Exhibit 1.1
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VALIDUS HOLDINGS, LTD.
15,660,963 Common Shares
PURCHASE AGREEMENT
Dated: July , 2007
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TABLE OF CONTENTS
PAGE
SECTION 1. Representations and Warranties ..................................................................... 2
(a) Representations and Warranties by the Company ...................................................... 2
(b) Representations, Warranties and Covenants by the Selling Shareholders .............................. 10
SECTION 2. Sale and Delivery to Underwriters; Closing ......................................................... 13
SECTION 3. Covenants of the Company ........................................................................... 15
SECTION 4. Free Writing Prospectus ............................................................................ 19
SECTION 5. Payment of Expenses ................................................................................ 20
(a) Expenses ........................................................................................... 20
(b) Expenses of Selling Shareholders ................................................................... 20
(c) Allocation of Expenses ............................................................................. 21
SECTION 6. Conditions of Underwriters' Obligations ............................................................ 21
SECTION 7. Indemnification and Contribution ................................................................... 24
(a) Indemnification of Underwriters .................................................................... 24
(b) Indemnification of Company, Directors and Officers and Selling Shareholders ........................ 26
(c) Actions against Parties; Notification .............................................................. 26
(e) Control Persons .................................................................................... 28
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SECTION 8. Representations, Warranties and Agreements to Survive Delivery ..................................... 28
SECTION 9. Termination of Agreement ........................................................................... 28
SECTION 10. Default by One or More of the Underwriters ......................................................... 29
SECTION 11. Default by Selling Shareholders .................................................................... 29
SECTION 12. Notices ............................................................................................ 30
SECTION 13. Parties ............................................................................................ 30
SECTION 14. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE ............................................... 30
SECTION 15. Waiver of Immunity ................................................................................. 31
SECTION 16. Judgment Currency .................................................................................. 31
SECTION 17. Miscellaneous ...................................................................................... 31
SECTION 18. Effect of Headings ................................................................................. 32
SCHEDULES
Schedule I -- List of Underwriters ........................................................................... Sch I-1
Schedule II -- List of Selling Shareholders .................................................................. Sch II-1
Schedule III -- Issuer Free Writing Prospectuses ............................................................. Sch III-1
Schedule IV -- List of Subsidiaries of the Company ........................................................... Sch IV-1
Schedule V -- List of Persons Subject to Lock-up ............................................................. Sch V-1
EXHIBITS
Exhibit A -- Form of Lock-up Agreement ....................................................................... A-1
Exhibit B -- Form of Opinion of Company's Outside Counsel .................................................... B-1
Exhibit C -- Form of Opinion of Company's Bermuda Counsel .................................................... C-1
Exhibit D -- Form of Opinion of Counsel to Selling Shareholders .............................................. D-1
Exhibit E -- Form of Secretary's Certificate ................................................................. E-1
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VALIDUS HOLDINGS, LTD.
(a Bermuda holding company)
15,660,963 Common Shares
(Par Value $0.175 Per Share)
PURCHASE AGREEMENT
July , 2007
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
as Representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
4 World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Validus Holdings, Ltd., an exempted company incorporated in Bermuda as a
holding company (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the underwriters named in Schedule I hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇,
Sachs & Co. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ ("▇▇▇▇▇▇▇ ▇▇▇▇▇") are
acting as lead representatives (the "Lead Representatives"), 13,415,501 common
shares, par value $0.175 per share, of the Company ("Common Shares"), and
certain shareholders of the Company named in Schedule II hereto (collectively,
the "Selling Shareholders," and each, a "Selling Shareholder") propose, subject
to the terms and conditions stated herein, to sell to the Underwriters the
number of Common Shares set forth in said Schedule II; furthermore, at the
election of the Underwriters, the Company proposes to issue and sell to the
Underwriters all or any part of 1,512,325 additional Common Shares (the "Company
Optional Securities) and the Selling Shareholders propose to sell to the
Underwriters all or any part of 836,819 additional Common Shares (the "Selling
Shareholders' Optional Securities" and together with the Company Optional
Securities, the "Optional Securities"), in each case to cover over-allotments,
if any, pursuant to Section 2(b) hereof. The aforesaid 13,415,501 Common Shares
to be issued and sold by the Company and purchased by the Underwriters (the
"Company Firm Securities"), the aforesaid 2,245,462 Common Shares set forth in
Schedule II to be sold by the Selling Shareholders and purchased by the
Underwriters (the "Selling Shareholder Firm
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Securities," and together with the Company Firm Securities, the "Firm
Securities") and all or any part of the aforesaid aggregate 2,349,144 Optional
Securities are hereinafter called, collectively, the "Securities."
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof and as of each Time of
Delivery referred to in Section 2(d) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. (A) A registration
statement on Form S-1 (File No. 333-139989) (the "Initial Registration
Statement") in respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore delivered to
the Lead Representatives, and, excluding exhibits thereto, to the Lead
Representatives for each of the other Underwriters, have been declared effective
by the Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"1933 Act"), which became effective upon filing, no other document with respect
to the Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the 1933 Act is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the 1933 Act in accordance with Section 3(a)
hereof and deemed by virtue of Rule 430A under the 1933 Act to be part of the
Initial Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the Preliminary Prospectus relating to the Securities
that was included in the Registration Statement immediately prior to the
Applicable Time (as defined below) is hereinafter called the "Pricing
Prospectus"; such final prospectus, in the form first filed pursuant to Rule
424(b) under the 1933 Act, is hereinafter called the "Prospectus"; and any
"issuer free writing prospectus" as defined in Rule 433 under the 1933 Act
relating to the Securities is hereinafter called an "Issuer Free Writing
Prospectus");
(B) No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the
1933 Act and the rules and regulations of the Commission thereunder, and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the
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circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
the Lead Representatives expressly for use therein;
(C) For the purposes of this Agreement, the "Applicable Time" is
___:___ __P.M. (New York City time) on the date of this Agreement. The
Pricing Prospectus, when considered together with the price to the public
and the number of Securities sold, each as set forth on the cover page of
the Prospectus, as of the Applicable Time, did not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and each Issuer Free Writing
Prospectus listed on Schedule III hereto does not conflict with the
information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus and each such Issuer Free Writing Prospectus,
as supplemented by and taken together with the Pricing Prospectus as of
the Applicable Time, did not include any untrue statement of a material
fact or omit to state any 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 statements or omissions made in an Issuer Free
Writing Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Lead
Representatives expressly for use therein; and
(D) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement and the
Prospectus will conform, in all material respects to the requirements of
the 1933 Act and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to each
part of the Registration Statement and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
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 statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Lead Representatives expressly for use therein;
(ii) Independent Accountants of the Company. PricewaterhouseCoopers, who
have certified the consolidated financial statements and supporting schedules of
the Company that are included in the Registration Statement, Pricing Prospectus
and the Prospectus, is an independent registered public accounting firm as
required by the 1933 Act and the rules and regulations of the Commission
thereunder.
(iii) Independent Accountants of Talbot. KPMG LLP, who have certified the
consolidated financial statements and supporting schedules of Talbot Holdings
Ltd., a wholly
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owned subsidiary of the Company, organized under the laws of Bermuda ("Talbot"
and together with its subsidiaries, the "Talbot Group"), that are included in
the Registration Statement, Pricing Prospectus and the Prospectus, is, to the
best knowledge of the Company after due inquiry, an independent registered
public accounting firm as required by the 1933 Act and the rules and regulations
of the Commission thereunder.
(iv) Financial Statements. (a) The consolidated financial statements
included in the Registration Statement, the Pricing Prospectus and the
Prospectus, together with the related schedules and notes, present fairly, in
all material respects, the financial position of the Company and its
subsidiaries (provided, that this representation and warranty in respect of the
Talbot Group extends only to the best knowledge of the Company after due
inquiry) at the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company and its subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
United States generally accepted accounting principles ("U.S. GAAP") applied on
a consistent basis throughout the periods involved. The financial statement
schedules, if any, included in the Registration Statement, the Pricing
Prospectus and the Prospectus present fairly, in all material respects, in
accordance with U.S. GAAP, the information required to be stated therein. The
selected financial data and the summary financial information included in the
Registration Statement, the Pricing Prospectus and the Prospectus present
fairly, in all material respects, the information shown therein and have been
compiled on a basis consistent in all material respects with that of the audited
financial statements included in the Registration Statement, the Pricing
Prospectus and the Prospectus, as applicable.
(b) The pro forma financial statements included in the Registration
Statement, the Pricing Prospectus and the Prospectus, together with the related
notes, present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions referred to therein.
(v) Good Standing of the Company. The Company has been duly incorporated
and is validly existing as an exempted company in good standing under the laws
of Bermuda and has the necessary corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Pricing
Prospectus and the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect. For the
purposes of this Agreement, "Material Adverse Effect" is defined as a material
adverse change or any development or event that could reasonably be expected to
result in a prospective material adverse change in the financial condition,
results of operations or business affairs of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business.
(vi) Good Standing of Subsidiaries. Each of the subsidiaries of the
Company listed on Schedule IV hereto has been duly incorporated or organized and
is validly existing as a company or corporation in good standing under the laws
of the jurisdiction of its incorporation or
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organization and has the necessary corporate power to own, lease and operate its
properties and to conduct its business as described in the Pricing Prospectus
and the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, the Pricing Prospectus or the
Prospectus, all of the issued and outstanding share capital or capital stock of
each such subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity interest; none of the outstanding shares of share
capital or capital stock of any subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such subsidiary.
(vii) Capitalization. The Company has an authorized capitalization as set
forth in the Pricing Prospectus and Prospectus and all of the issued shares of
capital stock of the Company (A) have been duly authorized and validly issued,
(B) are fully paid and non-assessable, (C) were not issued in violation of the
preemptive or similar rights of any securityholder of the Company or any
subsidiary and (D) conform to the description thereof contained in the Pricing
Prospectus and the Prospectus.
(viii) Authorization and Description of Securities. The unissued
Securities to be issued and sold by the Company hereunder have been duly and
validly authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Securities contained
in the Pricing Prospectus and the Prospectus; the shareholders of the Company
have no preemptive or similar rights with respect to the unissued Securities to
be issued and sold by the Company hereunder and no shareholder consents are
required in connection with the Company's issuance and sale of such Securities.
(ix) Authorization and Execution of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(x) Certain Information. The statements set forth in the Pricing
Prospectus and the Prospectus under the captions "Description of Share Capital"
and "Certain Relationships and Related Party Transactions", insofar as they
purport to constitute a summary of the terms of the Securities and the other
documents described therein, and the statements set forth in the Pricing
Prospectus and the Prospectus under the captions "Certain Tax Considerations",
"Business--Regulation", "Acquisition of Talbot--The Lloyd's Market and the
London Market", "--Share Sale Agreement", and "Underwriting" insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair in all material respects.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter, memorandum of association,
bye-laws, by-laws or similar incorporation or organizational documents or (ii)
in violation or default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other
6
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments"), except in the case of (ii), for such violations
and defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated in this Agreement and in the Registration
Statement, and compliance by the Company with its obligations under this
Agreement, do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or result in a breach of any of the terms
and provisions of, or constitute a default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments, nor will such action result in any
violation of the provisions of the charter, memorandum of association, bye-laws,
by-laws or similar organizational documents of the Company or any subsidiary or
any applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations, except in each case (other than with respect to such
charter, memorandum of association, bye-laws, by-laws or similar organizational
documents of the Company) for such conflicts, violations, breaches or defaults
which would not result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness that is material to the
operations or financial results of the Company (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
(xii) Financial Assistance. On the date hereof and upon the issuance of
the Securities, the Company is and will be in compliance with Section 39 and/or
entitled to one or more of the exclusions therefrom set forth in Section 39A of
the Companies ▇▇▇ ▇▇▇▇ of Bermuda.
(xiii) Absence of Proceedings. Other than as set forth in the Pricing
Prospectus and the Prospectus prior to the date hereof, or as encountered in the
ordinary course of business in the Company's activities, there is no action,
suit, proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened against the Company or any subsidiary or
the properties or assets thereof, which would reasonably be expected to result
in a Material Adverse Effect, or which would reasonably be expected to
materially and adversely affect the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder.
(xiv) Accuracy of Exhibits. There are no contracts or documents which are
required to be filed as exhibits to the Registration Statement, the Pricing
Prospectus or any Issuer Free Writing Prospectus which have not been so filed as
required.
(xv) Title to Intellectual Property. Other than as set forth in the
Pricing Prospectus and the Prospectus, the Company and its subsidiaries own or
possess, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how
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(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them except where
the failure to own or possess, or to be able to acquire such Intellectual
Property, would not have a Material Adverse Effect, and, other than as set forth
in the Pricing Prospectus and the Prospectus, neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, exemption, qualification or
decree of, any court or governmental authority or agency or any sub-division
thereof is required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the Securities
under this Agreement or the consummation of the transactions contemplated by
this Agreement, except (i) such as have been already obtained or as may be
required under the 1933 Act or the rules and regulations of the Commission
thereunder and state securities or blue sky laws, (ii) such as have been
obtained from the Bermuda Monetary Authority and (iii) [the Pricing Prospectus
and] the Prospectus will be filed at the Registrar of Companies in Bermuda
pursuant to the laws of Bermuda.
(xvii) Licenses and Permits. Other than as set forth in the Pricing
Prospectus and the Prospectus, each of the Company and its subsidiaries
possesses all consents, authorizations, approvals, orders, licenses,
certificates, or permits issued by any regulatory agencies or bodies
(collectively, "Permits") which are necessary to conduct the business now
conducted by it as described in the Pricing Prospectus and the Prospectus,
except where the failure to possess such Permits, individually or in the
aggregate, would not have a Material Adverse Effect; all of such Permits are
valid and in full force and effect, except where the invalidity of such Permits
or the failure to be in full force and effect, individually or in the aggregate,
would not have a Material Adverse Effect. There is no pending, or to the
Company's knowledge, threatened action, suit, proceeding or investigation
against or involving the Company or its subsidiaries (and the Company knows of
no reasonable basis for any such action, suit, proceeding or investigation) that
individually or in the aggregate would reasonably be expected to lead to the
revocation, modification, termination, suspension or any other impairment of the
rights of the holder of any such Permit which revocation, modification,
termination, suspension or other impairment would have a Material Adverse
Effect.
(xviii) Compliance with Applicable Laws. Other than as set forth in the
Pricing Prospectus and the Prospectus, neither the Company nor any of its
subsidiaries is in violation or default of any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative agency
or other governmental body having jurisdiction over the Company or any such
subsidiary or any of its properties, as applicable, except for such violations
or defaults which, individually or in the aggregate, would not have a Material
Adverse Effect.
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(xix) No Material Adverse Effect. Neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited financial
statements included in the Pricing Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Pricing
Prospectus, and since the date as of which information is given in the Pricing
Prospectus, there has not been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity, results
of operations or business affairs of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of business,
otherwise than as set forth or contemplated in the Pricing Prospectus.
(xx) Stabilization. Neither the Company nor any of its affiliates
(including any subsidiary) has taken, nor will the Company or any of its
affiliates take, directly or indirectly, any action which is designed to or
which has constituted or which would be expected to cause or result in
stabilization or manipulation of the price of any security of the Company in
connection with the offering of the Securities in violation of the Exchange Act
of 1934, as amended (the "1934 Act").
(xxi) Tax Liabilities and Reserves. Other than as set forth in the Pricing
Prospectus and the Prospectus, any tax returns required to be filed by the
Company or any of its subsidiaries in any jurisdiction have been filed and any
taxes, including any withholding taxes, excise taxes, penalties and interest,
assessments and fees and other charges due or claimed to be due from such
entities have been paid, other than any of those being contested in good faith
and for which adequate reserves have been provided or any of those currently
payable without penalty or interest, except to the extent that the failure to so
file or pay would not result in a Material Adverse Effect; provided, that this
representation and warranty in respect of the Talbot Group, extends only to the
best knowledge of the Company after due inquiry. Other than as set forth in the
Pricing Prospectus and the Prospectus, to the knowledge of the Company and its
subsidiaries, there is no material proposed tax deficiency, assessment, charge
or levy against the Company or any of its subsidiaries, as to which a reserve
would be required to be established under U.S. GAAP, that has not been so
reserved or that should be disclosed in the Registration Statement that has not
been so disclosed, except for any such deficiency, assessment, charge or levy
which, individually or in the aggregate, would not have a Material Adverse
Effect.
(xxii) Accounting Controls. The Company and each of its subsidiaries
maintains a system of internal control over financial reporting (as such term is
defined in Rule 13a-15(f) under the ▇▇▇▇ ▇▇▇) sufficient to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company's internal control over financial
reporting is effective and the Company is not aware of any material weaknesses
in its system of internal control over financial reporting; and since the date
of the latest audited financial statements included in the Pricing Prospectus,
there has been no change in the Company's system of internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company's system of internal control over financial
reporting.
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(xxiii) Disclosure Controls. The Company and each of its subsidiaries
maintain disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the ▇▇▇▇ ▇▇▇) that comply with the requirements of the 1934 Act;
such disclosure controls and procedures have been designed to ensure that
material information relating to the Company and its subsidiaries is made known
to the Company's principal executive officer and principal financial officer by
others within those entities; and such disclosure controls and procedures are
effective.
(xxiv) Investment Company Act. The Company is not and, after giving effect
to the offer and sale of the Securities and the application of the proceeds
thereof, will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "Act").
(xxv) Passive Foreign Investment Company. The Company does not believe it
is a "passive foreign investment company" (a "PFIC") as defined in Section 1297
of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder, for 2006, and does not expect to be
classified as a PFIC in the foreseeable future.
(xxvi) Rule 405. At the time of filing the Initial Registration Statement,
the Company was not and is not an "ineligible issuer" as defined in Rule 405
under the 1933 Act.
(xxvii) Stamp Duty, Excise Tax, Etc. No stamp or other issuance or
transfer taxes or duties and no capital gains, income, withholding or other
taxes are payable by or on behalf of the Underwriters to Bermuda or any
political subdivision or taxing authority thereof or therein in connection with
(A) the issuance, sale and delivery by the Company to or for the respective
accounts of the Underwriters of the Securities or (B) the sale or delivery
outside Bermuda by the Underwriters of the Securities to the initial purchasers
thereof, other than as described in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
delivered pursuant to Section 6(c) of this Agreement.
(xxviii) Currency Exchange Control. Other than as set forth in the Pricing
Prospectus and the Prospectus, there are no currency exchange control laws or
withholding taxes, in each case of Bermuda, that would be applicable to the
payment of dividends on the Securities by the Company (other than as may apply
to residents of Bermuda for Bermuda exchange control purposes).
(xxix) Registration Rights. Except as disclosed in the Pricing Prospectus
or the Prospectus, there are no persons with registration rights or other
similar rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933 Act.
(xxx) No Ratings Downgrade. Except as disclosed in the Pricing Prospectus
and the Prospectus, the Company has no knowledge of any threatened or pending
downgrade of any of its or its subsidiaries' financial strength rating by A.M.
Best Company Inc. ("A.M. Best"), which currently has publicly released a
financial strength rating of A- (Excellent).
(xxxi) Listing Approval. The Securities have been approved for listing on
the New York Stock Exchange (the "Exchange").
10
(b) Representations, Warranties and Covenants by the Selling Shareholders.
Each Selling Shareholder represents and warrants, severally and not jointly and
solely with respect to itself, to each Underwriter as of the date hereof and as
of each Time of Delivery referred to in Section 2(d) hereof, and agrees with
each Underwriter, as follows:
(i) Accurate Disclosure. To (and only to) the extent that any statements
or omissions made in the Registration Statement, the Prospectus, the Pricing
Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus, or
any further amendments or supplements thereto are made in reliance upon and in
conformity with information furnished to the Company by and relating to such
Selling Shareholder expressly for use therein: (i) the Registration Statement
did not, when it became effective, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) the Prospectus,
the Pricing Prospectus and such Preliminary Prospectus, and any further
amendments or supplements thereto, as of their respective dates, did not and
will not, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and (iii) such Issuer Free Writing Prospectus listed on Schedule III
hereto does not conflict with the information contained in the Registration
Statement, the Pricing Prospectus or the Prospectus and each such Issuer Free
Writing Prospectus, as supplemented by and taken together with the Pricing
Prospectus as of the Applicable Time, did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and such Selling Shareholder is not prompted to sell the
Securities to be sold by such Selling Shareholder hereunder by any material
information specifically concerning the Company which is not set forth in the
Registration Statement, the Pricing Prospectus or the Prospectus or any Issuer
Free Writing Prospectus filed with the Commission, and any further amendments or
supplements thereto.
(ii) Authorization of this Agreement. This Agreement, the Custody
Agreement signed by such Selling Shareholder and [ ], as custodian (the
"Custodian"), relating to the deposit of the Securities to be sold by such
Selling Shareholder (the "Custody Agreement") and the irrevocable power of
attorney appointing certain individuals as such Selling Shareholder's attorneys
in fact to the extent set forth therein relating to the transactions
contemplated hereby and by the Registration Statement (the "Power of Attorney")
have each been duly authorized, executed and delivered by or on behalf of such
Selling Shareholder.
(iii) Consents. All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Shareholder of this
Agreement, the Custody Agreement and the Power of Attorney, and for the sale and
delivery of the Securities to be sold by such Selling Shareholder hereunder,
have been obtained; and such Selling Shareholder has full right, power and
authority to enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, assign, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder.
(iv) Noncontravention. The sale of such Selling Shareholder Firm
Securities and the Selling Shareholders' Optional Securities to be sold by such
Selling Shareholder
11
hereunder, the execution of this Agreement, the Custody Agreement and the Power
of Attorney and the compliance by such Selling Shareholder with all of the
provisions hereof and the consummation by such Selling Shareholder of the
transactions contemplated herein will not conflict with or result in a material
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder is bound or to which any of the property or assets of
such Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the Memorandum of Association, Bye-laws or
similar organizational documents of such Selling Shareholder or any statute or
any order, rule or regulation of any governmental agency having jurisdiction
over such Selling Shareholder or the property of such Selling Shareholder.
(v) Valid Title. Such Selling Shareholder has, and immediately prior to
each Time of Delivery, such Selling Shareholder will have, good and valid title
to the Securities to be sold by it hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Securities and
payment therefor pursuant hereto, good and valid title to such Securities, free
and clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters.
(vi) Lock-up Period. Except as otherwise indicated in the lock-up
agreement in the Form of Exhibit A hereto, such Selling Shareholder agrees not
to offer, sell, contract to sell, pledge, grant any option to purchase, make any
short sale or otherwise dispose of the Common Shares or any securities of the
Company substantially similar to the Common Shares, including but not limited to
any options or warrants to purchase any securities or any securities convertible
into, exchangeable for or that represent the right to receive any Common Shares
or any securities of the Company substantially similar to the Common Shares,
whether now owned or hereinafter acquired, during the period from the date of
the Prospectus continuing through the date that is 180 days after the date of
the Prospectus (the initial "Lock-Up Period"), except with the prior written
consent of the Lead Representatives; provided, however, that the initial Lock-Up
Period will be automatically extended if: (1) during the last 17 days of the
initial Lock-Up Period, the Company issues an earnings release or announces
material news or a material event or (2) prior to the expiration of the initial
Lock-Up Period, the Company announces that it will release earnings results
during the 15-day period following the last day of the initial Lock-Up Period,
then in each case the Lock-Up Period will be automatically extended until the
expiration of the 18-day period beginning on the date of earnings release or the
announcement of the material news or material event, as applicable, unless each
Lead Representative each waives, in writing, such extension; such Selling
Shareholder hereby acknowledges that the Company has agreed herein to provide
Selling Shareholders, among others, who execute and deliver lock-up agreements
substantially in the form of Exhibit A hereto ("Lock-Up Agreements") pursuant to
Section 12 hereof prior written notice of any such announcement giving rise to
an extension of the Lock-Up Period and agrees that any such notice properly
delivered will be deemed to have been given to, and received by, such Selling
Shareholder; such Selling Shareholder hereby further agrees that, prior to
engaging in any transaction or taking any other action that is subject to the
terms of this provision during the period from the date hereof to and including
the 34th day following the expiration of the initial Lock-Up Period, it will
give notice thereof to the Company and will not consummate such transaction or
take any such action unless it has received written
12
confirmation from the Company that the Lock-Up Period (as such may have been
extended pursuant to the previous paragraph) has expired.
(vii) No Association with NASD. Other than as disclosed to the Lead
Representatives in writing, neither such Selling Shareholder nor any of its
affiliates directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, or is a person associated
with (within the meaning of Article I (dd) of the By-laws of the National
Association of Securities Dealers, Inc. (the "NASD")), any member firm of the
NASD.
(viii) Stabilization. The Selling Shareholder has not taken and will not
take, nor to the knowledge of such Selling Shareholder have any of its
affiliates taken or will take, any action which is designed to or which has
constituted or which would be expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection with the
offering of the Securities in violation of the 1934 Act.
(ix) Tax Equity and Fiscal Responsibility Act of 1982. In order to
document the Underwriters' compliance with the reporting and withholding
provisions of the Tax Equity and Fiscal Responsibility Act of 1982 with respect
to the transactions herein contemplated, each of the Selling Shareholders that
is not a "United States Person" as defined in Section 7701(a)(30) of the Code
will deliver to the Lead Representatives prior to or at the First Time of
Delivery (as defined in Section 2(d) hereof) a complete and accurate Internal
Revenue Service ("IRS") Form W-8BEN, W-8EXP or W-8IMY(or applicable successor
forms), and each of the Selling Shareholders that is a "United States Person" as
defined in Section 7701(a)(30) of the Code will deliver to the Lead
Representatives prior to or at the First Time of Delivery a complete and
accurate IRS Form W-9 (or applicable successor form).
(x) Certificated Securities. To the extent the Securities are
certificated, certificates in negotiable form representing all of the Securities
to be sold by such Selling Shareholder hereunder have been, or will be at each
Time of Delivery, duly and properly endorsed in blank for transfer, accompanied
by all documents, including stock powers, duly and properly executed, that are
necessary to validate the transfer of title thereto, to the Underwriters, free
of any legend, restriction on transferability, proxy, lien or claim whatsoever.
(xi) Custody Agreement. To the extent the Securities are certificated,
certificates in negotiable form have been placed in custody under the Custody
Agreement, in the form heretofore furnished to, duly executed and delivered by
such Selling Shareholder to the Custodian
(xii) Power of Attorneys. The Selling Shareholder has duly executed and
delivered a Power of Attorney, in the form heretofore furnished to you,
appointing ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and each of them, as such
Selling Shareholder's attorneys in fact (the "Attorneys in Fact") with authority
to execute and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Shareholders as provided in Section 2 hereof, to authorize the delivery of the
Securities to be sold by such Selling Shareholder hereunder and otherwise to act
on behalf of such Selling
13
Shareholder in connection with the transactions contemplated by this Agreement
and the Custody Agreement; and
(xiii) Irrevocability of Obligations. The Securities to be sold by such
Selling Shareholder hereunder are subject to the interests of the Underwriters
hereunder; the arrangements made by such Selling Shareholder for such custody
and the appointment by such Selling Shareholder of the Attorneys in Fact by the
Power of Attorney are to that extent irrevocable; the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any individual Selling Shareholder or, in the case of
an estate or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling Shareholder or any such
executor or trustee should die or become incapacitated, or if any such estate or
trust should be terminated, or if any such partnership or corporation should be
dissolved, or if any other such event should occur, before the delivery of the
Securities hereunder, the Securities shall be delivered by or on behalf of such
Selling Shareholder in accordance with the terms and conditions of this
Agreement and, to the extent the Securities are certificated, the Custody
Agreement; and actions taken by the Attorneys in Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys in Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Subject to the terms and conditions herein, (i) (A) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price per share of $_______, the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule I hereto and, (B) in the event and to
the extent that the Underwriters exercise the election to purchase Optional
Securities as provided below, the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (i)(A) of this Section 2(a), that portion of the number of Company
Optional Securities as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Company Optional Securities by a fraction, the numerator of which
is the maximum number of Company Optional Shares which such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number of Company
Optional Securities that all of the Underwriters are entitled to purchase
hereunder; (ii) (A) each Selling Shareholder agrees, severally and not jointly,
to sell to each of the Underwriters and each of the Underwriters agrees,
severally and not jointly, to purchase from such Selling Shareholder, at a
purchase price per share of $______, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule II hereto and (B) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Securities as provided below, each Selling Shareholder agrees,
severally and not jointly, to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from such Selling
Shareholder, at the purchase price per share set forth in clause (ii)(A)
14
of this Section 2(a), that portion of the number of Selling Shareholders'
Optional Securities as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Selling Shareholders' Optional Securities by a fraction, the
numerator of which is the maximum number of Selling Shareholders' Optional
Securities which such Underwriter is entitled to purchase as set forth opposite
the name of such Underwriter in Schedule II hereto and the denominator of which
is the maximum number of Selling Shareholders' Optional Securities that all of
the Underwriters are entitled to purchase hereunder.
(b) The Company hereby grants to the Underwriters the right to purchase at
their election up to the number of Company Optional Securities set forth on
Schedule I hereto, at the purchase price per share set forth in Section
2(a)(i)(A) hereof, for the sole purpose of covering sales of shares in excess of
the number of Firm Securities, provided that the purchase price per Company
Optional Security shall be reduced by an amount per share equal to any dividends
or distributions declared by the Company and payable on the Firm Securities but
not payable on the Company Optional Securities. Any such election to purchase
Company Optional Securities may be exercised only by written notice from you to
the Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the number of Company Optional Securities to be
purchased and the date on which such Company Optional Securities are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten Business Days (as defined below) after the date of such
notice.
(c) Each Selling Shareholder hereby grants to the Underwriters the right
to purchase at their election up to the number of Selling Shareholders' Optional
Securities set forth opposite the name of such Selling Shareholder on Schedule
II hereto, at the purchase price per share set forth in Section 2(a)(ii)(A)
hereof, for the sole purpose of covering sales of shares in excess of the number
of Firm Securities, provided that the purchase price per Selling Shareholders'
Optional Security shall be reduced by an amount per share equal to any dividends
or distributions declared by the Company and payable on the Firm Securities but
not payable on the Optional Securities. Any such election to purchase Selling
Shareholders' Optional Securities may be exercised only by written notice from
you to the Selling Shareholders, given within a period of 30 calendar days after
the date of this Agreement, setting forth the number of Selling Shareholders'
Optional Securities to be purchased and the date on which such Selling
Shareholders' Optional Securities are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery or, unless you, the Company
and such Selling Shareholder otherwise agree in writing, earlier than two or
later than ten Business Days after the date of such notice.
(d) Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
(e) (i) The Securities to be purchased by each Underwriter hereunder in
definitive form, and in such authorized denominations and registered in such
names as the Lead Representatives may request upon at least forty-eight hours'
prior notice to the Company shall be delivered by or on behalf of the Company
and the Selling Shareholders to the Lead
15
Representatives, through the facilities of the Depository Trust Company ("DTC"),
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to the Lead
Representatives at least forty-eight hours in advance. The Company and the
Selling Shareholders will cause the certificates representing the Securities, if
any, to be made available for checking and packaging at least twenty-four hours
prior to the Time of Delivery (as defined below) with respect thereto at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of such delivery and payment shall be 9:30 a.m., New York City time, on
______, 2007 or such other time and date as the Lead Representatives and the
Company may agree upon in writing. The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City
time, on ______, 2007 or such other time and date as the Lead Representatives
and the Company may agree upon in writing, and, with respect to the Optional
Securities, 9:30 a.m., New York City time, on the date specified by the Lead
Representatives in the written notice given by the Lead Representatives to the
Underwriters' election to purchase such Optional Securities, or such other time
and date as the Lead Representatives and the Company may agree upon in writing.
Such time and date for delivery of the Firm Securities is herein called the
"First Time of Delivery", such time and date for delivery of the Optional
Securities, if not the First Time of Delivery, is herein called the "Second Time
of Delivery," and each such time and date for delivery is herein called a "Time
of Delivery."
(ii) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 6 hereof, including the cross
receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 3 hereof, will be delivered at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Eighty ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at such Time of Delivery. A meeting will be held at the Closing
Location at _____ p.m., New York City time, on the Business Day next preceding
such Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Agreement, "Business Day" shall mean
each day other than a Saturday, Sunday or other day on which both the Commission
and banks in New York City are closed for business.
(f) Qualified Independent Underwriter. The Company hereby confirms its
engagement of Wachovia Capital Markets, LLC as, and Wachovia Capital Markets,
LLC hereby confirms its agreement with the Company to render services as, a
"qualified independent underwriter" within the meaning of Rule 2720(b)(15) of
the NASD with respect to the offering and sale of the Securities. Wachovia
Capital Markets, LLC, in its capacity as qualified independent underwriter and
not otherwise, is referred to herein as the "QIU." The QIU shall receive no
compensation for its services hereunder.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
To prepare the Prospectus in a form approved by the Lead Representatives
and to file such Prospectus pursuant to Rule 424(b) under the 1933 Act not
later than the
16
Commission's close of business on the second Business Day following the
execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the 1933 Act; to make no
further amendment or any supplement to the Registration Statement or the
Prospectus prior to the last Time of Delivery which shall be disapproved
by the Lead Representatives promptly after reasonable notice thereof; to
advise the Lead Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any amendment or supplement to the
Prospectus has been filed and to furnish the Lead Representatives with
copies thereof; to file promptly any material required to be filed by the
Company with the Commission pursuant to Rule 433 under the 1933 Act within
the time required by such Rule; to advise the Lead Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission prior to the completion of the distribution of the Securities
contemplated by this Agreement (the date of which shall be confirmed to
the Company by the Lead Representatives) of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or other
prospectus in respect of the Securities, of any notice of objection of the
Commission to the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission prior to the
completion of the distribution of the Securities contemplated by this
Agreement for the amending or supplementing of the Registration Statement
or the Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or other prospectus or suspending any
such qualification, to promptly use its best efforts to obtain the
withdrawal of such order; and in the event of the issuance of any such
notice, promptly to amend the Registration Statement in such manner as may
be required to permit offers and sales of the Securities.
(b) Qualification of Common Shares. Promptly from time to time to
take such action as the Lead Representatives may reasonably request to
qualify the Common Shares for offering and sale under the securities laws
of such jurisdictions as the Lead Representatives may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(c) Delivery of Prospectus. Prior to 3:00 P.M., New York City time,
on the Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriters with written and electronic
copies of the Prospectus in New York City in such quantities as each Lead
Representative may reasonably request, and, if the delivery of a
prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the ▇▇▇▇ ▇▇▇) is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with
the offering or sale of the Securities and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to
17
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such
Prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the ▇▇▇▇ ▇▇▇) is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the 1934 Act any document
incorporated by reference in the Prospectus in order to comply with the
1933 Act or the 1934 Act, to notify the Lead Representatives and upon
their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many written
and electronic copies as the Lead Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a
prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the ▇▇▇▇ ▇▇▇) in connection with sales of any of the Securities at
any time nine months or more after the time of issue of the Prospectus,
upon the request of any Underwriter but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many written
and electronic copies as such Underwriter may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act;
the Lead Representatives will inform the Company when the Underwriters'
obligation to deliver a prospectus has expired.
(d) Blue Sky Qualifications. The Company will use its reasonable
best efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Lead
Representatives may reasonably designate and to maintain such
qualifications in effect for a period of not less than one year from the
later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign company or corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself
to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the Securities
have been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(e) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the 1933 Act), an earnings statement of the
Company (which need not be audited) complying with Section 11(a) of the
1933 Act and the rules and regulations of the Commission thereunder
(including at the option of the Company, Rule 158).
(f) Reporting Requirements. To furnish to its shareholders as soon
as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries certified
by independent public accountants) and, as soon as
18
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective
date of the Registration Statement), to make available to its shareholders
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; provided, however,
that the foregoing requirements may be satisfied by making such
information available through the Commission's Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇").
Furthermore, from the effective date of the Registration
Statement until the earlier of (x) the three year anniversary of the
Closing Date and (y) the date upon which the Company ceases to have its
common shares registered under the 1934 Act, the Company will furnish to
you copies of all reports or other communications (financial or other)
furnished to shareholders, and to deliver to you (i) as soon as they are
available, copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company
as you may from time to time reasonably request (such financial statements
to be on a consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission); provided, however, that the
Company shall not be required to provide documents (x) that are available
through ▇▇▇▇▇ or (y) the provision of which would require new public
disclosure by the Company under Regulation FD.
(g) Lock-up Period. The Company will not offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of the Common Shares or any securities of the Company
substantially similar to the Common Shares, including but not limited to
any options or warrants to purchase any securities or any securities
convertible into, exchangeable for or that represent the right to receive
any Common Shares or any securities of the Company substantially similar
to the Common Shares, whether now owned or hereinafter acquired, during
the Lock-Up Period, (other than (i) as described in the Registration
Statement, (ii) the Common Shares to be sold by the Company hereunder,
(iii) the grant of awards pursuant to employee benefit plans or
arrangements existing on the date hereof and described in the Pricing
Prospectus and (iv) pursuant to the Backstop Subscription Agreement dated
July 5, 2007 to any shareholder holding Common Shares of the Company as of
such date, except in each case with the prior written consent of the Lead
Representatives; provided, however, that the initial Lock-Up Period will
be automatically extended if: (1) during the last 17 days of the initial
Lock-Up Period, the Company issues an earnings release or announces
material news or a material event or (2) prior to the expiration of the
initial Lock-Up Period, the Company announces that it will release
earnings results during the 15-day period following the last day of the
initial Lock-Up Period, then in each case the Lock-Up Period will be
automatically extended until the expiration of the 18-day period beginning
on the date of earnings release or the announcement of the material news
or material event, as applicable, unless each Lead Representative each
waives, in writing, such extension; the Company will provide each of the
Lead Representatives, the Selling Shareholders and the directors and
officers of the Company who execute and deliver
19
Lock-Up Agreements pursuant to Section 12 hereof prior written notice of
any such announcement giving rise to an extension of the Lock-Up Period.
(h) Net Proceeds. To use the net proceeds received by it from the
sale of the Securities pursuant to this Agreement in the manner specified
in the Pricing Prospectus and Prospectus under the caption "Use of
Proceeds."
(i) Company Logo. Upon request of any Underwriter, to furnish, or
cause to be furnished, to such Underwriter an electronic version of the
Company's official logo for use on the website operated by such
Underwriter for the sole purpose of facilitating the on-line offering of
the Securities (the "License"); provided, however, that the License shall
be used solely for the purpose described above, is granted without any fee
and may not be assigned or transferred.
(j) 462(b). If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the 1933 Act.
SECTION 4. Free Writing Prospectus.
(a) The Company and each of the Selling Shareholders represents and
agrees that, without the prior consent of each Lead Representative, it has not
made and will not make any offer relating to the Securities that would
constitute a "free writing prospectus" as defined in Rule 405 under the 1933
Act; and each Underwriter represents and agrees that, without the prior consent
of the Company and each Lead Representative, it has not made and will not make
any offer relating to the Securities that would constitute a free writing
prospectus; any such free writing prospectus, the use and content of which have
been consented to by the Company and each Lead Representative is listed on
Schedule III hereto.
(b) The Company has complied and will comply with the requirements
of Rule 433 under the 1933 Act applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission or retention where required and
legending; and the Company represents that it has satisfied and agrees that it
will satisfy the conditions under Rule 433 under the 1933 Act to avoid a
requirement to file with the Commission any electronic road show;
(c) The Company agrees that if at any time following issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a result of which
such Issuer Free Writing Prospectus would conflict with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will give prompt
notice thereof to each Lead Representative pursuant to Section 12 and, if
requested by the Lead Representatives, will prepare and furnish without charge
to each Underwriter an Issuer Free Writing Prospectus or other document which
will correct such conflict, statement or omission; provided, however, that
20
this Section 4(c) shall not apply to any statements or omissions in an Issuer
Free Writing Prospectus made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Lead
Representatives expressly for use therein.
SECTION 5. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement, the Prospectus,
the Pricing Prospectus, any Preliminary Prospectus and any Issuer Free Writing
Prospectus, or any further amendments or supplements thereto (including
financial statements and exhibits) as originally filed, (ii) the preparation,
printing and delivery to the Underwriters of this Agreement and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, printing,
issuance and delivery of the certificates for the Securities to the
Underwriters, including any share or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (vii) the fees and expenses of any transfer agent or
registrar for the Securities, (viii) the fees and expenses of the Company
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Securities, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants[, and a proportional share of the cost of any aircraft chartered in
connection with the road show] (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities and (x)
the fees and expenses relating to the engagement and service of the QIU
(including reasonable fees and disbursements of counsel); provided, however,
except as provided in this Section 5 and Sections 7 and 9 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Securities by them,
and any advertising expenses connected with any offers they may make. All
payments to be made by the Company under this Agreement shall be made without
withholding or deduction for or on account of any present or future taxes,
duties or governmental charges whatsoever unless the Company is compelled by law
to deduct or withhold such taxes, duties or charges. In that event, the Company
shall pay such additional amounts as may be necessary in order that the net
amounts received after such withholding or deduction shall equal the amounts
that would have been received if no withholding or deduction had been made.
(b) Expenses of Selling Shareholders. Except as provided in the next
sentence and in Section 7, the Company (as between the Company and the
Underwriters) will pay all expenses relating to the registration of the
Securities of the Selling Shareholders sold hereunder. Each Selling Shareholder
will pay or cause to be paid (i) the underwriting discounts and
21
commissions to be paid to the Underwriters with respect to the Securities to be
sold by such Selling Shareholder, (ii) any stamp duties, capital duties and
stock transfer taxes, if any, payable upon the sale of the Securities to be sold
by such Selling Shareholder to the Underwriters and (iii) the fees and
disbursements of any counsel retained by any of the Selling Shareholders in
connection with the sale of the Securities of the Selling Shareholders sold
hereunder. All payments to be made by the Selling Shareholders under this
Agreement shall be made without withholding or deduction for or on account of
any present or future taxes, duties or governmental charges whatsoever unless
the Selling Shareholder is compelled by law to deduct or withhold such taxes,
duties or charges. In that event, the Selling Shareholder shall pay such
additional amounts as may be necessary in order that the net amounts received
after such withholding or deduction shall equal the amounts that would have been
received if no withholding or deduction had been made.
(c) Allocation of Expenses. The provisions of this Section 5 shall not
supersede or otherwise affect any agreement between the Company and any Selling
Shareholder with respect to the sharing of such costs and expenses.
SECTION 6. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder as to the Securities to be delivered at each Time
of Delivery shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company and each
Selling Shareholder contained herein, are, at and as of each such Time of
Delivery, true and correct, the condition that each of the Company and each
Selling Shareholder shall have performed all of its obligations hereunder
theretofore to be performed, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Prospectus shall
have been filed with the Commission pursuant to Rule 424(b) under the 1933
Act within the applicable time period prescribed for such filing by the
rules and regulations under the 1933 Act and in accordance with Section
3(a) hereof and any other material required to be filed by the Company
pursuant to Rule 433 under the 1933 Act shall have been filed with the
Commission within the applicable time periods prescribed for such filings
by Rule 433; if the Company has elected to rely upon Rule 462(b) under the
1933 Act, the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; no
stop order suspending or preventing the use of the Prospectus or any
Issuer Free Writing Prospectus shall have been initiated or threatened by
the Commission; and all requests for additional information on the part of
the Commission shall have been complied with to the Lead Representatives'
reasonable satisfaction.
(b) Opinion of Counsel for Company. At each Time of Delivery the
Lead Representatives shall have received the written opinion, dated as of
such Time of Delivery, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, outside counsel for
the Company, in the form attached as Exhibit B hereto.
22
(c) Opinion of Bermuda Counsel for Company. At each Time of
Delivery, the Lead Representatives shall have received the written
opinion, dated as of such Time of Delivery, of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇,
special Bermuda counsel for the Company, in the form attached as Exhibit C
hereto.
(d) Opinion of Counsel for Selling Shareholders. At each Time
of Delivery, the Lead Representatives shall have received the written
opinion, dated as of such Time of Delivery, of counsel for each of the
Selling Shareholders, in the form attached as Exhibit D hereto.
(e) Opinion of Counsel for Underwriters. At each Time of
Delivery, the Lead Representatives shall have received the written
opinion, dated as of such Time of Delivery, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, counsel for the Underwriters, in form and substance reasonably
satisfactory to the Lead Representatives, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(f) Officers' Certificate. At each Time of Delivery, the Lead
Representatives shall have received a certificate of the Chief Executive
Officer and the Chief Financial Officer of the Company, dated as of such
Time of Delivery, to the effect that (i) the representations and
warranties in Section 1(a) hereof are true and correct with the same force
and effect as though expressly made at and as of such Time of Delivery,
(ii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to such
Time of Delivery and (iii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or, to the Company's
knowledge, threatened by the Commission.
(g) Secretary's Certificate. At each Time of Delivery, the
Lead Representatives shall have received a certificate of the Secretary of
the Company, dated as of such Time of Delivery, substantially in the form
attached hereto as Exhibit E.
(h) Certificate of Selling Shareholders. At each Time of
Delivery, the Lead Representatives shall have received a certificate of
each Selling Shareholder (or of a duly authorized officer of the Selling
Shareholder, where the Selling Shareholder is not an individual), dated as
of such Time of Delivery, to the effect that (i) the representations and
warranties of such Selling Shareholder contained in Section 1(b) hereof
are true and correct in all respects with the same force and effect as
though expressly made at and as of First Time of Delivery and (ii) such
Selling Shareholder has complied with all agreements and all conditions on
its part to be performed under this Agreement at or prior to such Time of
Delivery.
(i) Accountant's Comfort Letter. On (i) the date of the
Prospectus at a time prior to the execution of this Agreement, (ii) the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement but prior to the
last Time of Delivery and (iii) at each Time of Delivery, each of
PricewaterhouseCoopers and KPMG LLP, who have certified the consolidated
financial
23
statements of the Company and the Talbot Group, respectively, that are
included in the Pricing Prospectus and the Prospectus, as applicable,
shall have furnished to the Lead Representatives a "comfort" letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to the Lead Representatives.
(j) No Objection. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(k) Delivery of Prospectus. The Company shall have complied
with the provisions of Section 3(c) hereof with respect to the furnishing
of prospectuses on the Business Day next succeeding the date of this
Agreement.
(l) Lock-up Agreements. At the date of this Agreement, the
Lead Representatives shall have received Lock-Up Agreements signed by the
persons listed on Schedule V hereto.
(m) No Suspension or Other Occurrences. At or after the
Applicable Time, there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on
the Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the Exchange; (iii) a general moratorium on
commercial banking activities in New York or Bermuda declared by the
relevant authority or a material disruption in commercial banking or
securities settlement or clearance services in the United States or any
other relevant jurisdiction; (iv) the outbreak or escalation of
hostilities involving the United States or Bermuda or the declaration by
the United States or Bermuda of a national emergency or war if the effect
of any such event specified in this clause (iv) in the judgment of the
Lead Representatives is so material and adverse as to make it impractical
or inadvisable to proceed with the public offering or the delivery of the
Securities being delivered at such Time of Delivery on the terms and in
the manner contemplated in the Prospectus; (v) a change or development
involving a prospective change in Bermuda taxation affecting the Company;
(vi) the imposition of exchange controls by the United States or Bermuda;
or (vii) the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States or
currency exchange rates or controls in the United States or Bermuda or
elsewhere, if the effect of any such event specified in this clause in the
judgment of the Lead Representatives is so material and adverse as to make
it impractical or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus.
(n) No Material Adverse Effect. Neither the Company nor any of
its subsidiaries shall have (i) sustained since the date of the latest
audited financial statements included in the Pricing Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Pricing Prospectus; and, (ii)
since the date as of which information is given in the Pricing Prospectus,
there has not been any
24
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change or any development or event
that could reasonably be expected to result in a prospective material
adverse change in the financial condition, results of operations or
business affairs of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
otherwise than as set forth or contemplated in the Pricing Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in
the judgment of the Lead Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus.
(o) No Downgrade. On or after the Applicable Time (i) no
downgrading shall have occurred in the financial strength rating of the
Company or any of its subsidiaries by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the 1933 Act, and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, financial
strength rating of the Company or any of its subsidiaries.
(p) Listing. The Securities to be sold at such Time of
Delivery shall have been duly listed, subject to notice of issuance, on
the Exchange.
SECTION 7. Indemnification and Contribution.
(a) Indemnification of Underwriters.
(i) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, any Issuer Free Writing Prospectus or any "issuer
information" filed or required to be filed pursuant to Rule 433 under the 1933
Act, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred, except that the Company shall not, in connection with any one such
action or proceeding or separate but substantially similar actions or
proceedings arising out of the same general allegations, be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all
indemnified parties, except to the extent that local counsel, in addition to its
regular counsel, is required in order to effectively defend against such action
or proceeding; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer
25
Free Writing Prospectus, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the Lead
Representatives expressly for use therein.
(ii) Each Selling Shareholder will, severally and not jointly,
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or
the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred, except that the Company shall not, in
connection with any one such action or proceeding or separate but substantially
similar actions or proceedings arising out of the same general allegations, be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for all indemnified parties, except to the extent that local counsel,
in addition to its regular counsel, is required in order to effectively defend
against such action or proceeding, but in each case only with reference to
information relating to such Selling Shareholder furnished in writing by or on
behalf of such Selling Shareholder expressly for use in the Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, or any Issuer Free Writing Prospectus
(it being understood and agreed that the only such information furnished by any
such Selling Shareholder consists of the information about such Selling
Shareholder under the caption "Principal and Selling Shareholders" in the
Prospectus (but not the percentage set forth therein)); provided, however, that
with respect to its indemnification obligations hereunder no such Selling
Shareholder shall be required to pay an amount in excess of the gross proceeds
(before deducting expenses) received by such Selling Shareholder from the
Securities sold by it hereunder.
(iii) The Company will indemnify and hold harmless Wachovia Capital
Markets, LLC, in its capacity as QIU, against any losses, claims, damages or
liabilities, joint or several, to which the QIU may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or
the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing
Prospectus or any "issuer information" filed or required to be filed pursuant to
Rule 433 under the 1933 Act, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; or (ii) any act or
omission to act or any alleged act or omission to act by Wachovia Capital
Markets, LLC as QIU in connection with any transaction contemplated by this
Agreement or undertaken in preparing for the purchase, sale and delivery of the
Securities; and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such action or claim as such expenses are incurred, except that the Company
shall not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of
26
more than one separate firm of attorneys at any time for all indemnified
parties, except to the extent that local counsel, in addition to its regular
counsel, is required in order to effectively defend against such action or
proceeding.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter will indemnify and hold harmless the Company and
each Selling Shareholder against any losses, claims, damages or liabilities to
which the Company may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement, or alleged untrue statement or omission, or alleged omission was made
in the Registration Statement, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, or any amendment or supplement thereto, or any
Issuer Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the Lead
Representatives expressly for use therein; and will reimburse the Company and
the Selling Shareholders for any legal or other expenses reasonably incurred by
the Company and the Selling Shareholders in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Actions against Parties; Notification. Promptly after receipt by
an indemnified party under Section 7(a) or (b) of notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such clause, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such clause. In the case of parties
indemnified pursuant to Section 7(a)(i) and (ii), counsel to the indemnified
parties shall be selected by the Lead Representatives; in the case of parties
indemnified pursuant to Section 7(a)(iii), counsel to the indemnified parties
shall be selected by the QIU; and in the case of parties indemnified pursuant to
Section 7(b), counsel to the indemnified parties shall be selected by the
Company and the Selling Shareholders. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such clause for any legal or other
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation; provided, however, (i) if the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action, (ii) if there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the reasonable judgment of such
27
indemnified party for the same counsel to represent both the indemnified party
and the Company, (iii) if both the indemnifying party and the indemnified party
are parties to the same action and one or more defenses may be available to the
indemnified party that would not also be available to the indemnifying party or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party, then such indemnified
party shall be entitled to retain its own counsel at the expense of the
indemnifying party. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim 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 any indemnified
party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders, on the one hand, and the
Underwriters or the QIU, on the other, from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 7(c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Shareholders, on the one hand,
and the Underwriters or the QIU, on the other, in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders, on the one hand, and the Underwriters and the QIU, on the other,
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and each Selling
Shareholder, bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Shareholders, on the one
hand, or the Underwriters or the QIU, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the provisions of this Section 7, no
Selling Shareholder shall be required to pay an amount in excess of the net
proceeds (before deducting expenses) received by such Selling Shareholder from
the shares sold by it hereunder.
The Company, the Selling Shareholders, the Underwriters and the QIU
agree that it would not be just and equitable if contributions pursuant to this
Section 7(d) were determined by pro rata allocation (even if, in the case of the
Underwriters, the Underwriters were treated as
28
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this Section 7(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and (ii) the aggregate amount that
each Selling Shareholder shall be required to contribute shall not exceed the
amount by which the net proceeds (before deducting expenses) received by such
Selling Shareholder from the sale of Securities pursuant to this Agreement after
deducting underwriting commissions and discounts exceeds the amount of any
damages which such Selling Shareholder 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person, if any, who controls an Underwriter or the QIU, as
the case may be, within the meaning of the 1933 Act shall have the same rights
to contribution as such Underwriter or the QIU, as the case may be, and each
officer and director of the Company, and each person, if any, who controls the
Company or any Selling Shareholder within the meaning of the 1933 Act or shall
have the same rights to contribution as the Company or any Selling Shareholder,
as the case may be. The Underwriters' obligations in this Section 7 to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) Control Persons. The obligations of the Company and the Selling
Shareholders under this Section 7 shall be in addition to any liability which
the Company and the respective Selling Shareholders may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter or the QIU, as the case may be, or, within the meaning of the
1933 Act and the obligations of the Underwriters under this Section 7, shall be
in addition to any liability which the respective Underwriters or the QIU may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company or any Selling Shareholder within the meaning of the 1933 Act.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements of the Company, the
Selling Shareholders and the several Underwriters as set forth in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or controlling person, or by or on behalf of the
Company or any Selling Shareholder, and shall survive delivery of the Securities
to the Underwriters.
SECTION 9. Termination of Agreement. If this Agreement is terminated
by the Lead Representatives pursuant to Section 10 hereof, such termination
shall be without liability of any party to any other party except as provided in
Sections 5 and 7 hereof; provided, that, except
29
as provided in Sections 5 and 7 hereof, if for any other reason the Securities
are not delivered by or on behalf of the Company and the Selling Shareholders as
provided herein, the Company will reimburse the Underwriters (other than any
defaulting Underwriter) through the Lead Representatives for all out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred by
the Underwriters in making preparations for the purchase, sale and delivery of
the Securities not so delivered; and provided further that Sections 1, 7 and 8
shall survive termination of this Agreement and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at a Time of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Lead Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters reasonably acceptable to the Company and
the Lead Representatives, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Lead Representatives shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased at such Time of Delivery, each
of the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities is or exceeds 10% of
the number of Securities to be purchased at the First Time of Delivery,
this Agreement or, with respect to any Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Selling
Shareholders to sell the Optional Securities to be purchased and sold on
such Second Time of Delivery shall terminate without liability on the part
of any non-defaulting Underwriter.
No action taken to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Second Time of Delivery,
which does not result in a termination of the obligations of the Underwriters to
purchase and the Selling Shareholders to sell the relevant Optional Securities,
either (i) the Lead Representatives or (ii) the Company and Selling Shareholders
shall have the right to postpone the relevant Time of Delivery for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by Selling Shareholders.
(a) If any Selling Shareholder shall fail at the First Time of
Delivery to sell and deliver the number of Securities which such Selling
Shareholder is obligated to sell
30
hereunder, and the remaining Selling Shareholders do not exercise the right
hereby granted to increase, pro rata or otherwise, the number of securities to
be sold by them hereunder to the total number to be sold by all Selling
Shareholders as set forth in Schedule II hereto, then the Underwriters may, at
option of the Lead Representatives, by notice from the Lead Representatives to
the Company, either (i) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 5,
6, 7 and 8 shall remain in full force and effect or (ii) elect to purchase the
Securities which such Selling Shareholder has agreed to sell hereunder from the
non-defaulting Selling Shareholders. No action taken pursuant to this Section 11
shall relieve such Selling Shareholder from liability, if any, in respect of
such default.
(b) In the event of a default by any Selling Shareholder as referred
to in this Section 11, each of the Lead Representatives and the Company shall
have the right to postpone First Time of Delivery for a period not exceeding
seven days in order to effect any required change in the Registration Statement
or Prospectus or in any other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Lead Representatives at ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention: Registration
Department; and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World
Financial Center, 4 World Financial Center, New York, New York 10080, attention:
Syndicate Department; notices to the Company shall be directed to it at ▇▇
▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, attention: Chief Financial Officer;
and notices to the Selling Shareholders shall be directed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ at ▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇.
SECTION 13. Parties. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters, the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm,
company or corporation, other than the Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Section 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Shareholders
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm, company or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
31
EACH OF THE PARTIES HERETO IRREVOCABLY (i) AGREES THAT ANY LEGAL
SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY BROUGHT BY ANY UNDERWRITER OR BY
ANY PERSON WHO CONTROLS ANY UNDERWRITER ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN ANY
UNITED STATES FEDERAL OR STATE COURT IN THE BOROUGH OF MANHATTAN, THE CITY OF
NEW YORK, STATE OF NEW YORK (A "NEW YORK COURT"), (ii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING AND (iii) SUBMITS TO THE
EXCLUSIVE JURISDICTION OF SUCH NEW YORK COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING. THE COMPANY EXPRESSLY CONSENTS TO THE JURISDICTION OF ANY NEW YORK
COURT IN RESPECT OF ANY SUCH ACTION, AND WAIVES ANY OTHER REQUIREMENTS OF OR
OBJECTIONS TO PERSONAL JURISDICTION WITH RESPECT THERETO.
The Company hereby irrevocably appoints CT Corporation System in New
York City as its agent for service of process in any suit, action or proceeding
described in the preceding paragraph. The Company agrees that service of process
in any such suit, action or proceeding may be made upon it at the office of its
agent. The Company waives, to the fullest extent permitted by law, any other
requirements of or objections to personal jurisdiction with respect thereto. The
Company represents and warrants that its agent has agreed to act as agent for
service of process, and agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect.
SECTION 15. Waiver of Immunity. To the extent that the Company or
any Selling Shareholder has or hereafter may acquire any immunity (sovereign or
otherwise) from any legal action, suit or proceeding, from jurisdiction of any
court of from set-off or any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise) with
respect to itself or any of its property, it irrevocable waives, to the fullest
extent permitted by law, such immunity in respect of its obligations under this
Agreement.
SECTION 16. Judgment Currency. In respect of any judgment or order
given or made for any amount due hereunder that is expressed and paid in a
currency (the "judgment currency") other than United States dollars, the Company
and the Selling Shareholders, as the case may be, will indemnify each
Underwriter against any loss incurred by such Underwriter as a result of any
variation as between (i) the rate of exchange at which the United States dollar
amount is converted into the judgment currency for the purpose of such judgment
or order and (ii) the rate of exchange at which an Underwriter is able to
purchase United States dollars with the amount of the judgment currency actually
received by such Underwriter. The foregoing indemnity shall constitute a
separate and independent obligation of the Company and the Selling Shareholders
and shall continue in full force and effect notwithstanding any such judgment or
order as aforesaid. The term "rate of exchange" shall include any premiums and
costs of exchange payable in connection with the purchase of or conversion into
United States dollars.
SECTION 17. Miscellaneous. The Company and each of the Selling
Shareholders acknowledges and agrees that (i) the purchase and sale of the
Securities pursuant to
32
this Agreement is an arm's-length commercial transaction between the Company and
the Selling Shareholders, on the one hand, and the several Underwriters, on the
other, (ii) in connection therewith and with the process leading to such
transaction each Underwriter is acting solely as a principal and not the agent
or fiduciary of the Company or any of the Selling Shareholders, (iii) no
Underwriter has assumed an advisory or fiduciary responsibility in favor of the
Company or any of the Selling Shareholders with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company or any of the
Selling Shareholders on other matters) or any other obligation to the Company or
any of the Selling Shareholders except the obligations expressly set forth in
this Agreement and (iv) the Company and each of the Selling Shareholders has
consulted its own legal and financial advisors to the extent it deemed
appropriate.
This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company, the Selling Shareholders and the
Underwriters, or any of them, with respect to the subject matter hereof.
The Company, each of the Selling Shareholders and each of the
Underwriters hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
Each of the Company and the Selling Shareholders agrees that it will
not claim that the Underwriters, or any of them, has rendered advisory services
of any nature or respect, or owes a fiduciary or similar duty to the Company, in
connection with such transaction or the process leading thereto.
Time shall be of the essence of this Agreement.
SECTION 18. Effect of Headings. The Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
[Remainder of Page Left Intentionally Blank]
33
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Company and the Selling Shareholders in accordance
with its terms.
Very truly yours,
VALIDUS HOLDINGS, LTD.
By:
--------------------------------------
Name:
Title:
SELLING SHAREHOLDERS NAMED ON SCHEDULE II
HERETO, ACTING SEVERALLY
By:
--------------------------------------
Attorney-in-fact
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
--------------------------------------
(▇▇▇▇▇▇▇, SACHS & CO)
By:
--------------------------------------
(▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED)
For themselves and as Representatives of the other Underwriters named in
Schedule I hereto.
SCHEDULE I
Number of
Number of Selling
Company Shareholders'
Optional Optional
Securities to Securities to be
Number of be Purchased if Purchased if
Firm Over-Allotment Over-Allotment
Securities to Option is Fully Option is Fully
Name of Underwriter be Purchased Exercised Exercised
------------------- ------------ --------- ---------
▇▇▇▇▇▇▇, Sachs & Co. ............
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated...............
Deutsche Bank Securities Inc.....
▇.▇. ▇▇▇▇▇▇ Securities Inc. .....
UBS Securities LLC...............
Wachovia Capital Markets, LLC....
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Securities LLC...................
▇▇▇▇▇▇▇ & Partners Securities,
LLC..............................
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ...
ABN AMRO Rothschild LLC .........
Scotia Capital (USA) Inc. .......
Calyon Securities (USA) Inc......
Comerica Securities, Inc.........
HSBC Securities (USA) Inc. ......
ING Financial Markets LLC........
Total............................ 13,415,501 1,512,325 836,819
Sch I - 1
SCHEDULE II
Number of
Selling
Shareholders'
Optional
Securities to be
Sold if
Number of Over-Allotment
Firm Option is Fully
Name of Selling Shareholder Securities to be Sold Exercised
--------------------------- --------------------- ---------
BERCO Limited (Greenaap)
Caisse de Depot et Placement du
Quebec
Fried ▇▇▇▇▇
▇▇▇▇ Partners
Mercury Trust (▇▇▇▇ ▇▇▇)
New Mountain
Pequot
Total........................... 2,245,462 836,819
Sch II - 1
SCHEDULE III
Issuer Free Writing Prospectuses
1. Electronic roadshow as filed on ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
2. Electronic roadshow as filed on ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
Sch III - 1
SCHEDULE IV
List of Subsidiaries of the Company
Validus Reinsurance, Ltd.
Validus Research Inc.
Validus Specialty Inc.
Talbot Holdings Ltd.
Talbot 2002 Underwriting Capital Ltd.
Talbot Insurance (Bermuda) Ltd.
Talbot Underwriting Holdings Ltd.
Talbot Capital Ltd.
Talbot Underwriting Capital Ltd.
Talbot Underwriting Ltd.
Underwriting Risk Services Ltd.
Talbot Underwriting Services Ltd.
Sch IV - 1
SCHEDULE V
List of Persons and Entities Subject to Lock-Up
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. (▇▇▇▇) ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
C. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ M. ▇▇▇▇
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Allegheny New Mountain Partners (Cayman), L.P.
Aquiline Financial Services Fund L.P.
Aquiline Professionals
Aquiline Limited Partners (1)
BERCO Limited
Caisse de Depot et Placement du Quebec
▇▇▇▇▇ Investments LLC
Chrystallite Investment Pte Ltd
DK Acquisition Partners, L.P.
GMI Investments, Inc.
▇▇▇▇▇▇▇▇▇ Capital Partners II, ▇.▇.
▇▇▇▇▇▇▇▇▇ Capital Partners (Cayman) II, ▇.▇.
▇▇▇▇▇▇▇▇▇ Capital Partners (Executives) II, ▇.▇.
▇▇▇▇▇▇▇▇▇ Capital Partners (Employees) II, L.P.
GSCP V AIV, L.P.
GS Capital Partners V Employees Fund, L.P.
GS Capital Partners V Offshore, L.P.
GS Capital Partners V GmbH & Co. KG
GSCP V Institutional AIV, LTD.
GS Private Equity Partners 1999, L.P.
GS Private Equity Partners 1999 Offshore, L.P.
GS Private Equity Partners 1999--Direct Investments Funds, L.P.
GS Private Equity Partners 2000, L.P.
GS Private Equity Partners 2000 Offshore Holdings, L.P.
GS Private Equity Partners 2000--Direct Investment Fund, ▇.▇.
▇▇▇▇ Partners Corporation
Loeb Marathon Offshore Fund, LTD.
Loeb Marathon Fund, LP
Sch V -1
Loeb Offshore Fund, LTD.
Loeb Arbitrage Fund
Lemming Capital Partners, LLC
Mercury Trust
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ventures L.P. 2001
ML Global Private Equity Fund, L.P.
New Mountain Partners II (Cayman), L.P.
New Mountain Affiliated Investors II (Cayman), L.P.
Pequot Diversified Master Fund, Ltd.
Pequot Core Investors Fund, Inc.
Pequot Institutional Fund, Inc.
Pequot International Fund, Inc.
Pequot Mariner Master Fund, L.P.
Pequot Navigator Offshore Fund, Inc.
Pequot Scout Fund, L.P.
Premium Series PCC Limited - Cell 33
Premium Series PCC Limited - Cell 34
Vestar AIV Employees Validus Ltd.
Vestar AIV Holdings B L.P.
Vestar AIV Holdings A ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇
2005 CGR Partnership
Tiete Representacoes S.A.
SFRi, LLC
Financial Stocks Capital Partners IV L.P.
FFHSJ VA Investment 2005 LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Sch V - 2