Exhibit 10.4
EXECUTION COPY
15,694,800 Shares
MONTPELIER RE HOLDINGS LTD.
Common Shares, Par Value 1/6 cent Per Share
UNDERWRITING AGREEMENT
May 31, 2006

 

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May 31, 2006
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010
Dear Sirs and Mesdames:
     Credit Suisse International (the “Forward Counterparty”) proposes to sell
to Credit Suisse Securities (USA) LLC (the “Underwriter”) 6,800,000 common
shares of Montpelier Re Holdings Ltd., a Bermuda corporation (the “Company”),
par value 1/6 cent per share (the “Firm Hedge Shares”), and, at the option of
the Underwriter, up to an additional 920,000 common shares of the Company, par
value 1/6 cent per share (the “Option Hedge Shares,” and, together with the Firm
Hedge Shares, the “Hedge Shares”). The outstanding common shares of the Company,
par value 1/6 cent per share, are hereinafter referred to as the “Common
Shares.” The Forward Counterparty has entered into two forward stock purchase
agreements, each consisting of a Confirmation (which incorporates the terms of
an ISDA Master Agreement) dated the date hereof, with the Company (each, a
“Forward Purchase Contract”), pursuant to which the Company has agreed to issue,
and the Forward Counterparty has agreed to purchase (subject to the Company’s
right to elect Cash Settlement or Net Share Settlement (as such terms are
defined in the Forward Purchase Contracts)), pursuant to the terms of such
Forward Purchase Contract, a number of Common Shares specified thereunder. The
Forward Counterparty or its affiliates also propose to sell from time to time an
additional 8,894,800 Common Shares, or, if the over-allotment option described
in Section 2 is exercised, 10,115,000 Common Shares (the “Additional Shares,”
and, together with the Hedge Shares, the “Shares”), which the Forward
Counterparty or its affiliates will sell in connection with the Forward Purchase
Contracts.
     The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement, including a prospectus on Form S-3 (File
No. 333-128582), relating to the registration of certain securities described
therein, including the Shares. The registration statement as amended to the date
of this Agreement is hereinafter referred to as the “Registration Statement”
(for purposes of this definition, information contained in a form of prospectus
or prospectus supplement that is deemed retroactively to be a part of the
Registration Statement pursuant to Rule 430B shall be considered to be included
in the Registration Statement as of the time specified in Rule 430B), and the
related prospectus effective October 3, 2005 in the form first used to confirm
sales of Shares (or in the form first made available to the Underwriter by the
Company to meet requests of purchasers pursuant to Rule 173 under the Securities
Act of 1933, as amended (the “Securities Act”)) is hereinafter referred to as
the “Base Prospectus”. The Base Prospectus, as supplemented by the prospectus
supplement specifically relating to the Shares in the form first used to confirm
sales of the Shares (or in the form first made available to the Underwriter by
the Company to meet requests of Purchasers pursuant to Rule 173 under the
Securities Act) is hereinafter referred to as the “Prospectus,” and the term
“preliminary prospectus” means the Base Prospectus, as

 

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supplemented by the Preliminary Prospectus Supplement dated May 31, 2006. For
purposes of this definition, information contained in a form of prospectus
(including a prospectus supplement) that is deemed retroactively to be a part of
the Registration Statement pursuant to Rule 430B shall be considered to be
included in the Prospectus as of the actual time that form of prospectus
(including a prospectus supplement) is filed with the Commission pursuant to
Rule 424(b) under the Securities Act.
     For purposes of this Agreement, “free writing prospectus” has the meaning
set forth in Rule 405 under the Securities Act and “Time of Sale Prospectus”
means the Base Prospectus and the preliminary prospectus, together with the free
writing prospectuses, if any, each identified in Schedule I hereto, as of the
Applicable Time of Sale (as defined herein), and the information set forth in
Schedule II hereto. As used herein, the terms “Registration Statement,”
“preliminary prospectus,” “Time of Sale Prospectus” and Prospectus shall include
the documents, if any, incorporated by reference therein. The terms “supplement”
and “amendment” and “amend” as used in this Agreement with respect to the
Registration Statement, the Base Prospectus, the Time of Sale Prospectus, the
preliminary prospectus or any free writing prospectus shall include all
documents subsequently filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are
incorporated by reference therein. If the Company has filed an abbreviated
registration statement to register additional Shares 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 Underwriter and the Forward
Counterparty 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) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) 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, (iii) 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, (iv) the Time of Sale Prospectus does not, at 5:00 p.m. New York
City time on the date of this Agreement (the “Applicable Time of Sale”), and at
the Closing Date (as defined herein), the Time of Sale Prospectus, as then
amended or supplemented by the Company, 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, and (v) 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

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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, the Time of Sale Prospectus or the Prospectus based upon
information relating to the Underwriter furnished to the Company in writing by
the Underwriter expressly for use therein.
     (c) The Company is a well known seasoned issuer (as defined in Rule 405
under the Securities Act) and is not an “ineligible issuer” pursuant to
Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus
that the Company is required to file pursuant to Rule 433(d) under the
Securities Act has been, or will be, filed with the Commission in accordance
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or on behalf of or used or referred to by
the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Each free writing prospectus that the Company has
filed will not, as of its issue date and through the Closing Date for such
Shares, include any information that conflicts with the information contained in
the Registration Statement and the Prospectus. Except for the free writing
prospectuses, if any, identified in Schedule I hereto, and electronic road
shows, if any, furnished to the Underwriter before first use, the Company has
not prepared, used or referred to, and will not, without the prior consent of
the Underwriter, prepare, use or refer to, any free writing prospectus.
     (d) 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, the Time of Sale Prospectus 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.
     (e) 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 Time of Sale 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 Time of Sale Prospectus and is in good standing in each jurisdiction in
which the character of the business conducted by it or the

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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 consolidated subsidiaries, taken as a whole (a “Material
Adverse Effect”).
     (f) 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 Time
of Sale Prospectus; and the Designated Subsidiaries are duly qualified to do
business as described in the Time of Sale 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 Agency Ltd., all of
which are immaterial and are not “significant subsidiaries” of the Company as
that term is defined in Rule 1-02(w) 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.
     (g) The capitalization of the Company as of March 31, 2006 conforms in all
material respects to the description thereof in the Time of Sale 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.
     (h) Except as described in or contemplated by the Time of Sale Prospectus
and the Prospectus, since the respective dates as of which information is given
in the Time of Sale Prospectus and 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
consolidated subsidiaries taken as a whole.
     (i) None of (i) the execution or delivery hereof by the Company, (ii) the
consummation of the transactions contemplated hereby or (iii) 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, amended and restated 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

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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 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.
     (j) This Agreement has been duly authorized, executed and delivered by the
Company.
     (k) None of the Company or any of its Designated Subsidiaries (i) is in
violation of its memorandum of association or amended and restated 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 authorised share capital of the Company conforms in all material
respects to the description thereof in the Time of Sale Prospectus 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.
     (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

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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.
     (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 Time of Sale 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 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.
     (r) The 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.
     (s) The Company is not, and after giving effect to the offering and sale of
the Shares will not be, required to register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended.
     (t) None of the Underwriter or any subsequent purchasers of the Shares
(other than purchasers resident in Bermuda for Bermuda exchange control
purposes) is subject

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to any stamp duty, excise or similar tax imposed in Bermuda in connection with
the offering, sale or purchase of the Shares.
     (u) 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 Forward Counterparty hereby agrees
to sell to the Underwriter, and the Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby agrees to purchase the Firm Hedge Shares from the
Forward Counterparty at $14.95 per share (the “Purchase Price”). In addition,
the Forward Counterparty agrees to sell to the Underwriter, and the Underwriter,
shall have the option to purchase from the Forward Counterparty, the Option
Hedge Shares at the Purchase Price. The Underwriter may exercise the option to
purchase the Option Hedge Shares at any time at or before the thirtieth day
following the date of this Agreement, by written notice from the Forward
Counterparty to the Underwriter. The Forward Counterparty may sell from time to
time to the Underwriter the Additional Shares.
     The Company hereby agrees that, without the prior written consent of the
Underwriter, it will not, during the period ending 60 days after the date of
this Agreement, (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 Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares, 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 Shares, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise. Each of the
parties hereto hereby acknowledges that the foregoing sentence does not apply to
a share repurchase program by the Company for its Common Shares.
     The restrictions contained in the preceding paragraph shall not apply to
(A) the Shares, the Forward Purchase Contracts, or the Share Issuance Agreement,
dated the date hereof, between the Company and the Forward Counterparty (the
“Share Issuance Agreement”), (B) the issuance by the Company of Common Shares
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriter has been advised in
writing, (C) grants by the Company of employee stock options or other
equity-based compensation pursuant to the terms of a plan in effect on the date
of this Agreement, (D) transactions by persons other than the Company relating
to Common Shares or other securities acquired in open market transactions after
the completion of the offering contemplated by this Agreement, (E) the issuance
by the Company in an underwritten offering of Common Shares or securities
convertible into or exercisable or exchangeable for Common Shares to raise funds
as a result of a large loss event impacting the Company’s reinsurance or
insurance portfolio, where in the good faith judgment of management, such
additional funds are necessary to maintain the Company’s existing ratings or
ratings outlook, (F) the sale of Common Shares pursuant to the Purchase
Agreement dated May 25, 2006, among the Company, WLR Recovery Fund II, L.P. and
WLR Recovery Fund III, L.P., or (G) the filing by the Company of a shelf
registration statement with respect to Common Shares or securities convertible
into or exercisable or exchangeable for Common Shares, provided that the Company
shall not make such a filing

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during the period ending seven days after the date of this Agreement, and
provided further, that the Company agrees that it will not, during the period
ending 60 days after the date of this Agreement, file a registration statement
pursuant to the request of any shareholder under the Shareholders Agreement
dated December 12, 2001 without the prior written consent of the Underwriter.
     3. Intentionally Left Blank
     4. Payment and Delivery. Payment for the Firm Hedge Shares to the Forward
Counterparty shall be made in Federal or other funds immediately available in
New York City against delivery of such shares for the account of the Underwriter
at 10:00 a.m., New York City time, on June 6, 2006 or at such other time on the
same or such other date, not later than June 6, 2006, as shall be designated in
writing by the Underwriter. The date and time of the payment will be referred to
as the “Closing Date.” Payment for the Option Hedge Shares to the Forward
Counterparty shall be made in Federal or other funds immediately available in
New York City against delivery of such shares for the account of the Underwriter
at such date and time specified by the Underwriter in the written notice of the
Underwriter’s election to purchase such Option Hedge Shares. The date and time
of the payment will be referred to as the “Option Closing Date.”
     The Firm Hedge Shares shall be registered in such names and in such
denominations as the Underwriter shall request in writing not later than one
full business day prior to the Closing Date. The Firm Hedge Shares shall be
delivered to the Underwriter on the Closing Date for the its account, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriter duly paid, against payment of the Purchase Price therefor.
     5. Conditions to the Underwriter’s Obligations. The obligations of the
Underwriter are subject to the following conditions:
     (a) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date 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 Time of Sale
Prospectus that, in the judgment of the Underwriter, is material and adverse and
that makes it, in the judgment of the Underwriter, impracticable to market the
Shares on the terms and in the manner contemplated in the Time of Sale
Prospectus.
     (b) The Underwriter 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) 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.

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     (c) The Underwriter shall have received on the Closing Date an opinion from
Davis Polk & Wardwell, outside counsel for the Company, dated the Closing Date,
covering the matters referred to in Exhibit A.
     (d) The Underwriter and the Forward Counterparty shall have received on the
Closing Date an opinion of Conyers Dill & Pearman, special Bermuda counsel to
the Company, dated the Closing Date, substantially in the form of Exhibit B.
     (e) The Underwriter shall have received on the Closing Date an opinion of
LeBoeuf, Lamb, Greene & MacRae LLP, counsel for the Underwriter, dated the
Closing Date, covering the matters referred to in the last paragraph of
Exhibit A.
     (f) The opinions of Davis Polk & Wardwell and Conyers Dill & Pearman shall
be rendered to the Underwriter at the request of the Company and shall so state
therein.
     (g) The Underwriter shall have received, on each of the date of this
Agreement and on the Closing Date, letters dated the respective dates of
delivery thereof, in form and substance satisfactory to the Underwriter and the
Forward Counterparty, 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 Time of
Sale Prospectus and the Prospectus; provided that the letters delivered on the
Closing Date shall use a “cut-off date” not earlier than the date hereof.
     (h) The Company shall have satisfied in all respects the conditions
precedent to effectiveness of the Forward Purchase Contracts, other than with
respect to Section 4(a)(i) thereof, on or before the Closing Date.
     (i) The representation and warranty of the Company in Section 8(c) of the
Share Issuance Agreement shall be true and correct on the Closing Date.
     (j) The “lock-up” agreements, each substantially in the form of Exhibit C
hereto, between the Underwriter and certain executive officers and directors of
the Company relating to sales and certain other dispositions of Common Shares or
certain other securities, delivered to the Underwriter on or before the Closing
Date, shall be in full force and effect on the Closing Date.
     (k) The obligation of the Underwriter to purchase the Option Hedge Shares
hereunder is subject to the delivery to the Underwriter on the Option Closing
Date of such documents as the Underwriter may reasonably request with respect to
the good standing of the Company and Montpelier Re and other matters related to
the delivery of such Option Hedge Shares.
     6. Covenants of the Company. In further consideration of the agreements of
the Underwriter and the Forward Counterparty herein contained, the Company
covenants with the Underwriter and the Forward Counterparty as follows:

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     (a) To furnish to the Underwriter, without charge, 5 conformed copies of
the Registration Statement (including exhibits thereto and documents
incorporated by reference) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto but
including documents incorporated by reference) and to furnish to the Underwriter
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(d) below, as many copies of the Time of Sale Prospectus,
the Prospectus, any documents incorporated therein by reference and any
supplements and amendments thereto or to the Registration Statement as the
Underwriter may reasonably request.
     (b) Before amending or supplementing the Registration Statement, the Time
of Sale Prospectus or the Prospectus, to furnish to the Underwriter a copy of
each such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which the Underwriter reasonably objects, 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) To furnish to the Underwriter a copy of each proposed free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company
and not to use or refer to any proposed free writing prospectus which the
Underwriter has not consented to in advance, which consent shall not be
unreasonably withheld, and to file with the Commission within the applicable
period specified in Rule 433(d) under the Securities Act any free writing
prospectus required to be filed pursuant to such rule.
     (d) Subject to the rights of the Company under Section 4(a) of the Forward
Purchase Contracts, if, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Securities Act or the
Exchange Act or the respective rules thereunder, the Company promptly will
notify the Underwriter of such event, and either (A) (1) prepare and file with
the Commission an amendment or supplement which will correct such statement or
omission or effect such compliance and (2) at its own expense, supply any
supplemented Prospectus to the Underwriter in such quantities as the Underwriter
may reasonably request or (B) instruct the Underwriter and the Forward
Counterparty to discontinue offers and sales of the Additional Shares until such
time as the Company informs the Underwriter and the Forward Counterparty that
offers and sales may be resumed (such days during which offers and sales of the
Additional Shares are so discontinued, “Suspension Days”) and, if the Company
elects to so instruct the Underwriter and the Forward Counterparty, the
Underwriter and the Forward Counterparty shall each follow such instructions.
     (e) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriter shall
reasonably request, provided,

10

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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.
     (f) To make generally available to the Company’s security holders and to
the Underwriter as soon as practicable an earnings statement covering a period
of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the date of this Agreement which shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
     (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 Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, the preliminary
prospectus, the Time of Sale Prospectus, the Prospectus, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company
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 Underwriter, Forward Counterparty and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery of
the Shares to the Underwriter, 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(e) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriter 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 Underwriter
incurred in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) the cost of
printing certificates representing the Shares, (vi) the costs and charges of any
transfer agent, registrar or depositary, (vii) 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 any electronic road show,
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 Underwriter) and
(viii) 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 8 entitled “Indemnity and Contribution”, and the last paragraph
of Section 10 below, the Underwriter will pay all of its costs and expenses,
including fees

11

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and disbursements of its counsel, stock transfer taxes payable on resale of any
of the Shares by it and any advertising expenses connected with any offers it
may make.
     (h) Upon the filing or furnishing by Company with the SEC of a Quarterly
Report on Form 10-Q or a Current Report on Form 8-K (but only with respect to
the items set forth in section 2 thereof), unless at such time all of the
Additional Shares have been sold as contemplated in this Agreement, the
Underwriter may request that the Company deliver, or cause to be delivered, to
the Forward Counterparty (i) a letter confirming as of such date the statements
contained in the last paragraph of the opinion of Davis Polk & Wardwell set
forth on Exhibit A hereto and (ii) a letter dated as of such date from
PricewaterhouseCoopers of the type described in Section 5(g) of this Agreement.
In the event that the Company does not satisfy such request, then the
Underwriter may instruct the Company that each subsequent day, to the date of
delivery, be deemed a Suspension Day.
     (i) To afford the Underwriter, the Forward Counterparty and any affiliates
of the Underwriter or the Forward Counterparty on reasonable notice, a
reasonable opportunity to conduct a due diligence investigation with respect to
the Company customary in scope for transactions pursuant to which the
Underwriter, the Forward Counterparty or any affiliates of the Underwriter or
the Forward Counterparty acts as an underwriter of equity securities (including,
without limitation, the availability of the chief financial officer to respond
to questions regarding the business and financial condition of the Company and
the right to have made available to them for inspection such records and other
information as they may reasonably request).
     (j) The Company is eligible to use free writing prospectuses in connection
with this offering pursuant to Rules 164 and 433 under the Securities Act; any
free writing prospectus that the Company is required to file pursuant to Rule
433(d) under the Securities Act has been, or will be, filed with the Commission
in accordance with the requirements of the Securities Act; and each free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) under the Securities Act or that was prepared by or on behalf of or used
by the Company complies or will comply in all material respects with the
requirements of the Securities Act.
     7. Covenants of the Underwriter. The Underwriter hereby represents and
agrees that:
     (a) It has not made, and will not make any offer relating to the Shares
that would constitute a free writing prospectus, without the prior consent of
the Company, which consent shall not be unreasonably withheld.
     (b) Any free writing prospectus used or referred to by it will not be
subject to broad unrestricted dissemination and will not be required to be filed
with the Commission, in accordance with Rule 433 under the Securities Act, as a
result of any action taken or caused to be taken by the Underwriter, which is
not consented to in advance by the Company.

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     (c) Any free writing prospectus used or referred to by it, except any
“issuer free writing prospectus” as defined in Rule 433 under the Securities
Act, as to which the Underwriter makes no representation or warranty, complied
in all material respects with the Securities Act.
8. Indemnity and Contribution.
     (a) The Company agrees to indemnify and hold harmless the Underwriter and
the Forward Counterparty and each person, if any, who controls the Underwriter
or the Forward Counterparty within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of the
Underwriter or the Forward Counterparty 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,
the preliminary prospectus, the Time of Sale Prospectus, any free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) of the Securities Act or the Prospectus (if used within the periods set
forth in paragraphs (d) of Section 6 hereof and 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 the Underwriter or the Forward
Counterparty furnished to the Company in writing by the Underwriter or the
Forward Counterparty expressly for use therein.
     (b) The Underwriter agrees to indemnify and hold harmless the Company, the
Forward Counterparty, the directors of the Company and the Forward Counterparty,
the officers of the Company who sign the Registration Statement and each person,
if any, who controls the Company or the Forward Counterparty 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 the Underwriter
and the Forward Counterparty, but only with reference to information relating to
the Underwriter furnished to the Company in writing by the Underwriter expressly
for use in the Registration Statement, any preliminary prospectus, the Time of
Sale Prospectus, any other free writing prospectus that the Company has filed or
is required to file pursuant to Rule 433(d) of the Securities Act or the
Prospectus or any amendment or supplement thereto.
     (c) The Forward Counterparty agrees to indemnify and hold harmless the
Company, the Underwriter, the directors of the Company and the Underwriter, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company or the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity in subsection (a) above from the Company to the
Underwriter and the Forward

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Counterparty, but only with reference to information relating to the Forward
Counterparty furnished to the Company in writing by the Forward Counterparty
expressly for use in the Registration Statement, any preliminary prospectus, the
Time of Sale Prospectus, any other free writing prospectus that the Company has
filed or is required to file pursuant to Rule 433(d) of the Securities Act or
the Prospectus or any amendment or supplement thereto.
     (d) 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 8(a) or 8(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 the Underwriter and the Forward Counterparty
and all persons, if any, who control the Underwriter or the Forward Counterparty
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act or who are affiliates of the Underwriter or the Forward
Counterparty 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. In the case of any such separate firm for
the Underwriter and the Forward Counterparty and such control persons and
affiliates of the Underwriter and the Forward Counterparty, such firm shall be
designated in writing by the Underwriter. 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 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

14

--------------------------------------------------------------------------------

 

such proceeding and does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
     (e) To the extent the indemnification provided for in Section 8(a), 8(b),
8(c) or 8(d) 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 indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 8(e)(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 8(e)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties 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 Underwriter and the Forward
Counterparty, as applicable, 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, on the one hand, and the total underwriting discounts
and commissions received by the Underwriter, on the other hand, 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 Underwriter and the Forward Counterparty, as applicable, 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 Underwriter, as applicable, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
     (f) The Company and the Underwriter, as applicable, agree that it would not
be just or equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Section 8(e) 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 8, the Underwriter shall not 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 the 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 8 are not exclusive and

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shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
     (g) The indemnity and contribution provisions contained in this Section 8
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 the Underwriter or any person controlling the Underwriter or
any affiliate of the Underwriter or by or on behalf of the Company, the officers
or directors of the Company or any person controlling the Company, (iii) any
investigation made by or on behalf of the Forward Counterparty or any person
controlling the Forward Counterparty or any affiliate of the Forward
Counterparty or by or on behalf of the Company, the officers or directors of the
Company or any person controlling the Company and (iv) acceptance of and payment
for any of the Shares.
     9. Termination. The Underwriter may terminate this Agreement by notice to
the Company and the Forward Counterparty, 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 the Underwriter’s
judgment, is material and adverse and which, singly or together with any other
event specified in this clause (v), makes it, in the Underwriter’s 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 Time of Sale
Prospectus and the Prospectus.
     If this Agreement shall be terminated by the Underwriter 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 Underwriter for all out-of-pocket expenses (including
the fees and disbursements of their counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder.
     10. Effectiveness. This Agreement shall become effective upon the execution
and delivery hereof by the parties hereto.
     11. Successors and Assigns. This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto 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 the Underwriter shall
be deemed a successor or assign solely by reason of such purchase.
     12. 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.

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     13. 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 Time of Sale Prospectus, any free writing prospectus that the
Company has filed, or is required to file pursuant to Rule 433(d) under the
Securities Act, 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.
     (c) The Company hereby irrevocably appoints CT Corporation System, with
offices at 111 Eighth Avenue, New York, NY 10011, 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.
     14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
     15. No fiduciary duty. The Company acknowledges and agrees that in
connection with this offering, sale of the Shares or any other services the
Underwriter or the Forward Counterparty may be deemed to be providing hereunder,
notwithstanding any preexisting relationship, advisory or otherwise, between the
parties or any oral representations or assurances previously or subsequently
made by the Underwriter or the Forward Counterparty: (i) no fiduciary or agency
relationship between the Company and any other person, on the one hand, and the
Underwriter and the Forward Counterparty, on the other, exists; (ii) the
Underwriter and the Forward Counterparty are not acting as advisor, expert or
otherwise, to the Company, including, without limitation, with respect to the
determination of the Purchase Price, and such relationship between the Company
on the one hand, and the Underwriter and the Forward Counterparty, on the other,
is entirely and solely commercial, based on arms-length negotiations; (iii) any
duties and obligations that the Underwriter or the Forward Counterparty may have
to the Company shall be limited to those duties and obligations specifically
stated herein; and (iv) the Underwriter and the Forward Counterparty and their
affiliates may have interests that differ from those of the Company. The

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Company hereby waives any claims that the Company may have against the
Underwriter or the Forward Counterparty with respect to any breach of fiduciary
duty in connection with the sale of the Shares.
     16. Covenant of the Forward Counterparty. The Forward Counterparty agrees
to provide a report to the Company promptly upon completion of its sale of the
Shares under this Agreement and in connection with the Forward Purchase
Contracts, which report shall include the date of such completion and the price
or prices at which the Shares were sold to the public by the Underwriter or the
Forward Counterparty, as the case may be.

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            Montpelier Re Holdings Ltd.
      By:   /s/ Kernan V. Oberting         Name:   Kernan V. Oberting       
Title:   Chief Financial Officer     

 

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Accepted as of the date hereof

          Credit Suisse Securities (USA) LLC    
 
       
By:
    /s/ Marilyn Hirsch    
 
 
 
   
 
  Name: Marilyn Hirsch    
 
  Title: Managing Director    
 
        Credit Suisse International    
 
       
By:
    /s/ Edmond Curtin    
 
       
 
  Name: Edmond Curtin    
 
  Title: Managing Director    
 
       
By:
    /s/ David Bonham    
 
       
 
  Name: David Bonham    
 
  Title: Director    

 

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SCHEDULE I
Time of Sale Prospectus
     1. Preliminary Prospectus dated May 31, 2006

 

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SCHEDULE II
Time of Sale Information

         
Number of Common Shares being offered by the Forward Counterparty through the
Underwriter
    6,800,000  
 
       
Number of Common Shares being offered by the Forward Counterparty through the
Underwriter if the Underwriter exercises its over-allotment option in full
    7,720,000  
 
       
Price at which the Common Shares are being offered to the public
  $ 15.05  
 
       
Additional Common Shares being offered by the Forward Counterparty through the
Underwriter from time to time for sale in transactions, including block sales,
on the New York Stock Exchange, in the over-the-counter market, in negotiated
transactions or otherwise
    8,894,800  
 
       
Additional Common Shares being offered by the Forward Counterparty through the
Underwriter from time to time for sale in transactions, including block sales,
on the New York Stock Exchange, in the over-the-counter market, in negotiated
transactions or otherwise if the Underwriter exercises its over-allotment option
in full
    10,115,000  
 
       
Minimum number of Common Shares the Company may issue under the Forward Purchase
Contracts
    9,796,388  
 
       
Minimum number of Common Shares the Company may issue under the Forward Purchase
Contracts if the Underwriter exercises its over-allotment option in full
    11,132,259  
 
       
Participation percentage
    61.2245 %

The Company has elected not to make an aggregate payment to the Forward
Counterparty in connection with the Forward Purchase Contracts.

 

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EXHIBIT A
FORM OF OPINION OF DPW
TO BE DELIVERED PURSUANT
TO SECTION 5(C)
     1. The execution, delivery or performance of the Underwriting Agreement by
the Company, compliance by the Company with the provisions thereof, the
consummation by the Company of the transactions contemplated therein do not
(A) to our knowledge, require 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 Shares by the Underwriter (as to which we express no
opinion), (B) conflict with or constitute 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, or (C) to our knowledge,
violate 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 Shares by the Underwriter,
as to which we express no opinion) that is applicable to the Company or the
Designated Subsidiaries.
     2. 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 or 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.
     3. The statements relating to United States Federal or New York State legal
matters, proceedings or documents under the caption “Description of Share
Capital” in the Time of Sale Prospectus and the Prospectus and the caption
“Item 5 – Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities – Shareholders Agreement” in the Form 10-K
for the year ended December 31, 2005, together with the statements in the
Prospectus amending and supplementing such legal matters, proceedings or
documents, fairly summarize in all material respects such matters, proceedings
or documents.
     4. Under present U.S. federal income tax law, the discussions contained
under the captions “Material United States Tax Considerations” and “Risk Factors
– Risks Related to Taxation” in the Time of Sale Prospectus and the Prospectus,
insofar as such discussions purport to summarize the U.S. federal income tax
laws, regulations and rulings referred to therein, fairly summarize such
provisions in all material respects.

A-1

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     5. The statements contained in the Time of Sale Prospectus and the
Prospectus under the captions “The Offering,” “The Forward Sale Agreements” and
“The Share Issuance and Lending Agreement” insofar as they purport to constitute
summaries of certain terms of documents referred to therein, fairly summarize
the terms of such documents in all material respects.
     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 Time of Sale Prospectus, any free writing prospectus the Company has filed,
or is required to file pursuant to Rule 433(d) under the Securities Act, the
Prospectus, the Registration Statement or the offering of the Shares, (B) has
validly waived any objection to the venue of a proceeding in any such New York
court (although any such New York Court may on its own accord find that venue in
a particular case is inappropriate), 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 Underwriter.
     7. The Company is not, and after giving effect to the offering and sale of
the Shares will not be, required to register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended.
     We have not ourselves checked the accuracy, completeness or fairness of, or
otherwise verified, the information furnished with respect to other matters in
the Registration Statement, the Time of Sale Prospectus or the Prospectus,
including the Incorporated Documents. We have generally reviewed and discussed
with your representatives, and with certain officers and employees of, and
counsel and independent public accountants for, the Company the information
furnished, whether or not subject to our check and verification. On the basis of
such consideration, review and discussion, but without independent check or
verification except as stated above, (i) in our opinion, the Registration
Statement and the Prospectus, including the Incorporated Documents (except for
the financial statements and financial schedules and other financial and
statistical data included therein, as to which we express no opinion), appear on
their face to be appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder and (ii) nothing has come to our attention that causes
us to believe that (a) the Registration Statement or the Prospectus included
therein, including the Incorporated Documents (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which we express no belief), as of the date of the
Prospectus Supplement contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (b) the Time of Sale Prospectus,
including the Incorporated Documents (except as stated), as of the Applicable
Time of Sale contained any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (c) the Prospectus, including the Incorporated Documents (except
as stated), as of its date or as of the date hereof contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make

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the statements therein, in the light of the circumstances under which they were
made, not misleading.

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SCHEDULE I TO DPW OPINION
     1. Underwriting Agreement.
     2. Share Purchase Warrant, dated as of January 3, 2002, between Montpelier
Re Holdings Ltd. (the “Company”) and White Mountains Insurance Group, Ltd.
(originally issued to Benfield 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 3, dated as of March 31, 2003.
     3. 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 3, dated as of March 31, 2003.
     4. 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.
     5. Service Agreement, dated as of December 12, 2001, between Anthony
Taylor, the Company and Montpelier Reinsurance Ltd., as further amended by
Amendment, dated as of August 27, 2004.
     6. Service Agreement, dated as of January 24, 2002, between Anthony Taylor
and Montpelier Marketing Services (UK) Limited.
     7. Service Agreement, dated as of January 1, 2002, between C. Russell
Fletcher, III and Montpelier Reinsurance Ltd.
     8. Service Agreement, dated as of January 1, 2002, between Thomas George
Story Busher and Montpelier Reinsurance Ltd.
     9. Service Agreement, dated as of January 24, 2002, between Thomas George
Story Busher and Montpelier Marketing Services (UK) Limited.
     10. Service Agreement, dated as of January 24, 2002, between Nicholas
Newman-Young and Montpelier Marketing Services (UK) Limited.
     11. Share Option Plan, as amended August 27, 2004.
     12. Performance Unit Plan, as amended August 27, 2004.
     13. Second Amended Letter of Credit Reimbursement and Pledge Agreement,
dated as of August 4, 2005, among Montpelier Re Holdings Ltd., the Lenders party
thereto and Bank of America, N.A.
     14. Service Agreement, dated as of August 27, 2004, between Montpelier Re
Holdings Ltd. and Anthony Taylor.

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     15. Service Agreement, dated as of August 27, 2004, between Montpelier
Marketing Services (UK) Limited and Anthony Taylor.
     16. Severance Plan, dated as of August 27, 2004.
     17. Long-Term Incentive Plan, dated as amended August 27, 2004.
     18. Service Agreement, dated as of September 8, 2004, between Montpelier
Reinsurance Ltd. and Kernan V. Oberting.
     19. Letter of Credit Reimbursement and Pledge Agreement, among Montpelier
Reinsurance Ltd. and HSBC Bank USA, National Association, dated December 23,
2004.
     20. Standing Agreement for Letters of Credit by and between Montpelier
Reinsurance Ltd. and The Bank of New York, dated as of October 7, 2005.
     21. Letter of Credit Reimbursement and Pledge Agreement among Montpelier
Reinsurance Ltd., the lenders named therein, Bank of America, N.A., as
Administrative Agent and the other agents named therein, dated November 15,
2005.
     22. Montpelier Re Holdings Ltd. 2005 Annual Bonus Plan.
     23. Montpelier Re Holdings Ltd. Directors Share Plan.
     24. Net Share Settlement Agreement between Montpelier Re Holdings Ltd. and
Anthony Taylor.
     25. Net Share Settlement Agreement between Montpelier Re Holdings Ltd. and
Thomas George Story Busher.
     26. Net Share Settlement Agreement between Montpelier Re Holdings Ltd. and
C. Russell Fletcher III.
     27. Net Share Settlement Agreement between Montpelier Re Holdings Ltd. and
Nicholas Newman-Young.
     28. Montpelier Reinsurance Ltd. Amended and Restated Deferred Compensation
Plan.
     29. Montpelier Re Holdings Ltd. 2006 Annual Bonus Plan.

A-5

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EXHIBIT B
FORM OF OPINION OF CD&P TO BE DELIVERED PURSUANT TO SECTION 5(D)

1.   Each of 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 Documents. Neither the execution and filing under the
Securities Act of the Registration Statement by the Company, nor the execution
and delivery of the Transaction Documents and the performance by the Company of
its obligations thereunder will violate the Constitutional Documents nor any
applicable law, regulation, order or decree in Bermuda.   3.   The Company has
taken all corporate action required to authorise its (i) execution, delivery and
performance of the Transaction Documents; and (ii) execution and filing of the
Registration Statement with the Commission under the Securities Act. The
Transaction Documents have been duly authorised 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 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 authorise or in connection with the execution and filing of the
Registration Statement, or (ii) in connection with the sale of the Shares being
delivered pursuant to the Agreement, or (iii) the execution, delivery,
performance and enforcement of the Transaction Documents, except such as have
been duly obtained in accordance with Bermuda law and which are in full force
and effect.   5.   Each of 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.

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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.   (a)       The authorised capital
of the Company is as set forth in the Prospectus.

  (b)   All of the issued share capital of the Company at the date of the
Company Register was duly authorised, validly issued, and such shares of the
Company were fully paid and non-assessable.     (c)   The Shares conform to the
description thereof in the Prospectus.     (d)   The Company has no obligation
(in the nature of the existence of a pre-emptive or similar right) to offer the
Shares to any shareholder of the Company prior to or upon the sale of the Shares
to the Underwriter pursuant to the Agreement.

8.   There are no Bermuda stamp duty, transfer or similar taxes payable in
respect of the delivery of the Shares to the Underwriter or the Forward
Counterparty or any subsequent purchasers pursuant to the Transaction Documents
(assuming that such Underwriter, Forward Counterparty or subsequent purchasers
of the Shares are not resident in Bermuda for exchange control purposes). The
Transaction Documents are 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 Transaction
Documents.   9.   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 Transaction Documents.   10.   Neither of the Companies
is entitled to any immunity under the laws of Bermuda, whether characterised as
sovereign immunity or otherwise, from any legal proceedings, whether to enforce
the Transaction Documents or otherwise in respect of the Companies and their
respective property.   11.   It is not necessary or desirable to ensure the
enforceability in Bermuda of the Transaction Documents that they be registered
in any register kept by, or filed with, any governmental authority or regulatory
body in Bermuda.

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12.   Consummation of the transactions contemplated by the Transaction
Documents, 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.   13.
  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
Bermuda Exchange Control Act 1972 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.   14.   The Company’s agreement to
the choice of the Foreign Laws as the governing law of the Agreement is a valid
choice of law and would be recognised 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 Company in the
Transaction Documents 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.   15.   The courts of Bermuda
would recognise as a valid judgment, a final and conclusive judgment in personam
obtained in the state or federal courts of New York against the Company based
upon the Transaction Documents 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.   16.   The Company has received an assurance from the Ministry of
Finance that in the event of there being enacted in Bermuda any legislation
imposing

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    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-4

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SCHEDULE I
In the Company’s Current Report on Form 10-K filed with the Commission on
March 14, 2006

(a)   “Risk Factors —Risks Related to Our Common Shares:
–Future sales of common shares may affect their market price,
–There are provisions in our charter documents which restrict the voting rights
of our common shares,
–U.S. persons who own our common shares may have more difficulty in protecting
their interests than U.S. persons who are shareholders of a U.S. corporation,
–You may have difficulty effecting service of process on us or enforcing
judgments against us in the United States,
–We may require our shareholders to sell us their common shares”;   (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 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)   “Dividend Policy”; and   (e)  
“Bermuda Insurance Regulation”.

In the Company’s Prospectus, dated October 3, 2005

(a)   “Material Tax Considerations:
–Taxation of the Company and Montpelier Re — Bermuda
–Taxation of Shareholders — Bermuda Taxation
–Taxation of Holders of Debt Securities – Bermuda Taxation”;   (b)  
“Description of Share Capital”; and   (c)   “Enforcement of Civil Liabilities
Under United States Federal Securities Laws and Other Matters”.

B-5

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EXHIBIT C
Montpelier Re Holdings Ltd.
Public Offering of Common Shares
May           , 2006
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
     The undersigned understands that Credit Suisse Securities (USA) LLC (the
“Underwriter”) has entered 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
Underwriter of shares (the “Offered Shares”) of the Company’s common shares, par
value 1/6 cent per share (the “Common Shares”).
     The undersigned hereby agrees that, without the prior written consent of
the Underwriter, it will not, during the period commencing on May  , 2006 and
ending 60 days after the date of the Underwriting Agreement, (1) offer, pledge,
sell, contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any Common Shares or
any securities convertible into or exercisable or exchangeable for Common
Shares, 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 Shares, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(a) transactions relating to Common Shares or other securities acquired in open
market transactions after the completion of the Public Offering, (b) transfers
of Common Shares or securities convertible into or exercisable or exchangeable
for Common Shares to a family member of the undersigned or trust created for the
benefit of the undersigned or a family member of the undersigned, or
(c) transfers pursuant to a written plan in accordance with Rule 10b5-1(c) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which plan
is in effect prior to the date hereof and about which the Underwriter has been
notified, provided that in the case of any transfer or distribution pursuant to
clause (b), (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 Exchange Act 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 60-day period referred to above).
     In addition, the undersigned agrees that, without the prior written consent
of the Underwriter, it will not, during the period commencing on May  , 2006 and
ending 60 days after the date of the Underwriting Agreement, make any demand for
or exercise any right with respect to, the registration of any Common Shares or
any security convertible into or exercisable or exchangeable for Common Shares.
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 Common Shares except in compliance with the
foregoing restrictions.

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     The undersigned understands that the Company and the Underwriter are
relying upon this Lock-Up Agreement in proceeding towards consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors and assigns.

                  Yours very truly,    
 
           
 
     
 
   
 
      Name:    
 
      Title:    

     
Address:
   
 
         
 
         
 
         

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