
fees), and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to FBR and to dealers, (v) the designation of the
Shares as PORTAL-eligible securities by PORTAL, (vi) all fees and
disbursements of counsel and accountants for the Company (vii) the fees and
expenses of any transfer agent or registrar for the Common Stock,
(viii) costs of background investigations, (ix) the
costs
and expenses of FBR and the Company incurred in connection with the marketing
and offering of the Shares, including all “out of pocket” expenses, roadshow
costs (regardless of the form in which the roadshow is conducted) and expenses,
and
expenses of Company personnel, including but not limited to commercial or
charter air travel, local hotel accommodations and transportation,
and
(x)
performance of the Company's other obligations hereunder, and to pay such other
expenses and fees as may be provided for in a separate letter agreement between
FBR and the Company;
18
(l) to
use
reasonable efforts in cooperation with FBR to obtain permission for the Shares
(other than Shares offered and sold in accordance with Regulation S) to be
eligible for clearance and settlement through DTC, and for the Shares sold
in
accordance with Regulation S to be eligible for clearance and settlement through
the Euroclear System and Clearstream Banking, société anonyme,
Luxembourg;
(m) in
connection with Resale Shares offered and sold in an offshore transaction (as
defined in Regulation S), not to register any transfer of such Resale Shares
not
made in accordance with the provisions of Regulation S and not, except in
accordance with the provisions of Regulation S, if applicable, to issue any
such
Resale Shares in the form of definitive securities;
(n) to
refrain during the period commencing on the date of this Agreement and ending
on
the date that is 180 days thereafter, without the prior written consent of
FBR
(which consent may be withheld or delayed in FBR’s sole discretion), from
(i) offering, pledging, selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or contract to sell, granting any
option, right or warrant for the sale of, lending or otherwise disposing of
or
transferring, directly or indirectly, any equity securities of the Company
or
any securities convertible into or exercisable or exchangeable for equity
securities of the Company, or filing any registration statement under the
Securities Act with respect to any of the foregoing, or (ii) entering into
any swap or other arrangement that transfers, in whole or in part, directly
or
indirectly, any of the economic consequences of ownership of equity securities
of the Company, 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 foregoing sentence shall not apply to (i) the Shares
to be sold hereunder, (ii) the registration and sale of the Shares in
accordance with the terms of the Registration Rights Agreement, (iii) the
registration and sale of Common Stock in an initial public offering of the
Company as contemplated by the Registration Rights Agreement, (iv) any
Shares of Common Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to in both the Disclosure Package
and the Final Memorandum, or (v) such issuances of options or grants of
restricted stock under the Company’s stock option and incentive plans as
described in both the Disclosure Package and the Final Memorandum;
(o) if
the
Resale Shares are not delivered by the Company to FBR for any reason (other
than
(x) the termination of this Agreement pursuant to clauses (ii) through (v)
of
the first paragraph of Section 7 hereof or (y) the default by FBR in its
obligations hereunder), to reimburse FBR for all of its out-of-pocket expenses
relating to the transactions contemplated hereby, including the reasonable
fees
and disbursements of its legal counsel;
(p) that,
from and after the Closing Time, the Company shall have in place and 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;
19
(q) that
the
Company will conduct its affairs and the affairs of the Subsidiary in such
a
manner so as to ensure that neither the Company nor the Subsidiary will be
an
"investment company" or an entity "controlled" by an investment company within
the meaning of the Investment Company Act;
(r) that
the
Company shall use its best efforts to cause Maiden Insurance to be incorporated,
licensed and capitalized as described in the Final Memorandum; and
(s) that,
as
soon as reasonably practicable following completion of the transactions
contemplated hereunder, it will use commercially reasonable efforts to make
such
changes to the corporate governance policies and procedures as may be required
by law prior to filing any registration statement with the
Commission.
6.
Conditions
of FBR's Obligations.
The
obligations of FBR hereunder at the Closing Time and each Secondary Closing
Time, as applicable, are subject to (i) the accuracy of the statements of the
Company’s officers made in any certificate pursuant to the provisions hereof as
of the date of such certificate, and (ii) subject to Section 14, the following
other conditions:
(a) The
Company shall furnish to FBR at the Closing Time an opinion of LeBoeuf, Lamb,
Xxxxxx & XxxXxx LLP, counsel for the Company, addressed to FBR and dated the
Closing Time, in form and substance satisfactory to FBR, covering the matters
set forth on Exhibit B
hereto.
Such opinion shall indicate that it is being rendered to FBR at the request
of
the Company. The Company shall also furnish to FBR at the Closing Time an
opinion of Xxx
Xxxxx, General Counsel of the Company, addressed
to FBR and dated the Closing Time, in form and substance satisfactory to FBR,
covering the matters set forth on Exhibit B-1
hereto.
(b) The
Company shall furnish to FBR at the Closing Time an opinion of Xxxxxxx, Xxxx
& Xxxxxxx, special Bermuda counsel for the Company, addressed to FBR and
dated the Closing Time, in form and substance satisfactory to FBR, covering
the
matters set forth on Exhibit C
hereto.
Such opinion shall indicate that it is being rendered to FBR at the request
of
the Company.
(c) FBR
shall
have received from PricewaterhouseCoopers, “comfort” letters dated,
respectively, as of the date hereof and the Closing Time, addressed to FBR
and
in form and substance satisfactory to FBR. FBR shall have also received from
BDO
Xxxxxxx, LLP, a letter dated as of the date hereof and the Closing Time,
addressed to FBR, in form and substance satisfactory to FBR, containing
statements and information with respect to the financial statements and certain
financial information of AmTrust Financial Services, Inc. included in the Final
Offering Memorandum and the Disclosure Package.
20
(d) FBR
shall
have received at the Closing Time a favorable opinion of Sidley Austin
LLP,
counsel
for FBR, dated the Closing Time, in form and substance satisfactory to
FBR.
(e) Prior
to
the Closing Time or any Secondary Closing Time, (i) no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of
the
initiation or threatening of any proceedings for any of such purposes, shall
have occurred and (ii) both the Disclosure Package and the Final Memorandum
and all amendments or supplements thereto, or modifications thereof, if any,
shall not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(f) Between
the time of execution of this Agreement and the Closing Time or any Secondary
Closing Time, (i) no event, circumstance or change constituting a Material
Adverse Effect shall have occurred or become known, (ii) no transaction
which is material to the Company, taken as a whole, shall have been entered
into
by the Company that has not been fully and accurately disclosed in both the
Disclosure Package and the Final Memorandum, or any amendment or supplement
thereto; and (iii) no order or decree preventing the use of any of the
Preliminary Memorandum, the Supplements, the Disclosure Package or the Final
Memorandum, or any amendment or supplement thereto, or any order asserting
that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act shall have been issued and
shall
remain in effect.
(g) The
Company shall have delivered to FBR a certificate, executed by the secretary
of
the Company and dated as of the Closing Time, as to (i) the resolutions adopted
by the Company's board of directors in form and substance reasonably acceptable
to FBR, (ii) the Company’s certificate of incorporation and memorandum of
association, as amended and (iii) the Company’s bye-laws, as amended, each
as in effect at the Closing Time. The Company shall have delivered to FBR a
certificate, executed by the secretary of Maiden Insurance as to: (i) the
resolutions adopted by such company’s board of directors in form and substance
reasonably acceptable to FBR; (ii) such company’s certificate of incorporation;
and (iii) such Company’s bye-laws, each as in effect at the Closing
Time.
(h) (i)
The
representations and warranties of the Company set
forth
in this Agreement shall
be
true and correct as of the Closing Time as though made
on
and as of such date (except to the extent that such
representations and warranties speak
as
of another date, in which case such representations and
warranties shall be true and
correct as of such other date), (ii) the Company shall
have complied
with all covenants and agreements and satisfied all
conditions on its part to be performed
or satisfied under this Agreement at or prior
to
the Closing Time
and
(iii) the Company shall have delivered to FBR a certificate, executed by its
chief executive officer and chief financial officer certifying (x) to the effect
set forth in clauses (i) and (ii) above and (y) that the conditions set forth
in
subsections (e) and (f) of this Section 6 have been satisfied as
of the
Closing Time.
21
(i) On
or
before the Closing Time, FBR shall have received the Transaction Documents
executed by the Company and the Subsidiary, as applicable, and such agreements
shall be in full force and effect.
(j) At
the
time of execution and delivery of this Agreement, FBR shall
have received from each of the Founding Shareholders, officers
and
directors of the Company a written agreement (a “Lock-up
Agreement”)
in
substantially the form attached hereto as Exhibit C.
(k) At
each
Secondary Closing Time, FBR
shall
have received:
(i) certificates,
dated as of each Secondary Closing Time, of the Company, substantially
to
the
same effect as the certificates
delivered at the Closing Time pursuant to
subsections (g) and (h) of this Section 6,
subject
to any exceptions that,
in
the reasonable judgment of FBR, are not material.
(ii) the
opinions of LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP and Xxx
Xxxxx,
each
in
form
and substance satisfactory
to FBR, dated as
of
such Secondary Closing Time relating
to the
Regulation D Shares or the Option Shares, as applicable, and
otherwise substantially
to the same effect as the opinions required by
subsection (a) of this Section 6.
(iii) the
opinion of Xxxxxxx, Xxxx & Xxxxxxx, in
form
and substance satisfactory
to FBR, dated as
of
each Secondary Closing Time relating
to the
Regulation D Shares or the Option Shares, as applicable, and
otherwise substantially
to the same effect as the opinions required by
subsection (b) of this Section 6.
(iv) “comfort”
letters
from PricewaterhouseCoopers and BDO Xxxxxxx, LLP, in form and substance
satisfactory to FBR, dated as of each Secondary Closing Time, substantially
the
same in scope and substance as the letter furnished to FBR pursuant to
subsection (c) of this Section 6, except that the "specified date" in the
letter furnished pursuant to this subsection (k)(iv) shall be a date not
more than five days prior to such Secondary Closing Time.
In
the
event that any “comfort” letter referred to in subsection (c) of this
Section 6 or this subsection (k)(iv) sets forth any such changes, decreases
or increases that, in the reasonable discretion of FBR, are likely to result
in
a Material Adverse Effect, it shall be a further condition to the obligations
of
FBR that such letters shall be accompanied by a written explanation of the
Company as to the significance thereof, unless FBR deems such explanation
unnecessary. References
to the Preliminary Memorandum, any Supplement, the Disclosure Package and/or
Final Memorandum with respect to any “comfort” letter referred to in this
Section 6 shall include any amendment or supplement thereto at the date of
such letter.
22
(v) the
opinion of Sidley Austin LLP,
dated
as
of
each Secondary
Closing Time, relating
to the Regulation
D Shares or the Option Shares, as applicable, and
otherwise to the same
effect as the opinion required by subsection (d)
of
this Section 6.
(l) The
Company shall have furnished to FBR such other documents and certificates as
FBR
may reasonably request as to the accuracy and completeness of any statement
in
both the Disclosure Package and the Final Memorandum or any amendment or
supplement thereto, and any additional matters as FBR may reasonably request,
as
of the Closing Time or any Secondary Closing Time.
(m) The
Shares to be resold by FBR to QIBs pursuant to Rule 144A under the Securities
Act shall have been designated as PORTAL-eligible securities by
PORTAL.
(n) Each
Subscription Agreement shall remain in full force and effect and no event shall
have occurred giving any party the right to terminate any Subscription Agreement
pursuant to the terms thereof.
7.
Termination.
The
obligations of FBR hereunder shall be subject to termination in the absolute
discretion of FBR, at any time prior to the Closing Time or any Secondary
Closing Time, if (i) any of the conditions specified in Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, (ii) trading in securities in general on any exchange or
national quotation system shall have been suspended or minimum prices shall
have
been established on such exchange or quotation system, (iii) there has been
a material disruption in the securities settlement, payment or clearance
services in the United States, (iv) a banking moratorium shall have been
declared either by the United States or New York State authorities, or
(v) if the United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material outbreak
or
escalation of hostilities or other national or international calamity or crisis
or change in economic, political or other conditions of such magnitude in its
effect on the financial markets of the United States as, in the judgment of
FBR,
to make it impracticable to market the Shares.
If
FBR
elects to terminate this Agreement as provided in this Section 7, the
Company shall be notified promptly by letter or fax.
If
the
sale to FBR of the Resale Shares, as contemplated by this Agreement, is not
carried out by FBR for any reason permitted under this Agreement or if such
sale
is not carried out because the Company shall be unable to comply with any of
the
terms of this Agreement, (i) the Company shall not be under any obligation
or
liability to FBR under this Agreement (except to the extent provided in Sections
5(k), 5(p) and 8 hereof), and (ii) FBR shall be under no obligation or liability
to the Company under this Agreement (except to the extent provided in Section
8
hereof).
23
8.
Indemnity.
(a) The
Company agrees to indemnify, defend and hold harmless FBR and its affiliates,
and their respective directors, officers, representatives and agents, and any
person who controls FBR within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act, from and against any loss, expense, liability
or claim (including the reasonable cost of investigation) which, jointly or
severally, FBR or any such controlling person may incur under the Securities
Act, the Exchange Act or otherwise, insofar as such loss, expense, liability
or
claim arises out of or is based upon (i) any breach of any representation
or warranty made by the Company herein, (ii) any breach by the Company of
any covenant set forth herein, or (iii) any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Memorandum
as
supplemented by any Supplement as of the Applicable Time, the Disclosure Package
or the Final Memorandum, or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading, except insofar as any such loss,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by FBR to the Company expressly for use
in
such Preliminary Memorandum, the Supplements, the Disclosure Package or Final
Memorandum (that information being limited to that described in the last
sentence of Section 8(b) hereof).
(b) FBR
agrees to indemnify, defend and hold harmless the Company and its directors
and
officers and any person who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against
any
loss, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such person
may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and made
in reliance upon and in conformity with information furnished in writing by
FBR
to the Company expressly for use in the Preliminary Memorandum as supplemented
by any Supplement as of the Applicable Time, the Disclosure Package or Final
Memorandum (or in any amendment or supplement thereof by the Company), such
information being limited to the following:
(i) the
penultimate and final paragraphs of the cover page of the Preliminary Memorandum
and the Final Memorandum;
(ii) the
fourth and fifth sentences of the fifth paragraph under “Plan of
DistributionំGeneral”; and
(iii) the
two
paragraphs under “Plan of DistributionំAdditional Allotments, Price
Stabilization, Short Positions and Penalty Bids.”
24
(c) If
any
action is brought against any person or entity (each
an
“Indemnified Party”),
in
respect of which indemnity may be sought pursuant to
Section 8(a) or (b) above, the Indemnified Party shall promptly notify the
party(ies) obligated to provide such indemnity (each an “Indemnifying
Party”)
in
writing of the institution of such action and
the
Indemnifying Party shall assume the defense of
such
action, including the employment
of counsel and payment of expenses; provided that
the
failure so to notify the Indemnifying Party will not relieve the Indemnifying
Party from any liability which the Indemnifying Party may have to any
Indemnified Party unless and to the extent the Indemnifying
Party did not otherwise know of such action
and such failure results in the forfeiture or loss by the Indemnifying Party
of
rights and defenses that would have had material value in the defense. The
Indemnified Party(ies)
shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be
at
the expense of the Indemnified Party unless the
employment of such counsel shall have been authorized in
writing by the Indemnifying
Party in connection with the defense of
such
action or the Indemnifying Party
shall not have employed counsel to have charge of
the
defense of such action within
a
reasonable time or such Indemnified Party(ies) shall
have reasonably concluded (based
on
the advice of counsel) that counsel selected by the Indemnifying Party has
an
actual conflict of interest or there may be defenses
available to the Indemnified Party(ies) which are
different from or additional to those available to
the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified
Party(ies)), in any of which events such fees and expenses shall be borne by
the
Indemnifying Party and paid as incurred (it being understood, however, that
the
Indemnifying Party shall not be liable for the fees and expenses of more
than
one separate firm of counsel (in addition to
local
counsel) for the Indemnified Party
in
any one action or series of related actions in
the
same jurisdiction representing the Indemnified Parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, the
Indemnifying Party shall not be liable for any settlement of any
such
claim or action effected without its written consent.
The Indemnifying Party shall have the right to settle any such claim or action
for itself and any Indemnified Party so long as the Indemnifying Party pays
any
settlement payment and such settlement (i) includes
a complete and unconditional release of the Indemnified Party
from all losses, expenses, claims, damages, injunctions, liability and other
obligations with respect to any claims
that are the subject matter of such action and
(ii) does not include a statement as to,
or an
admission of, fault, culpability or a failure to
act by
or on behalf of the Indemnified Party.
(d) If
the
indemnification provided for in this Section 8 is unavailable to an Indemnified
Party under subsections (a) and (b) of this Section 8 in respect of any losses,
expenses, liabilities or claims referred to therein, then each applicable
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, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company, on
the
one hand, and FBR, on the other hand, from the offering of the Shares or
(ii) if the allocation provided by clause (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 (i) above but also the relative
fault of the Company,
on
the
one hand, and of FBR, on the other hand, in connection with the statements
or
omissions which resulted in such losses, expenses, liabilities or claims, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and FBR, on the other hand, shall
be
deemed to be in the same proportion as the total proceeds from the offering
(net
of initial purchaser discounts and commissions but before deducting expenses)
received by the Company bear to the discounts and commissions received by FBR.
The relative fault of the Company, on the one hand, and of FBR, on the other
hand, shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission
or
alleged omission relates to information supplied by the Company or by FBR and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable
by
a party as a result of the losses, claims, damages and liabilities referred
to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
25
(e) The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in subsection (d) above. Notwithstanding the
provisions of this Xxxxxxx 0, XXX shall not be required to contribute any amount
in excess of the amount by which the total price at which the Shares were
initially offered (either in the Exempt Resales or to subscribers in the Private
Placement) exceeds the amount of any damages which FBR 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.
(f) The
indemnity and contribution agreements contained in this Section 8 and the
covenants, warranties and representations of the Company contained in this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of FBR or its affiliates, or their respective directors,
officers, representatives and agents, or any person who controls FBR within
the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
or by or on behalf of the Company or their respective directors and officers
or
any person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the sale and delivery of the Shares. Each
party
to this Agreement agrees promptly to notify the other party of the commencement
of any litigation or proceeding against it and, in the case of the Company,
against any of their respective officers and directors, in connection with
the
sale and delivery of the Shares, or in connection with the both the Disclosure
Package and/or Final Memorandum.
9.
Notices.
Except
as otherwise herein provided, all statements, requests, notices and agreements
shall be in writing delivered by facsimile (with receipt confirmed), overnight
courier or registered or certified mail, return receipt requested, or by
telegram and:
(a) if
to
FBR, shall be sufficient in all respects if delivered or sent to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Compliance Department, (facsimile: 703-312-9698);
with a copy to Sidley Austin LLP,
Xxx
Xxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxx (facsimile:
312-853-7036); and
(b) if
to the
Company, shall be sufficient in all respects if delivered to the Company at
the
offices of the Company at 0
Xxxx
Xxxxxx, Xxxxxxxx, XX 00, Xxxxxxx, Xxxxxxxxx:
Xxx Xxxxx; (facsimile: 441-292-5796);
with a
copy to LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx (facsimile 000 000
0000).
26
10.
Duties.
Except
with respect to FBR’s engagement as placement agent with respect to the Private
Placement Shares, nothing in this Agreement shall be deemed to create a
partnership, joint venture or agency relationship between the parties. FBR
undertakes to perform such duties and obligations only as expressly set forth
herein. Such duties and obligations of FBR with respect to the Shares
shall be determined solely by the express provisions of this Agreement, and
FBR shall not be liable except for the performance
of such duties and obligations with respect to the Shares as are specifically
set forth in this Agreement. The Company acknowledges and agrees that: (i)
the purchase and sale of the Resale Shares pursuant to this Agreement and the
determination of the offering price of the Shares and any related discounts
and
commissions are each an arm’s-length commercial transaction between the Company,
on the one hand, and FBR, on the other hand, and the Company is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) except
as
aforesaid with respect to the Private Placement Shares, in connection with
each
transaction contemplated hereby and the process leading to such transaction
FBR
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary of the Company or its affiliates, shareholders, creditors
or
employees or any other party; (iii) except as aforesaid with respect to the
Private Placement Shares, FBR has not assumed and will not assume an advisory,
agency or fiduciary responsibility in favor of the Company with respect to
any
of the transactions contemplated hereby or the process leading thereto
(irrespective of whether FBR has advised or is currently advising the Company
on
other matters); and (iv) FBR and its affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of the Company
and
that FBR has no obligation to disclose any of such interests. The Company
acknowledges that FBR disclaims any implied
duties
(including any fiduciary duty), covenants or obligations arising from its
performance of the duties and obligations expressly set forth herein.
The
Company hereby waives and releases, to the fullest extent permitted by law,
any
claims that the Company may have against FBR with respect to any breach or
alleged breach of agency (except with respect to the Private Placement Shares)
or fiduciary duty.
11.
GOVERNING
LAW; HEADINGS.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE COURT IN
THE
STATE OF NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. The
section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
27
12.
Parties
at Interest.
The
Agreement herein set forth has been and is made solely for the benefit of FBR
and the Company and the controlling persons, directors and officers referred
to
in Section 8 hereof, and their respective successors, assigns, executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, in its capacity as such, from FBR) shall acquire or
have
any right under or by virtue of this Agreement.
13.
Counterparts.
This
Agreement may be signed by the parties in counterparts, which together shall
constitute one and the same agreement among the parties.
14. Maiden
Insurance.
FBR
acknowledges that as of the date of this Agreement, Maiden Insurance has not
been incorporated or capitalized and has not been issued a license to operate
as, or registered as, a Class 3 insurer in Bermuda. Notwithstanding anything
to
the contrary in this Agreement, the Company and FBR agree that:
(a)(x) the
Company makes (i) no representation or warranty in this Agreement as to Maiden
Insurance (except as provided in (y) below) at any time prior to such time
as
Maiden Insurance has been incorporated and (ii) no representation or warranty
in
the following Sections of this Agreement as to Maiden Insurance at any time
prior to such time as Maiden Insurance has been capitalized and licensed as
described in the Final Memorandum:
| · |
4(c)
(to the extent such Section refers to the corporate power and authority
of
Maiden Insurance to own, lease or operate its properties and to conducts
its business as described in the Disclosure Package and the Final
Memorandum),
|
| · |
4(g),
|
| · |
4(o)
(to the extent such Section refers to Transaction Documents that
Maiden
Insurance may not legally execute and deliver prior to the time that
it is
capitalized and licensed as described in the Final
Memorandum),
|
| · |
4(p)
(to the extent such Section refers to Transaction Documents that
Maiden
Insurance may not legally execute and deliver prior to the time that
it is
capitalized and licensed as described in the Final
Memorandum),
|
28
| · |
4(s)
(to the extent such Section refers to matters other than violations
of, or
defaults under, any federal, state, local or foreign
law),
|
| · |
4(x),
|
| · |
4(ee),
and
|
| · |
4(kk);
and
|
(y)
if
any of the incorporation, capitalization and licensing of Maiden Insurance
as
described in the Final Memorandum has not occurred, the Company represents
and
warrants that nothing has come to its attention that causes it to believe that
such incorporation, capitalization and licensing, as the case may be, is not
likely to occur in the near future;
(b) the
definition of “Material Adverse Effect” shall be deemed not to include any
reference to Maiden Insurance at any time prior to such time as Maiden Insurance
has been incorporated as described in the Final Memorandum;
(c) until
such time as Maiden Insurance has been incorporated, capitalized and licensed
as
described in the Final Memorandum, Maiden Insurance will not be able to execute
and deliver or perform any of the Transaction Documents or any other agreement
or document to which it is contemplated that Maiden Insurance will be a
party;
(d) except
as
set forth in Section 5(r), the Company makes no covenant in this Agreement
as to
Maiden Insurance at any time prior to such time as Maiden Insurance has been
incorporated and, with respect to the covenant in Section 5(q) of this
Agreement, capitalized and licensed, as described in the Final
Memorandum;
(e) the
conditions specified in Section 6 to the obligations of FBR under this Agreement
shall apply to Maiden Insurance at the Closing Time or any Secondary Closing
Time only if and to the extent that, as of such Closing Time or Secondary
Closing Time, respectively, Maiden Insurance has been incorporated, capitalized
and licensed as described in the Final Memorandum;
(f) the
failure of Maiden Insurance to be incorporated, capitalized and licensed as
described in the Final Memorandum shall in no event, in and of itself, (x)
constitute a Material Adverse Effect or (y) provide any grounds for FBR to
refuse to consummate the transactions contemplated by this Agreement or to
terminate this Agreement, unless in either case (x) or (y) an event, state
of
fact or circumstance shall have occurred or arisen as a result of communications
with the Bermuda Monetary Authority or otherwise as a result of which it is
reasonable to conclude that the chances for the approval of the incorporation
or
licensing of Maiden Insurance in the near future have materially diminished
from
the date of this Agreement; and
29
(g) the
legal
opinions required to be delivered at the Closing Time or any Secondary Closing
Time shall not be required to refer to Maiden Insurance if, as of such Closing
Time or Secondary Closing Time, respectively, Maiden Insurance has not been
incorporated, provided
that if
Maiden Insurance has been incorporated (but not capitalized or licensed as
described in the Final Memorandum) as of the Closing Time or such Secondary
Closing Time, paragraphs 6 and 7 of the legal opinion of LeBoeuf, Lamb, Xxxxxx
& XxxXxx LLP (as set forth in Exhibit B hereto) and paragraphs 2, 3 and 4 of
the legal opinion of Xxxxxxx, Xxxx & Xxxxxxx (as set forth in Exhibit C
hereto) that are delivered at the Closing Time or such Secondary Closing Time,
as applicable, shall not be required to refer to Maiden Insurance.
[SIGNATURE
PAGE FOLLOWS]
30
If
the
foregoing correctly sets forth the understanding among the Company and
FBR,
please so indicate in the space provided below for the purpose, whereupon this
letter shall constitute a binding agreement between the Company and
FBR.
Very
truly yours,
By:
/s/
Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx
X. Xxxxx
Title: Chief
Operating Officer, General Counsel and Assistant Secretary
Accepted
and agreed to as
of
the
date first above written:
FRIEDMAN,
BILLINGS, XXXXXX & CO., INC.
By:/s/
Xxxxx X. Kleebatt
Name: Xxxxx
X.
Kleebatt
Title: Senior
Vice President
[SIGNATURE
PAGE TO PURCHASE/PLACEMENT AGREEMENT]
