Exhibit 1.1
$250,000,000
MONTPELIER RE HOLDINGS LTD.
% SENIOR NOTES DUE 2013
UNDERWRITING AGREEMENT
July -, 2003
July -, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
Credit Suisse First Boston LLC
as representatives of the Underwriters
c/o Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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") $250,000,000 principal amount of its o% Senior Notes
due 2013 (the "SECURITIES") to be issued pursuant to the provisions of an
Indenture dated as of July 15, 2003 (the "BASE INDENTURE") between the Company
and The Bank of New York, as Trustee (the "TRUSTEE") and the First Supplemental
Indenture dated as of July 30, 2003 (the "FIRST SUPPLEMENTAL INDENTURE" and,
together with the Base Indenture, the "INDENTURE") between the Company and the
Trustee.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Securities. 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 Securities is hereinafter referred to as the
"PROSPECTUS". If the Company has filed an abbreviated registration statement to
register additional o% Senior Notes due 2013 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 (A) 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 or (B)
that part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended
(the "TRUST INDENTURE ACT"), of the Trustee.
(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 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
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make such qualification necessary, except to the extent that the failure
to be so qualified or be in good standing would not have a Material
Adverse Effect. Except for Montpelier Holdings (Barbados) SRL and
Montpelier Enterprises (Barbados) Ltd., both of which are immaterial and
are not "significant subsidiaries" of the Company as that term is defined
in Rule 1-02(x) of Regulation S-X of the rules and regulations of the
Commission under the Securities Act, the Designated Subsidiaries are the
only subsidiaries of the Company.
(f) The capitalization of the Company as of June 30, 2003 conforms
in all material respects to the description thereof in the Prospectus. All
of the outstanding common shares of the Company and each Designated
Subsidiary of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. All of the outstanding common shares of
each Designated Subsidiary of the Company are owned directly or indirectly
by the Company free and clear of any claim, lien, encumbrance, security
interest, restriction upon voting or transfer, preemptive rights or any
other claim of any third party.
(g) Except as described in or contemplated by the Registration
Statement and the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement), since the respective
dates as of which information is given in the Prospectus (i) there has not
been any event or development that has had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect and
(ii) there has not been any material change in the long-term debt of the
Company and its combined subsidiaries taken as a whole.
(h) None of (i) the execution or delivery hereof by the Company,
(ii) the consummation of the transactions contemplated hereby; (iii)
compliance by the Company with all of the provisions of this Agreement or
(iv) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Indenture and the Securities (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 Securities, the
filing of the Prospectus under the Bermuda Companies Act 1981 in
connection with the offer and sale of the Securities and permits,
consents, approvals and authorizations which have been obtained, no
permit, consent, approval, authorization or order of any court,
governmental agency or body or financial institution is required in
connection with the consummation of the transactions contemplated by this
Agreement.
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(i) This Agreement has been duly authorized, executed and delivered
by the Company.
(j) The Indenture has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and general principles of equity. The Indenture (i) has been
duly qualified under the Trust Indenture Act, (ii) complies as to form
with the requirements of the Trust Indenture Act and (iii) conforms to the
description thereof in the Registration Statement and the Prospectus.
(k) 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.
(l) On the date hereof and on the Closing Date, each of the Company
and Montpelier Re is and will be solvent and able to pay its liabilities
as they become due.
(m) The Securities have been duly and validly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity. The Securities will conform 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 Securities 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.
(n) 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.
(o) 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
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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.
(p) Each of the Company and the Designated Subsidiaries has (i) all
licenses, certificates, permits, authorizations, approvals, franchises and
other rights from, and has filed all reports, documents and other
information required to be filed pursuant to the applicable laws of
Bermuda and other relevant jurisdictions as is necessary to engage in the
business currently conducted by it in the manner described in the
Prospectus (each, an "AUTHORIZATION"), except where the failure,
individually or in the aggregate, to file such report, document or
information would not have a Material Adverse Effect, (ii) fulfilled and
performed all obligations necessary to maintain each Authorization, except
where the failure to fulfill or perform such obligation, individually or
in the aggregate, would not have a Material Adverse Effect and (iii) no
knowledge of any threatened action, suit, proceeding or investigation that
would reasonably be expected to result in the revocation, termination or
suspension of any Authorization. All such Authorizations are valid and in
full force and effect and the Company and the Designated Subsidiaries are
in compliance in all material respects with the terms and conditions of
all such Authorizations and with the rules and regulations of the
regulatory authorities having jurisdiction with respect thereto, except
where the failure to comply, individually or in the aggregate, would not
have a Material Adverse Effect. The Company has not received any order or
decree from any insurance regulatory agency or body impairing, restricting
or prohibiting the payment of dividends by any Designated Subsidiary to
its parent.
(q) The Company has no knowledge of any threatened or pending
downgrading (i) of Montpelier Re's claims-paying ability rating by A.M.
Best Company, Inc., or of Montpelier Re's financial strength rating by
Standard & Poor's, or of Montpelier Re's financial strength rating by
▇▇▇▇▇'▇ Investor Service, the only "nationally recognized statistical
rating organizations," as such term is defined for purposes of Rule
463(g)(2) under the Securities Act, which currently has publicly released
a rating of the claims-paying ability or financial strength of the Company
or any Designated Subsidiary or (ii) of the rating accorded any of the
Company's or any Designated Subsidiary's securities by any such
organization.
(r) The Company and the Designated Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(s) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
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(t) The Company is not, and after giving effect to the offering and
sale of the Securities 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.
(u) None of the Underwriters or any subsequent purchasers of the
Securities (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 Securities.
(v) There are no currency exchange control laws or withholding taxes
of Bermuda that would be applicable to the payments under the Securities
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 principal amounts of Securities set forth in Schedule I
hereto opposite its name at o% of their principal amount plus accrued interest,
if any, from o , 2003 to the date of payment and delivery.
3. Terms of Public Offering. You advise the Company that the Underwriters
propose to make a public offering of their respective portions of the Securities
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 Securities are to be offered to the public initially at o% of their
principal amount ( the "PUBLIC OFFERING PRICE") plus accrued interest, if any,
from o , 2003 to the date of payment and delivery and to certain dealers you
select at a price that represents a concession not in excess of o% of their
principal amount, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of o% of their principal amount, to any
Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Securities shall be made to the
Company in Federal or other funds immediately available in New York City at
10:00 a.m., New York City time, on August o, 2003 or at such other time on the
same or such other date, not later than August o, 2003, as shall be designated
in writing by you. The date and time of such payment are referred to as the
"CLOSING DATE".
Payment for the Securities shall be made against delivery to you on the
Closing Date for the respective accounts of the several Underwriters of the
Securities registered in such names and in such denominations as you shall
request in writing not less than one full business day prior to the Closing
Date, with any transfer taxes payable in connection with the transfer of the
Securities to the Underwriters duly paid.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Securities to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Securities on the Closing Date
are subject to the condition that the Registration
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Statement shall have become effective not later than 4:00 p.m. (New York City
time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's or any subsidiary's securities or in the Company's or any
subsidiary's financial strength or claims paying ability rating by
any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or results of
operations of the Company and its combined subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Securities
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
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statements in the Prospectus under the headings "Risk Factors - Risks
Related to Taxation" and "Material Tax Considerations - Taxation of the
Company and Montpelier Re" 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.
(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 letters
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
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, 3 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 Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission
and furnish, at its
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own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Securities 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 Securities 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 Securities, 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 September 30, 2004 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or warrants to
purchase or otherwise acquire debt securities of the Company substantially
similar to the Securities (other than the Securities), without the prior
written consent of Banc of America Securities LLC.
(g) 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 Securities 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 Securities 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 Securities under state securities laws and all expenses in
connection with the qualification of the Securities 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, (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
Securities by the National Association of Securities Dealers, Inc., (v)
any fees charged by the rating agencies for the rating of the Securities,
(vi) the cost of
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printing certificates representing the Securities, (vii) the costs and
charges of the Trustee and 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 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 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, transfer taxes payable
on resale of any of the Securities by them and any advertising expenses
connected with any offers they may make.
(h) The Company shall apply the net proceeds from the sale of the
Securities as set forth in the Prospectus.
7. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
each affiliate of any Underwriter within the meaning of Rule 405 under the
Securities Act (collectively, the "INDEMNIFIED UNDERWRITER PARTIES"), 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) arising out of or 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 arising out of 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 arise out of or 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 Securities, 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 Securities to
such person, and if the Prospectus (as
10
so amended or supplemented) would have cured the defect giving rise to
such losses, claims, damages or liabilities, unless the failure to send or
give such Prospectus is the result of noncompliance by the Company with
Section 6(a) hereof.
(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 1) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or 2)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (i) the fees
and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act or who are affiliates of any Underwriter
within the meaning of Rule 405 under the Securities Act and (ii) the fees
and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company
within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons and affiliates
of any Underwriters, such firm shall be designated in writing by Banc of
America Securities LLC. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. 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
11
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 Securities 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 Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of
the Securities (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 Securities. 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 Securities 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). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7, 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
12
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 Securities.
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 Securities 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, any one or more of the Underwriters shall fail or
refuse to purchase Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the principal
amount of Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Securities 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 principal amount of Securities without the
written consent of such Underwriter. If, on the Closing Date, any
13
Underwriter or Underwriters shall fail or refuse to purchase Securities and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Securities 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. 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 reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
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 Securities 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.
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.
(b) The Company irrevocably submits to the non-exclusive
jurisdiction of any New York State or United States Federal court sitting
in The City of New York over any suit, action or proceeding arising out of
or relating to this Agreement, the Prospectus, the Registration Statement
or the offering of the Securities. 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.
14
(c) 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.
15
Montpelier Re Holdings Ltd.
By:
--------------------------------
Name:
Title:
Accepted as of the date hereof
Banc of America Securities LLC
Credit Suisse First Boston LLC
Acting severally on behalf of themselves and
the several Underwriters named in
Schedule I hereto.
By: Banc of America Securities LLC
By:
--------------------------------------
Name:
Title:
16
SCHEDULE I
AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES
UNDERWRITER TO BE PURCHASED
--------------------------------------------------------- --------------------
Banc of America Securities LLC........................... $ -
Credit Suisse First Boston LLC........................... $ -
Barclays Capital Inc..................................... $ -
BNY Capital Markets, Inc. ............................... $ -
Fleet Securities, Inc. .................................. $ -
Banc One Capital Markets, Inc. .......................... $ -
ING Financial Markets LLC ............................... $ -
RBS Securities Inc....................................... $ -
-------------
Total:.......................................... $ 250,000,000
=============
EXHIBIT A
FORM OF OPINION OF LLGM
TO BE DELIVERED PURSUANT
TO SECTION 5(C)
1. None of the issue and sale of the Securities, the execution, delivery
and performance of the Underwriting Agreement by the Company, and compliance by
the Company with the provisions thereof, and the consummation by the Company of
the transactions contemplated therein (A) to our knowledge, requires any
consent, approval, authorization or any other order of, or registration or
filing with, any United States Federal or New York State court, regulatory body
or administrative agency (a "U. S. REGULATORY AUTHORITY"), except for such
consents, approvals, authorizations and orders (i) as have been obtained and
(ii) as may be required under state securities or Blue Sky laws of any
jurisdiction in connection with the purchase and distribution of the Securities
by the Underwriters (as to which we express no opinion), (B) conflicts with or
constitutes a breach of, or a default under, any bond, debenture, note or other
evidence of indebtedness or any agreement, indenture, lease or other instrument
set forth on Schedule I hereto, to the extent such documents are governed by New
York law, except for waivers which have been obtained or (C) to our knowledge,
violates any existing United States Federal or New York State law or regulation
or any ruling, judgment, injunction, order or decree of any U. S. Regulatory
Authority (other than state securities or Blue Sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
underwriters, as to which we express no opinion) that is applicable to the
Company or the Designated Subsidiaries.
2. The Indenture has been duly qualified under the Trust Indenture Act of
1939 and, assuming the due authorization, execution and delivery of the
Indenture by the Company, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws relating to or affecting creditors'
rights generally from time to time in effect and to general principles of
equity, regardless of whether considered in a proceeding in equity or at law);
and, assuming the due authorization of the Notes, the Notes, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters pursuant to the Underwriting Agreement, will
constitute legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
principles of equity, regardless of whether in a proceeding in equity or at
law).
3. The Registration Statement and the Prospectus (except for the financial
statements and notes thereto and the related statements, supporting schedules
and other financial and statistical information included or referred to therein
or omitted therefrom, as to which we express no opinion) comply as to form in
all material respects with the requirements of the Act.
4. To our knowledge, (A) there are no United States Federal or New York
State legal or governmental proceedings pending or threatened against the
Company or any of the Designated Subsidiaries, or to which the Company or any of
the Designated Subsidiaries of any of their respective properties is subject,
that are required to be described in the Registration Statement or Prospectus
and are not so described and (B) there are no agreements, contracts, indentures,
leases or other instruments of a character that are required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required, as the case
may be.
5. The statements relating to United States Federal or New York State
legal matters, proceedings or documents in the Prospectus under the captions
"Regulation -- United States Insurance Regulation", "Description of the Notes"
and "Material Tax Considerations - - Taxation of Noteholders -- United States
Taxation" and " -- United States Taxation of Non-U.S. Noteholders," fairly
summarize in all material respects such matters, proceedings or documents.
6. To the extent that the laws of the State of New York are applicable,
the Company (A) has validly submitted to the non-exclusive jurisdiction of any
New York State or Federal court sitting in The City of New York over any suit,
action or proceeding arising out of or relating to the Underwriting Agreement,
the Prospectus, the Registration Statement or the offering of the Securities,
(B) has validly waived any objection to the venue of a proceeding in any such
New York court, and (C) has duly appointed CT Corporation System as its
authorized agent for the purposes described in the Underwriting Agreement,
assuming (i) the validity of such actions under Bermuda law and (ii) the due
authorization, execution and delivery of the Underwriting Agreement by or on
behalf of the Underwriters.
7. The Company is not, and after giving effect to the offering and sale of
the Securities 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.
In rendering the opinion expressed in paragraph 3 above, we necessarily
assume the correctness and completeness of the statements made by the Company in
the Registration Statement and the Prospectus and assume no responsibility
therefor. In the course of the preparation by the Company of the Registration
Statement and the Prospectus, we have participated in conferences with certain
officers and employees of the Company, with representatives of
PricewaterhouseCoopers, independent auditors for the Company, and with counsel
for the Underwriters, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed and at which we
reviewed certain corporate records, documents and proceedings. Although we have
not undertaken to determine independently, do not express an opinion as to, and
do not assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus except
as stated expressly in paragraph 5 above, we advise you that, based upon our
examination of the Registration Statement and the Prospectus and upon the
above-described procedures, no facts have come to our attention that have caused
us to believe that the Registration Statement (it being understood that we have
not been requested to comment and do not express any comment with respect to the
financial statements and the notes thereto or the related statements, supporting
schedules and other financial and statistical information included or referred
to therein or omitted therefrom), at the time the Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus (it being understood
that we have not been requested to comment and do not express any comment with
respect to the financial statements and the notes thereto or the related
statements, supporting schedules and other financial and statistical information
included
A-2
or referred to therein or omitted therefrom), as of its date and at the
time it was filed with the Commission pursuant to Rule 424(b) under the Act,
contained, or, on the date hereof, contains, an untrue statement of a material
fact or omitted, or, on the date hereof, omits, to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
A-3
SCHEDULE I TO LLGM OPINION
1. Underwriting Agreement.
2. Share Purchase Warrant, dated as of January 3, 2002, between Montpelier
Re Holdings Ltd. (the "COMPANY") and Banc of America Securities LLC, as amended
by Amendment, dated as February 11, 2002, as further amended by Amendment, dated
as of July 1, 2002 as further amended by Amendment dated March 31, 2003.
3. Share Purchase Warrant, dated January 3, 2002, between the Company and
▇▇▇▇▇▇▇▇ Group plc, as amended by Amendment, dated as of February 11, 2002, as
further amended by Amendment, dated as of July 1, 2002 as further amended by
Amendment dated March 31, 2003.
4. Share Purchase Warrant, dated January 3, 2002, between the Company and
White Mountains Insurance Group, Ltd., as amended by Amendment, dated as of
February 11, 2002, as further amended by Amendment, dated as of July 1, 2002 as
further amended by Amendment dated March 31, 2003.
5. Shareholders Agreement, dated as of December 12, 2001, among the
Company and each of the persons listed on Schedule 1 thereto, as amended by
Amendment No. 1, dated December 24, 2001.
6. Service Agreement, dated as of December 12, 2001, between ▇▇▇▇▇▇▇
▇▇▇▇▇▇, the Company and Montpelier Reinsurance Ltd.
7. Service Agreement, dated as of January 24, 2002, between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Montpelier Marketing Services (UK) Limited.
8. Service Agreement, dated as of January 1, 2002, between C. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, III and Montpelier Reinsurance Ltd.
9. Service Agreement, dated as of January 1, 2002, between ▇▇▇▇▇▇ ▇▇▇▇▇▇
Story ▇▇▇▇▇▇ and Montpelier Reinsurance Ltd.
10. Service Agreement, dated as of January 24, 2002, between ▇▇▇▇▇▇ ▇▇▇▇▇▇
Story ▇▇▇▇▇▇ and Montpelier Marketing Services (UK) Limited.
11. Service Agreement, dated as of January 24, 2002, between ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇ and Montpelier Marketing Services (UK) Limited.
12. Service Agreement, dated as of March 18, 2003, between K. ▇▇▇▇▇▇ ▇▇▇▇
and Montpelier Re Holdings Ltd.
13. Credit Agreement, dated as of December 12, 2001, among the Company and
Various Financial Institutions, as amended by Amendment Agreement, dated as of
December 26, 2001, by Second Amendment Agreement, dated as of June 17, 2002 and
by Third Amendment Agreement, dated as of August 1, 2002 and further Amendment
dated as of December 11, 2002.
A-4
14. Letter of Credit Reimbursement and Pledge Agreement, between
Montpelier Re and Fleet National Bank, dated June 20, 2003.
15. Share Option Plan.
16. Performance Unit Plan.
A-5
EXHIBIT B
FORM OF OPINION OF CD&P TO BE DELIVERED PURSUANT TO SECTION 5(D)
1. The Company and Montpelier Re are duly incorporated and validly
existing under the laws of Bermuda in good standing (meaning that
they have not failed to make any required filing with any Bermuda
government authority or to pay any Bermuda government fee or tax
which would make them liable to be struck off the register of
companies maintained by the Registrar under the Act and thereby
cease to exist under the laws of Bermuda).
2. The Company has the necessary corporate power and authority to
execute and file the Registration Statement under the Securities Act
and to enter into and perform its obligations under the Transaction
Agreements and the Securities. Neither the execution and filing
under the Securities Act of the Registration Statement by the
Company, nor the execution and delivery of the Transaction
Agreements and the Securities and the performance by the Company of
its obligations thereunder will violate the Company Constitutional
Documents nor any applicable law, regulation, order or decree in
Bermuda.
3. The Company has taken all corporate action required to authorize its
(i) execution, delivery and performance of the Transaction
Agreements and the Securities; and (ii) execution and filing of the
Registration Statement with the Commission under the Securities Act.
The Transaction Agreements have been duly authorized and executed by
or on behalf of the Company and constitute the valid and binding
obligations of the Company enforceable in accordance with their
terms. The Securities have been duly authorized by the Company for
issuance as contemplated by the Prospectus. The Registration
Statement has been duly executed by or on behalf of the Company.
4. No order, consent, approval, licence, authorisation or validation of
or exemption by any government or public body or authority of
Bermuda or any sub-division thereof is required (i) to authorize or
in connection with the execution and filing of the Registration
Statement, or (ii) in connection with the sale of the Securities
pursuant to the Agreement, or (iii) in connection with the
execution, delivery, performance and enforcement of the Transaction
Agreements and the Securities, except such as have been duly
obtained in accordance with Bermuda law and which are in full force
and effect.
5. The Company and Montpelier Re have the necessary corporate power and
authority and all permits, licenses and authorisations required by
Bermuda law to own or lease their properties and conduct their
business as described in the Prospectus.
6. The statements contained in the Prospectus under the captions
referred to in Schedule 1 hereto, insofar as such statements
constitute a summary of the matters of Bermuda law as so referred
therein, fairly represent a summary of the relevant
Bermuda law or the Constitutional Documents and the Montpelier Re
Constitutional Documents and fairly and accurately present the
information set forth therein in all material respects.
7. There are no Bermuda stamp duty, transfer or similar taxes payable
in respect of delivery of the Securities to the Underwriters or any
subsequent purchasers pursuant to the Agreement (assuming that such
Underwriters or subsequent purchasers of the Securities are not
resident in Bermuda for exchange control purposes). The Agreement is
not subject to ad valorem stamp duty in Bermuda, and no
registration, documentary, recording, transfer or other similar tax,
fee or charge by any Bermuda government authority is payable in
connection with the execution, delivery, filing, registration or
performance of the Agreement.
8. There is no capital gains, income or other tax of Bermuda imposed by
withholding or otherwise on any payment to be made to or by the
Company pursuant to the Agreement.
9. Neither of the Companies is entitled to any immunity under the laws
of Bermuda, whether characterized as sovereign immunity or
otherwise, from any legal proceedings, whether to enforce the
Agreement in respect of the Companies and their respective property.
10. It is not necessary or desirable to ensure the enforceability in
Bermuda of the Transaction Agreements or the Securities that they be
registered in any register kept by, or filed with, any governmental
authority or regulatory body in Bermuda.
11. Consummation of the transactions contemplated by the Underwriting
Agreement, including but not limited to any actions taken pursuant
to the indemnification and contribution provisions set forth
therein, will not constitute unlawful financial assistance by the
Company under Bermuda law.
12. Based solely upon the Constitutional Documents and upon certified
copies supplied to us by the Company of certain correspondence from
the BMA, the Company has been designated as non-resident of Bermuda
for the purposes of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and as
such is free to acquire, hold, transfer and sell foreign currency
and securities without restriction under such legislation (including
the payment of dividends or other distributions which may be
lawfully made by the Company under the Act and the Constitutional
Documents) and is an "exempted company" under the Act.
13. The Company's agreement to the choice of law provisions set forth in
Section 12 of the Agreement is a valid choice of law and would be
recognized and given effect to in any action brought before a court
of competent jurisdiction in Bermuda except for those laws (i) which
such court considers to be procedural in nature, (ii) which are
revenue or penal laws or (iii) the application of which would be
inconsistent with public policy, as such term is interpreted under
the laws of Bermuda. To the extent Bermuda law is applicable, the
submission by the
B-2
Company in the Agreement to the non-exclusive jurisdiction of any
New York State or United States Federal court sitting in The City of
New York, the waiver of any objection related to inconvenient forum
and appointment of an agent for service of process are valid and
binding upon the Company.
14. The courts of Bermuda would recognize as a valid judgment, a final
and conclusive judgment in personam obtained in the federal courts
of New York against the Company based upon the Transaction
Agreements or the Securities under which a sum of money is payable
(other than a sum of money payable in respect of multiple damages,
taxes or other charges of a like nature or in respect of a fine or
other penalty) and would give a judgment based thereon provided that
(a) such courts had proper jurisdiction over the parties subject to
such judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained by
fraud, (d) the enforcement of the judgment would not be contrary to
the public policy of Bermuda, (e) no new admissible evidence
relevant to the action is submitted prior to the rendering of the
judgment by the courts of Bermuda and (f) there is due compliance
with the correct procedures under the laws of Bermuda.
15. The Company has received an assurance from the Ministry of Finance
that in the event of there being enacted in Bermuda any legislation
imposing tax on profits or income or computed on any capital asset,
gain or appreciation, or any tax in the nature of estate duty or
inheritance tax, then the imposition of any such tax shall not be
applicable to the Company or any of its operations or its shares,
debentures or other obligations until March 28, 2016.
B-3
7/29/2003
SCHEDULE 1 TO CD&P OPINION
(a) "Risk Factors -- Risks Related to Our Senior Notes:
- Because of our holding company structure, the notes will be
subordinated to all indebtedness and liability of our subsidiaries;
- We will depend on dividends from Montpelier Re to meet our
obligations under the notes;
- You may have difficulty effecting service of process on us or
enforcing judgments against us in the United States;
(b) "Risks Related to Taxation:
- We may become subject to taxes in Bermuda after 2016, which may
have a material adverse effect on our financial condition;
- The impact of Bermuda's letter of commitment to the Organization
for Economic Cooperation and Development to eliminate harmful tax
practices is uncertain and could adversely affect our tax status in
Bermuda";
(c) "Risks Related to Regulation:
- If we become subject to insurance statutes and regulations in
jurisdictions other than Bermuda or there is a change to Bermuda law
or regulations or application of Bermuda law or regulations, there
could be a significant and negative impact on our business";
(d) "Regulation:
- Bermuda Insurance Regulation,
- Certain Bermuda Law Considerations";
(e) "Material Tax Considerations:
- Taxation of the Company and Montpelier Re
- Taxation of Noteholders - Bermuda Taxation";
(f) "Enforceability of Civil Liabilities under United States Federal
Securities Laws and Other Matters"; and
(g) "Principal Shareholders"
- Footnote (2) to Shareholder table
