Exhibit 1.1
9,524,000 SHARES
MONTPELIER RE HOLDINGS LTD.
COMMON SHARES, PAR VALUE 1/6 CENT PER SHARE
UNDERWRITING AGREEMENT
October -, 2002
October -, 2002
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Banc of America Securities LLC
Credit Suisse First Boston Corporation
▇.▇. ▇▇▇▇▇▇ Securities Inc.
as representatives of the Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Montpelier Re Holdings Ltd., a Bermuda corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "UNDERWRITERS") 9,524,000 of its common shares, par value 1/6 cent
per share (the "FIRM SHARES"). The Company also proposes to issue and sell to
the several Underwriters not more than an additional 1,428,600 of its common
shares, par value 1/6 cent per share (the "ADDITIONAL SHARES") if and to the
extent that you, as Managers of the offering, shall have determined to exercise,
on behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 2 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES." The
common shares, par value 1/6 cent per share of the Company to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to
as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS".
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iii) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) PricewaterhouseCoopers, whose report is included or incorporated
by reference in the Prospectus, is an independent certified public
accountant with respect to the Company and its combined subsidiaries
within the meaning of the Securities Act and the rules and regulations
adopted by the Commission thereunder. The financial statements of the
Company and its combined subsidiaries (including the related notes and
supporting schedules) included in the Registration Statement and the
Prospectus present fairly in all material respects the financial
condition, results of operations and cash flows of the entities purported
to be shown thereby at the dates and for the periods indicated and have
been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated and conform in all material respects with the rules and
regulations adopted by the Commission under the Securities Act; and the
supporting schedules included in the Registration Statement present fairly
in all materials respects the information required to be stated therein.
(d) The Company has been duly organized or formed and is validly
existing in good standing (including as an exempted company) under the
laws of the jurisdiction of its organization or formation, with full power
and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified to do
business as described in the Prospectus and is in good standing in each
jurisdiction in which the character of the business conducted by it or the
location of the properties owned, leased or operated by it make such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the condition (financial or otherwise), results of operations, business
or prospects of the Company and its combined subsidiaries, taken as a
whole (a "MATERIAL ADVERSE EFFECT").
(e) Montpelier Reinsurance Ltd. ("MONTPELIER RE") and Montpelier
Marketing Services (UK) Ltd. (the "DESIGNATED SUBSIDIARIES") have been
duly organized or formed and are validly existing in good standing
(including, in the case of Montpelier Re, as an exempted company) under
the laws of the jurisdictions of their organization or formation, with
full power and authority to own, lease and operate their
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properties and conduct their businesses as described in the Prospectus;
and the Designated Subsidiaries are duly qualified to do business as
described in the Prospectus and are in good standing in each jurisdiction
in which the character of the business conducted by them or the location
of the properties owned, leased or operated by them make such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.
Except for Montpelier Holdings (Barbados) SRL and Montpelier Enterprises
(Barbados) Ltd., both of which are immaterial and are not "significant
subsidiaries" of the Company as that term is defined in Rule 1-02(x) of
Regulation S-X of the rules and regulations of the Commission under the
Securities Act, the Designated Subsidiaries are the only subsidiaries of
the Company.
(f) The capitalization of the Company as adjusted as of June 30,
2002 conforms in all material respects to the description thereof in the
Prospectus. All of the outstanding common shares of the Company and each
Designated Subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. All of the outstanding common
shares of each Designated Subsidiary of the Company are owned directly or
indirectly by the Company free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer, preemptive rights
or any other claim of any third party.
(g) Except as described in or contemplated by the Registration
Statement and the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement), since the respective
dates as of which information is given in the Prospectus (i) there has not
been any event or development that has had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect and
(ii) there has not been any material change in the long-term debt of the
Company and its combined subsidiaries taken as a whole.
(h) None of (i) the execution or delivery hereof by the Company,
(ii) the consummation of the transactions contemplated hereby, (iii) the
issuance and delivery of the Shares by the Company or (iv) compliance by
the Company with all of the provisions of this Agreement, (A) will result
in a breach or violation of, or constitute a default under, the memorandum
of association, bye-laws or other governing documents of the Company or
any of the Designated Subsidiaries, (B) will result in a breach or
violation of, or constitute a default under, any agreement, indenture or
other instrument to which the Company or any of the Designated
Subsidiaries is a party or by which any of them is bound, or to which any
of their properties is subject, (C) will result in a violation of any law,
rule, administrative regulation or decree of any court, or any
governmental agency or body having jurisdiction over the Company, the
Designated Subsidiaries or any of their respective properties, or (D) will
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company, or any Designated
Subsidiary except (other than with respect to clause (A)), as would not
have, individually or in the aggregate, a Material Adverse Effect. Except
for permits, consents, approvals and similar authorizations required by
the securities or "Blue Sky" or insurance securities laws of certain
jurisdictions in connection with the offer and sale of the Shares, the
filing of the Prospectus under the Bermuda Companies Act 1981 in
connection with the offer and sale of the Shares and permits, consents,
approvals and authorizations which have
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been obtained, no permit, consent, approval, authorization or order of any
court, governmental agency or body or financial institution is required in
connection with the consummation of the transactions contemplated by this
Agreement.
(i) This Agreement has been duly authorized, executed and delivered
by the Company.
(j) None of the Company or any of its Designated Subsidiaries (i) is
in violation of its memorandum of association or bye-laws or articles of
association or other governing documents, (ii) is in default and no event
has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant
or condition contained in any agreement, indenture or other instrument to
which it is a party or by which it is bound or to which any of its
properties is subject, except for any such defaults that would not,
individually or in the aggregate, have a Material Adverse Effect, or (iii)
is in violation of any insurance law or insurance regulation to which it
or its property is subject, except for any such violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
(k) On the date hereof and upon the issuance of the Shares, each of
the Company and Montpelier Re is and will be solvent and able to pay its
liabilities as they become due.
(l) The Shares have been duly and validly authorized by the Company
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights. The
authorized capital stock of the Company conforms in all material respects
to the description thereof in the Registration Statement and the
Prospectus. Neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated by this Agreement gives
rise to any rights, other than those that have been duly waived or
satisfied, for or relating to the registration of any securities of the
Company.
(m) There are no contracts or other documents that are required to
be described in the Prospectus or to be filed as exhibits to the
Registration Statement, as the case may be, that have not been described
in the Prospectus or filed as exhibits to the Registration Statement, as
the case may be.
(n) There is no litigation or governmental proceeding pending or, to
the knowledge of the Company, threatened to which the Company or any of
the Designated Subsidiaries is a party or to which any property of the
Company or any of the Designated Subsidiaries is subject that could
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, or which is required to be disclosed in the
Prospectus or the Registration Statement and is not so disclosed.
(o) Each of the Company and the Designated Subsidiaries has (i) all
licenses, certificates, permits, authorizations, approvals, franchises and
other rights from, and has filed all reports, documents and other
information required to be filed pursuant to the
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applicable laws of Bermuda and other relevant jurisdictions as is
necessary to engage in the business currently conducted by it in the
manner described in the Prospectus (each, an "AUTHORIZATION"), except
where the failure, individually or in the aggregate, to file such report,
document or information would not have a Material Adverse Effect, (ii)
fulfilled and performed all obligations necessary to maintain each
Authorization, except where the failure to fulfill or perform such
obligation, individually or in the aggregate, would not have a Material
Adverse Effect and (iii) no knowledge of any threatened action, suit,
proceeding or investigation that would reasonably be expected to result in
the revocation, termination or suspension of any Authorization. All such
Authorizations are valid and in full force and effect and the Company and
the Designated Subsidiaries are in compliance in all material respects
with the terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities having jurisdiction
with respect thereto, except where the failure to comply, individually or
in the aggregate, would not have a Material Adverse Effect. The Company
has not received any order or decree from any insurance regulatory agency
or body impairing, restricting or prohibiting the payment of dividends by
any Designated Subsidiary to its parent.
(p) The Company has no knowledge of any threatened or pending
downgrading of Montpelier Re's claims-paying ability rating by A.M. Best
Company, Inc., the only "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 463(g)(2)
under the Securities Act, which currently rates the claims-paying ability
of the Company or any Designated Subsidiary. No such organization
currently rates any securities of the Company or any Designated
Subsidiary.
(q) The Shares have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
(r) The Company and the Designated Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(s) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(t) The Company is not, and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus will not be, required to register as an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended.
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(u) None of the Underwriters or any subsequent purchasers of the
Shares (other than purchasers resident in Bermuda for Bermuda exchange
control purposes) is subject to any stamp duty, excise or similar tax
imposed in Bermuda in connection with the offering, sale or purchase of
the Shares.
(v) There are no currency exchange control laws or withholding taxes
of Bermuda that would be applicable to the payment of dividends on the
Shares by the Company (other than to residents of Bermuda for Bermuda
exchange control purposes).
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to _______________ Additional
Shares at the Purchase Price. You may exercise this right on behalf of the
Underwriters in whole or from time to time in part by giving written notice of
each election to exercise the option not later than 30 days after the date of
this Agreement. Any exercise notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which such shares are
to be purchased. Each purchase date must be at least one business day after the
written notice is given and may not be earlier than the closing date for the
Firm Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, that Additional Shares are to be purchased
(an "OPTION CLOSING DATE"), each Underwriter agrees, severally and not jointly,
to purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Additional Shares to be purchased on such Option Closing
Date as the number of Firm Shares set forth in Schedule I hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing or (C) grants of employee stock
options or other
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equity-based employee compensation pursuant to the terms of a plan in effect on
the date of this Agreement.
3. Terms of Public Offering. You advise the Company that the Underwriters
propose to make a public offering of their respective portions of the Shares as
soon after the Registration Statement and this Agreement have become effective
as in your judgment is advisable. You further advise the Company that the Shares
are to be offered to the public initially at $_____________ a share (the "PUBLIC
OFFERING PRICE") and to certain dealers selected by you at a price that
represents a concession not in excess of $______ a share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $_____ a share, to any Underwriter or to
certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ____________, 2002, or at
such other time on the same or such other date, not later than _________, 2002,
as shall be designated in writing by you. The date and time of such payment are
referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the corresponding
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than _______, 2002, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE".
Certificates for the Shares shall be in definitive form and registered in
such names and in such denominations as you shall request in writing not later
than one full business day prior to the Closing Date or the applicable Option
Closing Date, as the case may be. The certificates evidencing the Shares shall
be delivered to you on the Closing Date or an Option Closing Date, as the case
may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [4:00 p.m.] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
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(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's or any subsidiary's securities or in the Company's or any
subsidiary's financial strength or claims paying ability rating by
any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or results of
operations of the Company and its combined subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon his or
her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion from LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., outside counsel for
the Company, dated the Closing Date, substantially in the form of Exhibit
A.
(d) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, special Bermuda counsel to the Company,
dated the Closing Date, substantially in the form of Exhibit B.
(e) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special tax counsel to the Company, to
the effect that the statements in the Prospectus under the headings "Risk
Factors - Risks Related to Taxation" and "Material Tax Considerations"
which relate to United States income tax laws, regulations and rulings
fairly summarize in all material respects such laws, regulations and
rulings.
(f) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in the last paragraph of
Exhibit A.
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(g) The opinions of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(h) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the
Underwriters, from PricewaterhouseCoopers, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(i) The "lock-up" agreements, each substantially in the form of
Exhibit C hereto, between you and shareholders, officers and directors of
the Company relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing Date.
(j) The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the
applicable Option Closing Date of such documents as you may reasonably
request with respect to the good standing of the Company and Montpelier
Re, the due authorization and issuance of the Additional Shares to be sold
on such Option Closing Date and other matters related to the issuance of
such Additional Shares.
6. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to you, without charge, 5 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall
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occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which
Shares may have been sold by you on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to material taxation
or service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending December 31, 2003 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the offer and
sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum (such fees and disbursements
of counsel not to exceed $10,000), (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Shares
by the National Association of Securities Dealers, Inc.
10
(such fees and disbursements of counsel not to exceed $[ ]),
(v) all fees and expenses in connection with the preparation
and filing of the registration statement on Form 8-A relating to the
Common Stock and all costs and expenses incident to listing the Shares on
the New York Stock Exchange, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer
agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken
in connection with the marketing of the offering of the Shares, including,
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and half of the cost of any
aircraft chartered in connection with the road show (the remainder to be
for the account of the Underwriters) and (ix) all other costs and expenses
incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 7
entitled "Indemnity and Contribution", and the last paragraph of Section 9
below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
7. Indemnity and Contribution. (a) (i) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and each affiliate of any Underwriter within the meaning of Rule 405
under the Securities Act, from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims,
11
damages or liabilities, unless the failure to send or give such Prospectus is
the result of noncompliance by the Company with Section 6(a) hereof.
(ii) The Company also agrees to indemnify and hold harmless
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and each
person, if any, who controls ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments incurred as a result of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇
participation as a "qualified independent underwriter" within the
meaning of Rule 2720 of the National Association of Securities
Dealers' Conduct Rules in connection with the offering of the
Shares, except for any losses, claims, damages, liabilities, and
judgments resulting from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ or such controlling
person's willful misconduct or gross negligence.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the directors of the Company, the officers
of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Underwriter, but only
with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use
in the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 7(a) or 7(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Notwithstanding anything contained
herein to the contrary, if indemnity may be sought pursuant to Section
7(a)(ii) hereof in respect of such action or proceeding, then in addition
to such separate firm for the indemnified parties, the indemnifying party
shall be liable for the reasonable fees and expenses of not more than one
separate firm (in addition to any local counsel) for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in its
capacity as a "qualified independent underwriter" and all persons, if any,
who control ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ within the
12
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act. Such firm or firms shall be designated in writing by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, in the case of parties indemnified pursuant to
Section 7(a), and by the Company, in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement
or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 7(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear
to the aggregate Public Offering Price of the Shares. The relative fault
of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 7(d)(i).
The amount paid or payable by an indemnified party as a
13
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or any affiliate of any Underwriter or by or
on behalf of the Company, the officers or directors of the Company or any
person controlling the Company and (iii) acceptance of and payment for any
of the Shares.
8. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a material disruption in the
securities settlement, payment or clearance services in the United States shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by Federal or New York State or Bermuda authorities or (v) there
shall have occurred any outbreak or escalation of hostilities, or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall
14
be obligated severally in the proportions that the number of Firm Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will be responsible, jointly and severally, for
reimbursing the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
10. Successors and Assigns. This Agreement shall be binding upon and inure
solely to the benefit of, the Underwriters and the Company, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign solely by reason of such
purchase.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
15
12. Applicable Law; Submission to Jurisdiction; Appointment of Agent for
Service. (a)This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
(a) The Company irrevocably submits to the non-exclusive
jurisdiction of any New York State or United States Federal court sitting
in The City of New York over any suit, action or proceeding arising out of
or relating to this Agreement, the Prospectus, the Registration Statement
or the offering of the Shares. The Company irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an
inconvenient forum. To the extent that the Company has or hereafter may
acquire any immunity from the jurisdiction of any court or from any legal
process with respect to itself or its property, it irrevocably waives, to
the fullest extent permitted by law, such immunity in respect of any such
suit, action or proceeding.
(b) The Company hereby irrevocably appoints CT Corporation System,
with offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as its agent for
service of process in any suit, action or proceeding described in the
preceding paragraph. The Company agrees that service of process in any
such suit, action or proceeding may be made upon it at the office of its
agent. The Company waives, to the fullest extent permitted by law, any
other requirements of or objections to personal jurisdiction with respect
thereto. The Company represents and warrants that its agent has agreed to
act as agent for service of process, and each agrees to take any and all
action, including the filing of any and all documents and instruments,
that may be necessary to continue such appointment in full force and
effect.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Montpelier Re Holdings Ltd.
By:
-----------------------
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Banc of America Securities LLC
Credit Suisse First Boston Corporation
▇.▇. ▇▇▇▇▇▇ Securities Inc.
16
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
------------------------------------
Name:
Title:
17
SCHEDULE I
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.............................
Banc of America Securities LLC................................
Credit Suisse First Boston Corporation........................
▇.▇. ▇▇▇▇▇▇ Securities Inc....................................
---------------
Total:...............................................
===============
A-1
EXHIBIT A
[LLGM OPINION]
A-1
EXHIBIT B
[CD&P OPINION]
B-1
EXHIBIT C
[FORM OF LOCK-UP LETTER]
____________, 2002
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
as representative of the Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Montpelier Re Holdings Ltd., a Bermuda
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"UNDERWRITERS"), of __________ shares (the "OFFERED SHARES") of the Common
Stock, par value $0.01 per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on
behalf of the Underwriters, it will not, during the period commencing on the
date of the preliminary prospectus relating to the Public Offering and ending
180 days after the date of the final prospectus relating to the Public Offering
(the "PROSPECTUS"), (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (a) the sale of any Offered Stock to the
Underwriters pursuant to the Underwriting Agreement, (b) transactions relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering, (c) transfers of
Common Stock or securities convertible into or
2
exercisable or exchangeable for Common Stock to a family member of the
undersigned or trust created for the benefit of the undersigned or a family
member of the undersigned or (d) transfers of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock to an affiliate
of the undersigned, provided that in the case of any transfer or distribution
pursuant to clause (c) or (d), (i) each transferee agrees to be bound by the
terms of this agreement and (ii) no filing by any party (transferee or
transferor) under Section 16(a) of the Securities Exchange Act of 1934 shall be
required or shall be made voluntarily in connection with such transfer or
distribution (other than a filing on Form 5 made after the expiration of the
180-day period referred to above).
In addition, the undersigned agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the
period commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's shares of Common
Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
shall be binding upon the undersigned's heirs, legal representatives, successors
and assigns. This Lock-Up Agreement shall lapse and become null and void if the
Public Offering has not occurred on or before November 30, 2002.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
---------------------------
(Name)
---------------------------
(Address)
3