Document:

EX-10.3

 

Exhibit 10.3

EXECUTION VERSION

ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (as the same may be amended or modified from time to time pursuant
hereto, this “Agreement”) is made and entered into as of March 5, 2008, by and among
MarketAxess Technologies Inc., a Delaware corporation (“Buyer”), Braden Janowski, solely in
his capacity as Sellers’ Representative (“Sellers’ Representative”) (Buyer and Sellers’
Representative are sometimes referred to individually as a “Party” and collectively as the
“Parties”), and JPMorgan Chase Bank, National Association (the “Escrow Agent”).

     WHEREAS, pursuant to that certain Stock Purchase and Investment Agreement, dated as of the
date hereof (the “Stock Purchase Agreement”), among Buyer, Sellers’ Representative, the
Sellers listed on the signature pages thereto (the “Sellers”) and Greenline Financial
Technologies, Inc., an Illinois corporation, the Sellers have agreed to sell to Buyer, and Buyer
has agreed to purchase from the Sellers, all of the issued and outstanding capital stock of
Greenline Financial Technologies, Inc.; and

     WHEREAS, in order to secure certain obligations of the Sellers pursuant to the Stock Purchase
Agreement, a portion of the purchase price payable by Buyer pursuant to the Stock Purchase
Agreement is to be deposited into an escrow account subject to the terms and conditions set forth
herein.

     NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:

     1. Appointment. The Parties hereby appoint the Escrow Agent as their escrow agent for the
purposes set forth herein, and the Escrow Agent hereby accepts such appointment under the terms and
conditions set forth herein.

     2. Funds. Simultaneously with the execution and delivery of this Agreement, Buyer is
depositing with the Escrow Agent cash in the following amounts: (i) $2,000,000 (the “Indemnity
Deposit”) and (ii) $250,000 (the “Working Capital Deposit” and, together with the
Indemnity Deposit, the “Deposits”). The Escrow Agent shall hold the Indemnity Deposit and
the Working Capital Deposit in separate accounts, subject to the terms and conditions hereof, and
shall invest and reinvest the Deposits and the respective proceeds thereof as directed in Section
3. These amounts, including interest and other earnings thereon but net of any distributions from
time to time pursuant to the terms of this Agreement, shall respectively be known as the “Indemnity
Fund” and the “Working Capital Fund” and, together, the “Funds.” The Indemnity Fund shall be held
in escrow as partial security for certain indemnification obligations of the Sellers, and the
Working Capital Fund shall be held in escrow as partial security for obligations of the Sellers to
pay certain amounts in respect of certain working capital adjustments.

     3. Investment of Funds. During the term of this Agreement, the Funds shall be invested and
reinvested by Escrow Agent in such investments as shall be directed in joint written investment
instructions from Buyer and Sellers’ Representative. In the absence of joint written instructions
from Buyer and Sellers’ Representative, the Funds shall be
invested in a JPMorgan Chase Bank, N.A.
money market deposit

 

 

account (“MMDA”) or a successor or similar investment offered by the
Escrow Agent, unless otherwise instructed in writing by the Parties and as shall be acceptable to
the Escrow Agent. The Escrow Agent will provide compensation on balances in the Funds at a rate
determined by the Escrow Agent from time to time. Written investment instructions, if any, shall
specify the type and identity of the investments to be purchased and/or sold. The Escrow Agent is
hereby authorized to execute purchases and sales of investments through the facilities of its own
trading or capital markets operations or those of any affiliated entity. The Escrow Agent or any
of its affiliates may receive compensation with respect to any investment directed hereunder
including without limitation charging an agency fee in connection with each transaction. The
Parties recognize and agree that the Escrow Agent will not provide supervision, recommendations or
advice relating to either the investment of moneys held in the Funds or the purchase, sale,
retention or other disposition of any investment described herein. The Escrow Agent shall not have
any liability for any loss sustained as a result of any investment in an investment made pursuant
to the terms of this Agreement or as a result of any liquidation of any investment prior to its
maturity or for the failure of the Parties to give the Escrow Agent instructions to invest or
reinvest the Funds. The Escrow Agent shall have the right to liquidate any investments held in
order to provide funds necessary to make required payments under this Agreement. Receipt,
investment and reinvestment of the Deposits shall be confirmed by Escrow Agent as soon as
practicable by account statement, and any discrepancies in any such account statement shall be
noted by Parties to Escrow Agent within thirty (30) calendar days after receipt thereof. Failure
to inform Escrow Agent in writing of any discrepancies in any such account statement within said
thirty (30) day period shall conclusively be deemed confirmation of such account statement in its
entirety.

     4. Disposition of the Working Capital Fund. The Escrow Agent shall hold the Working Capital
Fund in its possession until authorized hereunder to deliver the amounts held in the Working
Capital Fund. If the Escrow Agent receives a certificate signed by an officer of Buyer and
Sellers’ Representative, directing the Escrow Agent to pay all or a portion of the Working Capital
Fund to Buyer or to Sellers’ Representative (on behalf of the Sellers), the Escrow Agent shall
immediately deliver such amount(s) as directed in such certificate.

     5. Disposition of the Indemnity Fund. The Escrow Agent shall hold the Indemnity Fund in its
possession until authorized hereunder to deliver the amounts held in the Indemnity Fund as follows:

          (a) If the Escrow Agent receives a certificate signed by an officer of Buyer and Sellers’
Representative, directing the Escrow Agent to pay all or a portion of the Indemnity Fund to Buyer
or to Sellers’ Representative (on behalf of the Sellers), the Escrow Agent shall immediately
deliver such amount(s) as directed in such certificate.

          (b) If at any time or from time to time on or before March 5, 2009 Buyer shall give notice to
the Escrow Agent and the Sellers’ Representative asserting that it is entitled to
indemnification pursuant to the Stock Purchase Agreement and demanding payment from the
Indemnity Fund, the Escrow Agent promptly shall deliver a copy of that notice to Sellers’
Representative, and, unless within fifteen (15) Business Days after delivery of the copy to
Sellers’ Representative the Escrow Agent receives from Sellers’ Representative a notice

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disputing
Buyer’s right to all or a portion of the amount demanded, the Escrow Agent shall pay to Buyer from
the Indemnity Fund promptly after expiration of that fifteen (15) Business Day period the full
amount requested by Buyer. Any notice from Buyer to the Escrow Agent pursuant to this Section 5(b)
shall set forth in reasonable detail the nature of the event or the circumstances giving rise to
Buyer’s claim for indemnification, and the dollar amount of cash that is being requested to be
delivered to Buyer from the Indemnity Fund.

          (c) If, during the fifteen (15) Business Day period referred to in Section 5(b), the Escrow
Agent receives notice from Sellers’ Representative disputing Buyer’s right to all or any portion of
the payment demanded by Buyer (either because the claim or the amount of the claim is disputed or
otherwise), the Escrow Agent promptly shall forward to Buyer a copy of the notice from Sellers’
Representative, shall pay to Buyer (from the Indemnity Fund) promptly after the date of the notice
any undisputed portion of the amount demanded by Buyer, and shall continue to hold the disputed
amount in the Indemnity Fund until receipt of instructions signed by Buyer and Sellers’
Representative or a copy of a final, non-appealable order of a court of competent jurisdiction
setting forth the manner in which the Escrow Agent shall dispose of the disputed amount. Upon
receipt of any such instructions or order, the Escrow Agent promptly shall comply with its terms.
Any notice from Sellers’ Representative disputing Buyer’s right to all or any portion of the
payment demanded by Buyer shall set forth in reasonable detail the item(s) and amount(s) disputed
by Sellers’ Representative. Buyer and Sellers’ Representative shall try in good faith to
expeditiously resolve the claim.

          (d) If, at the time a notice is given by Buyer under Section 5(b), all or any portion of the
amount of the loss, liability, damage or expense suffered or incurred or to be suffered or incurred
as a result of the event or circumstance giving rise to Buyer’s claim for indemnification cannot be
determined with reasonable certainty, Buyer may include in the notice a good faith estimate of such
loss, liability, damage or expense and state in the notice that it is not then demanding payment
from the Indemnity Fund of that estimated amount. The Escrow Agent promptly shall deliver a copy
of that notice to Sellers’ Representative as required by Section 5(b), but Sellers’ Representative
shall not be required to dispute Buyer’s right to payment, and the Escrow Agent shall not make any
payment to Buyer in respect of the estimated amount, unless and until Buyer sends a subsequent
notice under Section 5(b) demanding payment from the Indemnity Fund. Any such subsequent notice
shall specifically reference the prior notice and state that it amends and supersedes the prior
notice in the manner and to the extent set forth therein and the Escrow Agent promptly shall
deliver a copy to Sellers’ Representative, and the procedure in Section 5(b) shall apply. For
purposes of this Section 5(d), the amount demanded in the subsequent notice shall supersede the
estimated amount in the original notice as and to the extent provided in the subsequent notice.

          (e) On March 6, 2009, the Escrow Agent shall pay to Sellers’ Representative from the Indemnity
Fund the amount by which the Indemnity Fund exceeds the amount of all pending, undetermined and/or
unpaid claims previously asserted by Buyer in notices given
pursuant to Section 5(b) or 5(d) on or before March 5, 2009. Undisputed amounts held in the
Indemnity Fund shall be paid to Buyer in accordance with the procedures set forth in Sections 5(b)
and 5(d) above, and the balance of the Indemnity Fund shall be held by the Escrow Agent until
receipt of instructions signed by Buyer and Sellers’ Representative or a copy of a final,
non-appealable order of a court of competent jurisdiction

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setting forth the determination of each
of Buyer’s claims. Upon receipt of such instructions or order in respect of any claim, the Escrow
Agent shall promptly comply with its terms.
Upon delivery of all amounts held in the Indemnity Fund by the Escrow Agent in accordance with this
Section 5, this Agreement shall terminate, subject to the provisions of Sections 8 and 9.

     6. Escrow Agent. (a) The Escrow Agent shall have only those duties as are specifically and
expressly provided herein, which shall be deemed purely ministerial in nature, and no other duties
shall be implied. The Escrow Agent shall neither be responsible for, nor chargeable with,
knowledge of, nor have any requirements to comply with, the terms and conditions of any other
agreement, instrument or document between the Parties, in connection herewith, if any, including
without limitation the Stock Purchase Agreement, nor shall the Escrow Agent be required to
determine if any person or entity has complied with any such agreements, nor shall any additional
obligations of the Escrow Agent be inferred from the terms of such agreements, even though
reference thereto may be made in this Agreement. In the event of any conflict between the terms
and provisions of this Agreement, those of the Stock Purchase Agreement, any schedule or exhibit
attached to this Agreement, or any other agreement among the Parties, the terms and conditions of
this Agreement shall control; provided, however, that as between Buyer and Sellers’
Representative, the Stock Purchase Agreement shall control in the event of any such disputes. The
Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any
written notice, document, instruction or request furnished to it hereunder and believed by it to be
genuine and to have been signed or presented by the proper Party or Parties without inquiry and
without requiring substantiating evidence of any kind. The Escrow Agent shall be under no duty to
inquire into or investigate the validity, accuracy or content of any such document, notice,
instruction or request. The Escrow Agent shall have no duty to solicit any payments which may be
due it or the Funds, including, without limitation, the Deposits nor shall the Escrow Agent have
any duty or obligation to confirm or verify the accuracy or correctness of any amounts deposited
with it hereunder. The Escrow Agent shall have no duty or obligation to make any calculations of
any kind hereunder.

          (b) The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken
by it except to the extent that a final adjudication of a court of competent jurisdiction
determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of
any loss to either Party. The Escrow Agent may execute any of its powers and perform any of its
duties hereunder directly or through agents or attorneys, and shall be liable only for its gross
negligence or willful misconduct (as finally adjudicated in a court of competent jurisdiction) in
the selection of any such agent or attorney. The Escrow Agent may consult with counsel,
accountants and other skilled persons to be selected and retained by it. The Escrow Agent shall
not be liable for any action taken, suffered or omitted to be taken by it in accordance with, or in
reliance upon, the advice or opinion of any such counsel, accountants or other skilled persons,
except in cases of the Escrow Agent’s gross negligence or willful misconduct. In the
event that the Escrow Agent shall be uncertain or believe there is some ambiguity as to its
duties or rights hereunder or shall receive instructions, claims or demands from any party hereto
which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled
to refrain from taking any action and its sole obligation shall be to keep safely all property held
in escrow until it shall be given a direction in writing by the Parties which eliminates such
ambiguity or uncertainty to the satisfaction

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of the Escrow Agent or by a final and non-appealable
order or judgment of a court of competent jurisdiction. The Parties agree to pursue any redress or
recourse in connection with any dispute without making the Escrow Agent a party to the same.
Anything in this Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be
liable for special, incidental, punitive, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised
of the likelihood of such loss or damage and regardless of the form of action.

     7. Succession. (a) The Escrow Agent may resign and be discharged from its duties or
obligations hereunder by giving thirty (30) days advance notice in writing of such resignation to
the Parties specifying a date when such resignation shall take effect. If the Parties have failed
to appoint a successor escrow agent prior to the expiration of thirty (30) days following receipt
of the notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for
the appointment of a successor escrow agent or for other appropriate relief, and any such resulting
appointment shall be binding upon all of the parties hereto. The Escrow Agent’s sole
responsibility after such thirty (30) day notice period expires shall be to hold the Funds (without
any obligation to reinvest the same) and to deliver the same to a designated substitute escrow
agent, if any, or in accordance with the directions of a final order or judgment of a court of
competent jurisdiction, at which time of delivery the Escrow Agent’s obligations hereunder shall
cease and terminate, subject to the provisions of Sections 8 and 9 hereunder. The Escrow Agent
shall have the right to withhold an amount equal to any undisputed amount due and owing to the
Escrow Agent, plus any costs and expenses the Escrow Agent incurs in connection with the
termination of the Agreement.

          (b) Any entity into which the Escrow Agent may be merged or converted or with which it may be
consolidated, or any entity to which all or substantially all the escrow business may be
transferred, shall be the Escrow Agent under this Agreement without further action by the Escrow
Agent or the Parties.

     8. Compensation and Reimbursement. The fees and expenses of the Escrow Agent shall be paid
fifty percent (50%) by the Buyer and fifty percent (50%) by the Sellers’ Representative, on behalf
of the Sellers. The fees and expenses of the Escrow Agent include (a) payment of the Escrow Agent
upon execution of this Agreement and from time to time thereafter reasonable compensation for the
services to be rendered hereunder, which unless otherwise agreed in writing shall be as described
in Schedule 2 attached hereto, and (b) payment or reimbursement the Escrow Agent upon request for
all expenses, disbursements and advances, including, without limitation reasonable attorney’s fees
and expenses, incurred or made by it in connection with the preparation, negotiation, execution,
performance, delivery, modification and termination of this Agreement. The Parties hereby grant the
Escrow Agent a lien on, right of set-off against and security interest in, the Funds for the
payment of any claim for compensation, expenses and amounts due hereunder. In furtherance of the
foregoing, the Escrow Agent is expressly authorized and directed, but shall not be obligated, to charge against and withdraw
from the Funds for its own account any amounts due to the Escrow Agent under this Section 8. The
obligations contained in this Section 8 shall survive the termination of this Agreement and the
resignation, replacement or removal of the Escrow Agent.

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     9. Indemnity. The Parties shall jointly and severally indemnify, defend and save harmless the
Escrow Agent and its affiliates and their respective successors, assigns, directors, officers,
managers, attorneys, accountants, experts, agents and employees (the “Indemnitees”) from
and against any and all losses, damages, claims, liabilities, penalties, judgments, settlements,
actions, suits, proceedings, litigation, investigations, costs or expenses (including, without
limitation, the reasonable fees and expenses of counsel and experts and their staffs and all
expense of document location, duplication and shipment) (collectively “Escrow Agent
Losses”) arising out of or in connection with (a) the Escrow Agent’s execution and performance
of this Agreement, tax reporting or withholding, the enforcement of any rights or remedies under or
in connection with this Agreement, or as may arise by reason of any act, omission or error of the
Indemnitee, except in the case of any Indemnitee to the extent that such Escrow Agent Losses are
finally adjudicated by a court of competent jurisdiction to have been primarily caused by the gross
negligence or willful misconduct of such Indemnitee, or (b) its following any instructions or other
directions, whether joint or singular, from the Parties, except to the extent that its following
any such instruction or direction is expressly forbidden by the terms hereof, provided
that, in so agreeing to indemnify and hold harmless Escrow Agent, and Indemnitees, as among
themselves, Buyer, on the one hand, and Sellers’ Representative (on behalf of the Sellers), on the
other hand, intend to share equally (i.e., one-half (1/2) each) all amounts required to be paid
pursuant to this Section 9. The Parties hereto acknowledge that the foregoing indemnities shall
survive the resignation, replacement or removal of the Escrow Agent or the termination of this
Agreement. The Parties hereby grant the Escrow Agent a lien on, right of set-off against and
security interest in, the Funds for the payment of any claim for indemnification, expenses and
amounts due hereunder. In furtherance of the foregoing, the Escrow Agent is expressly authorized
and directed, but shall not be obligated, to charge against and withdraw from the Funds for its own
account or for the account of an Indemnitee any amounts due to the Escrow Agent or to an Indemnitee
under this Section 9. The obligations contained in this Section 9 shall survive the termination of
this Agreement and the resignation, replacement or removal of the Escrow Agent.

     10. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting.

          (a) Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires the
Escrow Agent to implement reasonable procedures to verify the identity of any person that opens a
new account with it. Accordingly, the Parties acknowledge that Section 326 of the USA PATRIOT Act
and the Escrow Agent’s identity verification procedures require the Escrow Agent to obtain
information which may be used to confirm the Parties identity including without limitation name,
address and organizational documents (“identifying information”). The Parties agree to provide the
Escrow Agent with and consent to the Escrow Agent obtaining from third parties any such identifying
information required as a condition of opening an account with or using any service provided by the
Escrow Agent.

          (b) The Parties have provided the Escrow Agent with their respective fully executed Internal
Revenue Service (“IRS”) Form W-8, or W-9 and/or other required documentation. The Parties
each represent that its correct TIN assigned by the IRS, or any other
taxing authority, is set forth in the delivered forms, as well as in the Substitute IRS Form W-9 set forth on the signature
page of this Agreement.

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          (c) The Parties represent to the Escrow Agent that the transaction memorialized in the Stock
Purchase Agreement does not constitute an installment sale requiring any tax reporting or
withholding of imputed interest or original issue discount to the IRS or other taxing authority.
To the extent that any portion of the principal amount of the Deposits represent part or all of the
purchase price for shares of stock under the Stock Purchase Agreement, Sellers shall provide all
information required for Escrow Agent to perform tax reporting on IRS Form 1099-B on or prior to
each distribution. Unless otherwise directed in a joint written instruction executed by the
Parties, Escrow Agent shall report to the IRS and as appropriate withhold and remit taxes to the
IRS, or any other taxing authority as required by law, based upon the information and documentation
so provided and when schedule and documentation is not properly and timely provided prior to
payment of principal to the Sellers. Escrow Agent shall be entitled to rely on such information
and documentation and shall not be responsible for and shall be indemnified by Sellers for any
additional tax, interest or penalty arising from the inaccuracy or late receipt of such information
or documentation.

          (d) All interest or other income earned under this Agreement shall be allocated to the
Sellers’ Representative and reported, as and to the extent required by law, by the Escrow Agent to
the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as
income earned from the Escrow by the Sellers’ Representative (on behalf of the Sellers) whether or
not said income has been distributed during such year. Any other tax returns required to be filed
will be prepared and filed by the Sellers’ Representative with the IRS and any other taxing
authority as required by law, including but not limited to any applicable reporting or withholding
pursuant to the Foreign Investment in Real Property Tax Act (“FIRPTA”). Sellers’
Representative and Buyer acknowledge and agree that Escrow Agent shall have no responsibility for
the preparation and/or filing of any tax return or any applicable FIRPTA reporting or withholding
with respect to the Escrow Deposit or any income earned by the Escrow Deposit. Sellers’
Representative and Buyer further acknowledge and agree that any taxes payable from the income
earned on the investment of any sums held in the Escrow Deposit shall be paid by Sellers’
Representative (on behalf of the Sellers). In the absence of written direction from the Sellers’
Representative and Buyer, all proceeds of the Funds shall be retained in the Funds and reinvested
from time to time by the Escrow Agent as provided in this Agreement. Escrow Agent shall withhold
any taxes it deems appropriate, including but not limited to required withholding in the absence of
proper tax documentation, and shall remit such taxes to the appropriate authorities.

     11. Notices. Except for the transmittal of signature pages to this Agreement as provided in
Section 14, all communications hereunder shall be in writing and shall be deemed to be duly given
and received (a) upon delivery, if delivered personally, or upon confirmed transmittal, if by
facsimile and if received by 5:00 p.m. New York time; (b) on the next Business Day if prepaid and
sent by nationally recognized overnight courier; or (c) four (4) Business Days
after mailing if mailed by prepaid certified mail, return receipt requested, to the
appropriate notice address set forth below or at such other address as any party hereto may have
furnished to the other parties in writing by registered mail, return receipt requested.

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	If to Buyer:

	 	c/o MarketAxess Holdings Inc.
	 

	 	140 Broadway
	 

	 	New York, New York 10005
	 

	 	Attention: Chuck Hood, General Counsel
	 

	 	Facsimile: 212.813.6384
	 
	 	 
	With a copy to:

	 	Proskauer Rose, LLP
	 

	 	1585 Broadway
	 

	 	New York, NY 10036
	 

	 	Attention: Adam J. Kansler, Esq.
	 

	 	Facsimile: 212.969.2900
	 
	 	 
	If to Seller’s Representative:

	 	c/o TradeHelm, Inc.
	 

	 	5727 South Lewis Ave.
	 

	 	Tulsa, OK 74105
	 

	 	Attention: Braden Janowski
	 

	 	Facsimile: 918.392.5668
	 
	 	 
	With a copy to:

	 	Reed Smith LLP
	 

	 	10 South Wacker Drive, Suite 4000
	 

	 	Chicago, Illinois 60606-7507
	 

	 	Attention: J. Todd Arkebauer, Esq.
	 

	 	Facsimile: 312.207.6400
	 
	 	 
	If to the Escrow Agent:

	 	JPMorgan Chase Bank, N.A.
	 

	 	Escrow Administration
	 

	 	4 New York Plaza, 21st Floor
	 

	 	New York, NY 10004-2453
	 

	 	Attention: James M. Foley
	 

	 	Facsimile: 212.623.6168

     Notwithstanding the above, in the case of communications delivered to the Escrow Agent
pursuant to (a), (b) and (c) of this Section 11, such communications shall be deemed to have been
given on the date received by an officer of the Escrow Agent or any employee of the Escrow Agent
who reports directly to any such officer at the above-referenced office. In the event that the
Escrow Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent
may use such other means of communication as the Escrow Agent deems appropriate. “Business Day”
shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located
at the notice address set forth above is authorized or required by law or executive order to remain
closed.

     12. Security Procedures. In the event funds transfer instructions are given (other than in
writing at the time of execution of this Agreement), whether in
writing, by facsimile or otherwise,
the Escrow Agent is authorized to seek confirmation of such
instructions by

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telephone call-back to
the person or persons designated on Schedule 1 hereto (“Schedule 1”), and the
Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so
designated. Each funds transfer instruction shall be executed by an authorized signatory, a list
of such authorized signatories is set forth on Schedule 1. The persons and telephone
numbers for call-backs may be changed only in a writing actually received and acknowledged by the
Escrow Agent. If the Escrow Agent is unable to contact any of the authorized representatives
identified in Schedule 1, the Escrow Agent is hereby authorized to seek confirmation of
such instructions by telephone call-back to any one or more of Buyer’s executive officers
(“Executive Officers”), as the case may be, which shall include the titles of President,
Chief Financial Officer and/or General Counsel, as the Escrow Agent may select. Such “Executive
Officer” shall deliver to the Escrow Agent a fully executed incumbency certificate, and the Escrow
Agent may rely upon the confirmation of anyone purporting to be any such officer. The Escrow Agent
and the beneficiary’s bank in any funds transfer may rely solely upon any account numbers or
similar identifying numbers provided by Buyer or Sellers’ Representative to identify (a) the
beneficiary, (b) the beneficiary’s bank, or (c) an intermediary bank. The Escrow Agent may apply
any of the escrowed funds for any payment order it executes using any such identifying number, even
when its use may result in a person other than the beneficiary being paid, or the transfer of funds
to a bank other than the beneficiary’s bank or an intermediary bank designated. The Parties
acknowledge that these security procedures are commercially reasonable.

     13. Compliance with Court Orders. In the event that any escrow property shall be attached,
garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by
an order of a court, or any order, judgment or decree shall be made or entered by any court order
affecting the property deposited under this Agreement, the Escrow Agent is hereby expressly
authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered
or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether
with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any
such writ, order or decree it shall not be liable to any of the parties hereto or to any other
person, entity, firm or corporation, by reason of such compliance notwithstanding such writ, order
or decree be subsequently reversed, modified, annulled, set aside or vacated.

     14. Miscellaneous. The provisions of this Agreement may be waived, altered, amended or
supplemented, in whole or in part, only by a writing signed by the Escrow Agent and the Parties.
Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by
the Escrow Agent or any Party, except as provided in Section 7, without the prior consent of the
Escrow Agent and the Parties. This Agreement shall be governed by and construed under the laws of
the State of New York. Each Party irrevocably waives any objection on the grounds of venue, forum
non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in
any other manner permitted by applicable law and consents to the jurisdiction of the courts located
in the State of New York. The Parties further hereby waive any right to a trial by jury with
respect to any lawsuit or judicial proceeding arising or relating to this Agreement. No party to
this Agreement is liable to any other party for losses due to, or if it
is unable to perform its obligations under the terms of this Agreement because of, acts of
God, fire, war, terrorism, floods, strikes, electrical outages, equipment or transmission failure,
or other causes reasonably beyond its control. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute

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one and the same instrument. All signature pages of the parties to this Agreement may be
transmitted by facsimile or portable document format (“PDF”) through electronic mail, and
such facsimile or PDF will, for all purposes, be deemed to be the original signature of such party
whose signature it reproduces, and will be binding upon such party. If any provision of this
Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a
jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in such jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. A person who is not a party to this
Agreement shall have no right to enforce any term of this Agreement. The parties represent, warrant
and covenant that each document, notice, instruction or request provided by such Party to Escrow
Agent shall comply with applicable laws and regulations. Where, however, the conflicting
provisions of any such applicable law may be waived, they are hereby irrevocably waived by the
parties hereto to the fullest extent permitted by law, to the end that this Agreement shall be
enforced as written. Except as expressly provided in Section 9 above, nothing in this Agreement,
whether express or implied, shall be construed to give to any person or entity other than the
Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in
respect of this Agreement or any funds escrowed hereunder.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set
forth above.

	 	 	 	 	 
	MARKETAXESS TECHNOLOGIES INC.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Richard M. McVey	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Name:
	 	Richard M. McVey	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	Chief Executive Officer	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	SELLERS’ REPRESENTATIVE	 	 
	/s/ Braden Janowski
	 	 
	 	 	 
	Braden Janowski, in his capacity	 	 
	as Sellers’ Representative	 	 
	 
	 	 	 	 
	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION	 	 
	as Escrow Agent	 	 
	 
	 	 	 	 
	By:
	 	/s/ James M. Foley	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name:
	 	James M. Foley	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:
	 	Assistant Vice PresidentEX-10.18

 

Exhibit 10.18

EMPLOYMENT AGREEMENT

          AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) dated as of January 1, 2008
between Validus Holdings, Ltd., a Bermuda corporation (the “Company”), and Michael J.
Belfatti (the “Executive”).

          WHEREAS, the Company and the Executive each desire that the Executive become employed by the
Company on the terms and conditions set forth herein.

          NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

          SECTION 1.01 Definitions. For purposes of this Agreement, the following terms have
the meanings set forth below:

          “Base Salary” has the meaning set forth in Section 4.01.

          “Cause” means (a) theft or embezzlement by the Executive with respect to the Company
or its Subsidiaries; (b) malfeasance or gross negligence in the performance of the Executive’s
duties; (c) the commission by the Executive of any felony or any crime involving moral turpitude;
(d) willful and prolonged absence from work by the Executive (other than by reason of disability
due to physical or mental illness or at the direction of the Company or its Subsidiaries) or
failure, neglect or refusal by the Executive to perform his duties and responsibilities without the
same being corrected within ten (10) days after being given written notice thereof; (e) failure by
the Executive to adequately perform his duties and responsibilities hereunder without the same
being corrected within thirty (30) days after being given written notice thereof, as determined by
the Company in good faith; (f) continued and habitual use of alcohol by the Executive to an extent
which materially impairs the Executive’s performance of his duties without the same being corrected
within ten (10) days after being given written notice thereof; (g) the Executive’s use of illegal
drugs without the same being corrected within ten (10) days after being given written notice
thereof; (h) the Executive’s failure to use his best efforts to obtain, maintain or renew the work
permit described in Section 3.02 below in a timely manner, without the same being corrected within
ten (10) days after being given written notice thereof; or (i) the material breach by the Executive
of any of the covenants contained in this Agreement without, in the case of any breach capable of
being corrected, the same being corrected within ten (10) days after being given written notice
thereof.

          “Confidential Information” means information that is not generally known to the public
and that was or is used, developed or obtained by the Company or its Subsidiaries in connection
with their business. It shall not include information (a) required to be disclosed by court

 

 

or administrative order, (b) lawfully obtainable from other sources or which is in the public
domain through no fault of the Executive; or (c) the disclosure of which is consented to in writing
by the Company.

          “Date of Termination” has the meaning set forth in Section 5.01.

          “Employment Period” has the meaning set forth in Section 2.01.

          “Good Reason” means, without the Executive’s written consent, (a) a material breach of
this Agreement by the Company without the same being corrected within thirty (30) days after being
given written notice thereof; (b) a material reduction, in the aggregate, in the Executive’s Base
Salary and his benefits set forth in Section 4.03 (b) below, without the same being corrected
within thirty (30) days after being given written notice thereof; or (c) a material and adverse
change by the Company in the Executive’s duties and responsibilities set forth in Section 3.01
hereof, other than due to the Executive’s failure to adequately perform such duties and
responsibilities as determined by the Board in good faith, without the same being corrected within
thirty (30) days after being given written notice thereof; provided, however, that,
notwithstanding any provision of this Agreement to the contrary, the Executive must give written
notice of his intention to terminate his employment for Good Reason within sixty (60) days after
the act or omission which constitutes Good Reason, and any failure to give such written notice
within such period will result in a waiver by the Executive of his right to terminate for Good
Reason as a result of such act or omission.

          “Intellectual Property” has the meaning set forth in Section 7.01.

          “Noncompetition Period” has the meaning set forth in Section 9.01.

          “Notice of Termination” has the meaning set forth in Section 5.04.

          “Permanent Disability” means those circumstances where the Executive is unable to
continue to perform the usual customary duties of his assigned job or as otherwise assigned in
accordance with the provisions of this Agreement for a period of six (6) months in any twelve (12)
month period because of physical, mental or emotional incapacity resulting from injury, sickness or
disease. Any questions as to the existence of a Permanent Disability shall be determined by a
qualified, independent physician selected by the Company and approved by the Executive (which
approval shall not be unreasonably withheld). The determination of any such physician shall be
final and conclusive for all purposes of this Agreement.

          “Reimbursable Expenses” has the meaning set forth in Section 4.04.

          “Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, an estate, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency or political
subdivision thereof.

          “Subsidiary” or “Subsidiaries” means, with respect to any Person, any
corporation, partnership, limited liability company, association or other business entity of which
(a) if a corporation, twenty (20) percent or more of the total voting power of shares of stock
entitled

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(without regard to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or combination thereof; or (b) if a
partnership, limited liability company, association or other business entity, twenty (20) percent
or more of the partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes of this definition, a Person or Persons will be deemed to have a
twenty (20) percent or more ownership interest in a partnership, limited liability company,
association or other business entity if such Person or Persons are allocated twenty (20) percent or
more of partnership, limited liability company, association or other business entity gains or
losses or control the managing director or member or general partner of such partnership, limited
liability company, association or other business entity.

ARTICLE 2

EMPLOYMENT

          SECTION 2.01 Employment Period. The Company shall employ the Executive, and the
Executive shall accept employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning January 1, 2008 (the “Start Date”) and ending on the
Date of Termination as defined in Section 5.01 below (the “Employment Period”).

ARTICLE 3

POSITION AND DUTIES

          SECTION 3.01 Position and Duties. The Executive shall serve as Executive Vice
President and Chief Actuary of the Company, and in such capacity he shall oversee the development
and adequacy of the reserves of, and assist in the development of pricing models for, the
Subsidiaries of the Company. The Executive will be involved in establishing general pricing
parameters and capital allocation for the Company. The Executive hereby agrees to follow in good
faith the applicable operating guidelines of the Company, as in effect from time to time, including
any supplemental guidelines relating to Executive’s position. The Executive will report directly
to the Chief Financial Officer of the Company. During the Employment Period the Executive shall
devote substantially all of his working time and efforts to the business and affairs of the
Company. The Executive shall not directly or indirectly render any services of a business,
commercial or professional nature to any other person or for-profit organization not related to the
business of the Company or its Subsidiaries, whether for compensation or otherwise, without prior
written consent of the Company.

          SECTION 3.02 Work Permits. The Executive shall use his best efforts to assist the
Company in obtaining, maintaining and renewing a suitable (for the purposes of the Executive’s
contemplated employment by the Company) work permit by the Bermuda government authorities and any
other permits required by any Bermuda government authority. The Company shall be responsible for
permit fees.

          SECTION 3.03 Work Location. While employed by the Company hereunder, the Executive’s
primary place of business will be at the offices of the Company in Bermuda, and

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he will be required to perform a portion of his duties in London. The Executive shall travel
on the business of the Company in such manner and on such occasions as the Company may from time to
time reasonably require.

ARTICLE 4

BASE SALARY AND BENEFITS

          SECTION 4.01 Base Salary. During the Employment Period, the Executive’s base salary
will be $400,000 per annum (the “Base Salary”). The Base Salary will be payable monthly on
the last working day of each month in arrears in twelve (12) equal installments. Annually during
the Employment Period, the Company shall review with the Executive his job performance and
compensation, and if deemed appropriate by the Company, in its discretion, the Executive’s Base
Salary may be increased. Normal hours of employment are 8:30 a.m. to 5:00 p.m., Monday to Friday.
The Executive’s salary has been computed to reflect that his regular duties are likely, from time
to time, to require more than forty (40) hours per week and the Executive shall not be entitled to
receive any additional remuneration for any such additional hours.

          SECTION 4.02 Bonuses. In addition to the Base Salary, the Executive shall be eligible
to participate in an annual bonus plan on terms set forth from time to time by the Company;
provided, however, that the Executive’s target annual bonus will be 115% of his Base
Salary; provided further, however, that, (i) the Executive shall be paid a $225,000 minimum
annual bonus on or before March 15, 2008, and (ii) so long as Executive is employed on December 31,
2008, the Executive’s minimum annual bonus for calendar year 2008 shall be 50% of his target annual
bonus for such year, and such minimum annual bonus shall be paid to the Executive on or before
March 15, 2009. The Company may, at any time and from time to time acting in its sole discretion,
pay to the Executive an additional bonus.

          SECTION 4.03 Benefits. In addition to the Base Salary, and any bonuses payable to the
Executive pursuant to this Agreement, the Executive shall be entitled to the following benefits
during the Employment Period:

     (a) such major medical, life insurance and disability insurance coverage as is, or may
during the Employment Period, be provided generally for the senior executive officers of the
Company as set forth from time to time in the applicable plan documents;

     (b) in addition to the public holidays referenced in the Public Holidays Act of 1947
and fifteen (15) paid days off for sick leave, a maximum of four (4) weeks of paid vacation
annually during the term of the Employment Period;

     (c) benefits under any plan or arrangement available generally for the senior executive
officers of the Company, subject to and consistent with the terms and conditions and overall
administration of such plans as set forth from time to time in the applicable plan
documents; and

     (d) the Company will reimburse the Executive for any net additional United Kingdom
income tax imposed with respect to compensation paid to the Executive by the Company, which
income tax is owed by him to the United Kingdom as a result of his

-4-

 

working in the United Kingdom pursuant to this Agreement, but only to the extent, if
any, that payment of such United Kingdom income tax results in a higher net overall income
tax liability to the Executive after taking into account tax credits, deductions or income
exclusions available in the United States for such United Kingdom income tax or United
Kingdom source income, such reimbursement to be made promptly following receipt by the
Company of notification of payment by Executive, but in any event not later than the end of
the calendar year next following the calendar year in which the Executive remits the related
United Kingdom income taxes.

Upon termination of the Employment Period, to the extent permitted under terms of the applicable
plan, the Executive may elect continuation of the benefits described in subclause (a) above through
the plans provided by the Company at the Executive’s own expense until such time as the Executive
commences participation in another employer’s comparable group plans. The Executive agrees to
immediately notify the Company at the time he commences participation in another such plan.

          SECTION 4.04 Expenses. The Company shall reimburse the Executive for all reasonable
expenses incurred by him in the course of performing his duties under this Agreement which are
consistent with the Company’s policies in effect from time to time with respect to travel,
entertainment and other business expenses (“Reimbursable Expenses”), subject to the
Company’s requirements with respect to reporting and documentation of expenses.

          SECTION 4.05 Restricted Shares. The Company shall grant to the Executive 15,000
restricted shares of the Company’s common stock on January 1, 2008 (the “2008 Restricted
Shares”). Except as otherwise provided below, the 2008 Restricted Shares will vest, provided
that the Executive’s employment continues through the applicable vesting dates, in five equal
annual installments, beginning on December 31, 2008 and continuing on December 31 of each of the
following four years, with the final installment vesting on December 31, 2012. The Company shall
also grant to the Executive 15,000 restricted shares of the Company’s common stock on January 1,
2009 (the “2009 Restricted Shares”). Except as otherwise provided below, the 2009
Restricted Shares will vest, provided that the Executive’s employment continues through the
applicable vesting dates, in five equal annual installments, beginning on December 31, 2009 and
continuing on December 31 of each of the following four years, with the final installment vesting
on December 31, 2013. The 2008 Restricted Shares and 2009 Restricted Shares shall also be subject
to the terms and conditions set forth in the Company’s 2005 Long Term Incentive Plan and the
applicable award agreements.

          SECTION 4.06 Sign-up Bonus. The Company shall pay to the Executive $225,000 as a one
time sign-up bonus within thirty (30) days following the Start Date. If the Employment Period is
terminated within twelve (12) months after the Start Date (i) as a result of the Executive’s
resignation or leaving of his employment, other than for Good Reason, or (ii) by the Company for
Cause, then in either such case the Executive shall repay the sign-up bonus to the Company no later
than ten (10) business days after such termination of employment.

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ARTICLE 5

TERM AND TERMINATION

          SECTION 5.01 Date of Termination. The Employment Period shall end on the Date of
Termination. For purposes of this Agreement, the “Date of Termination” shall mean the
first to occur of the following: (a) the six (6) month anniversary of the Company providing Notice
of Termination (as defined below) without Cause to the Executive; (b) immediately upon the Company
providing Notice of Termination for Cause to the Executive; (c) the six (6) month anniversary of
the Executive providing Notice of Termination specifying his resignation for Good Reason to the
Company; (d) the six (6) month anniversary of the Executive providing Notice of Termination by
Executive without Good Reason to the Company; and (e) the fifth (5th) day following the Company
providing Notice of Termination to the Executive as a result of the Executive’s Permanent
Disability; or (f) the date of Executive’s death. In the event that there are circumstances which
would give rise to a termination by the Company for Cause, the Company may, in its sole and
exclusive discretion, treat such termination as a termination without Cause.

          SECTION 5.02 Resignation by the Executive Without Good Reason. If the Employment
Period shall be terminated as a result of the Executive’s resignation or leaving of his employment,
other than for Good Reason, Executive shall continue to: (a) receive Base Salary and benefits set
forth in Section 4.03 through the Date of Termination, except that any amount payable after the
Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A 1(h)) with
the Company will be subject to Section 12.14 below; and (b) receive reimbursement of all
Reimbursable Expenses incurred by the Executive prior to the Date of Termination. Notwithstanding
any provision of this Agreement or any applicable plan or other agreement to the contrary, no
shares of restricted stock of the Company or stock options of the Company granted to the Executive
shall vest on or following the date the Executive provides Notice of Termination without Good
Reason to the Company. The Executive’s entitlements under all other benefit plans and programs of
the Company shall be as determined thereunder.

          SECTION 5.03 Termination for Other Reasons. If the Employment Period shall be
terminated by the Executive for Good Reason, by the Company with or without Cause, as a result of
the Executive’s Permanent Disability or upon the Executive’s death, the Executive (or his estate,
in the case of death) shall continue to: (a) receive Base Salary and benefits set forth in Section
4.03 above (i) in the case of termination by the Executive for Good Reason or by the Company with
or without Cause, through the Date of Termination, except that any amount payable after the
Executive’s separation from service with the Company will be subject to Section 12.14 below, and
(ii) in the case of termination due to the Executive’s Permanent Disability or death, through the
six (6) month anniversary of the Date of Termination, except that any amount payable after the
Executive’s separation from service with the Company will be subject to Section 12.14 below; (b)
vest in any shares of restricted stock of the Company and any Company stock options granted to the
Executive through the Date of Termination; and (c) receive reimbursement for all Reimbursable
Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements
under all other benefit plans and programs of the Company shall be as determined thereunder.

          SECTION 5.04 Notice of Termination. Any termination by the Company for Permanent
Disability or Cause or without Cause or by the Executive for Good Reason or without

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Good Reason shall be communicated by written Notice of Termination to the other party hereto.
For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and, with respect to
termination by the Company for Permanent Disability or Cause or resignation by the Executive for
Good Reason, shall set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of employment under the provision indicated.

          SECTION 5.05 Garden Leave. Following the provision of a Notice of Termination either
by the Company or by the Executive, the Company may direct, in its sole and exclusive discretion,
that the Executive perform no duties, exercise no powers and resign from any office held in
connection with his employment with the Company or its Subsidiaries; provided, however,
that, following any such direction, the Executive will continue to be required to comply with his
other obligations under this Agreement (and will continue to have a duty of loyalty to the Company
as an employee) through the end of the Employment Period.

ARTICLE 6

CONFIDENTIAL INFORMATION

          SECTION 6.01 Nondisclosure and Nonuse of Confidential Information. The Executive will
not disclose or use at any time during or after the Employment Period any Confidential Information
of which the Executive is or becomes aware, whether or not such information is developed by him,
except to the extent that such disclosure or use is directly related to and required by the
Executive’s performance of duties assigned to the Executive pursuant to this Agreement. Under all
circumstances and at all times, the Executive will take all appropriate steps to safeguard
Confidential Information in his possession and to protect it against disclosure, misuse, espionage,
loss and theft.

ARTICLE 7

INTELLECTUAL PROPERTY

          SECTION 7.01 Ownership of Intellectual Property. In the event that the Executive as
part of his activities on behalf of the Company generates, authors or contributes to any invention,
design, new development, device, product, method of process (whether or not patentable or reduced
to practice or comprising Confidential Information), any copyrightable work (whether or not
comprising Confidential Information) or any other form of Confidential Information relating
directly or indirectly to the business of the Company as now or hereinafter conducted
(collectively, “Intellectual Property”), the Executive acknowledges that such Intellectual
Property is the sole and exclusive property of the Company and hereby assigns all right, title and
interest in and to such Intellectual Property to the Company. Any copyrightable work prepared in
whole or in part by the Executive during the Employment Period will be deemed “a work made for
hire” under Section 201(b) of the Copyright Act of 1976, as amended, and the Company will own all
of the rights comprised in the copyright therein. The Executive will promptly and fully disclose
all Intellectual Property and will cooperate with the Company to protect the Company’s interests in
and rights to such Intellectual Property (including providing reasonable assistance in securing
patent protection and copyright registrations and executing all documents

-7-

 

as reasonably requested by the Company, whether such requests occur prior to or after
termination of Executive’s employment hereunder).

ARTICLE 8

DELIVERY OF MATERIALS UPON TERMINATION OF EMPLOYMENT

          SECTION 8.01 Delivery of Materials upon Termination of Employment. As requested by
the Company, from time to time and upon the termination of the Executive’s employment with the
Company for any reason, the Executive will promptly deliver to the Company all property of the
Company or its Subsidiaries, including, without limitation, all copies and embodiments, in whatever
form or medium, of all Confidential Information or Intellectual Property in the Executive’s
possession or within his control (including written records, notes, photographs, manuals,
notebooks, documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes
and all other materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such material and, if requested by the Company, will
provide the Company with written confirmation that, to the best of his knowledge, all such
materials have been delivered to the Company.

ARTICLE 9

NONCOMPETITION AND NONSOLICITATION

          SECTION 9.01 Noncompetition. The Executive acknowledges that during his employment
with the Company, he will become familiar with trade secrets and other Confidential Information
concerning the Company or its Subsidiaries, and that his services will be of special, unique and
extraordinary value to the Company. In addition, the Executive hereby agrees that at any time
during the Employment Period, and for a period ending six (6) months after the Date of Termination
(the “Noncompetition Period”), he will not directly or indirectly own, manage, control,
participate in, consult with, render services for or in any manner engage in any business competing
with the businesses of the Company or its Subsidiaries as such businesses exist or are in process
or being planned as of the Date of Termination, within any geographical area in which the Company
or its Subsidiaries engage or plan to engage in such businesses; provided, however, that
the portion of the Noncompetition Period following the Date of Termination shall be reduced by the
period of time, if any, between the date Notice of Termination is given and the Date of
Termination. It shall not be considered a violation of this Section 9.01 for the Executive to be a
passive owner of not more than 2% of the outstanding stock of any class of a corporation which is
publicly traded, so long as the Executive has no active participation in the business of such
corporation.

          SECTION 9.02 Nonsolicitation of Employees. The Executive hereby agrees that (a)
during the Employment Period and for a period of one (1) year after the Date of Termination (the
“Nonsolicitation Period”) the Executive will not, directly or indirectly, induce or attempt
to induce any employee of the Company or its Subsidiaries to leave the employ of the Company or its
Subsidiaries, or in any way interfere with the relationship between the Company or its Subsidiaries
and any employee thereof or otherwise employ or receive the services of any individual who was an
employee of the Company or its Subsidiaries at any time during such Nonsolicitation Period or
within the six-month period prior thereto.

-8-

 

          SECTION 9.03 Nonsolicitation of Customers. During the Nonsolicitation Period, the
Executive will not induce or attempt to induce any customer, supplier, client, insured, reinsured,
reinsurer, broker, licensee or other business relation of the Company or its Subsidiaries to cease
doing business with the Company or its Subsidiaries.

          SECTION 9.04 Enforcement. If, at the enforcement of Sections 9.01, 9.02 or 9.03, a
court holds that the duration, scope or area restrictions stated herein are unreasonable under
circumstances then existing, the parties agree that the maximum duration, scope or area reasonable
under such circumstances will be substituted for the stated duration, scope or area and that the
court will be permitted to revise the restrictions contained in this Section 9 to cover the maximum
duration, scope or area permitted by law.

ARTICLE 10

EQUITABLE RELIEF

          SECTION 10.01 Equitable Relief. The Executive acknowledges that (a) the covenants
contained herein are reasonable, (b) the Executive’s services are unique, and (c) a breach or
threatened breach by him of any of his covenants and agreements with the Company contained in
Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 9.03 could cause irreparable harm to the Company for which
they would have no adequate remedy at law. Accordingly, and in addition to any remedies which the
Company may have at law, in the event of an actual or threatened breach by the Executive of his
covenants and agreements contained in Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 9.03, the Company
shall have the absolute right to apply to any court of competent jurisdiction for such injunctive
or other equitable relief as such court may deem necessary or appropriate in the circumstances.

ARTICLE 11

EXECUTIVE REPRESENTATIONS AND INDEMNIFICATION

          SECTION 11.01 Executive Representations. The Executive hereby represents and warrants
to the Company that (a) the execution, delivery and performance of this Agreement by the Executive
does not and will not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which the Executive is a party or by which he
is bound, (b) except for agreements provided to the Company by the Executive, the Executive is not
a party to or bound by any employment agreement, noncompetition agreement or confidentiality
agreement with any other Person, and (c) upon the execution and delivery of this Agreement by the
Company, this Agreement will be the valid and binding obligation of the Executive, enforceable in
accordance with its terms. Notwithstanding Section 11.02 below, in the event that any action is
brought against Executive involving any breach of any employment agreement, noncompetition
agreement or confidentiality agreement with any other Person, the Executive shall bear his own
costs incurred in defending such action, including but not limited to, court fees, arbitration
costs, mediation costs, attorneys’ fees and disbursements.

          SECTION 11.02 General Indemnification. The Company agrees that if the Executive is
made a party, or is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (each, a “Proceeding”), by reason of the

-9-

 

fact that he is or was a director, officer or employee of the Company or is or was serving at
the request of the Company as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including service with respect
to employee benefit plans, whether or not the basis of such Proceeding is the Executive’s alleged
action in an official capacity while serving as a director, officer, member, employee or agent, the
Executive shall be indemnified and held harmless by the Company to the fullest extent permitted or
authorized by applicable law and its organizational documents, against all cost, expense, liability
and loss reasonably incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if he has ceased to be a director, member,
employee or agent of the Company or other entity and shall inure to the benefit of the Executive’s
heirs, executors and administrators. The Company agrees to maintain a directors’ and officers’
liability insurance policy covering the Executive to the extent the Company provides such coverage
for its other executive officers.

ARTICLE 12

MISCELLANEOUS

          SECTION 12.01 Rights and Remedies. The Company will be entitled to enforce its rights
and remedies under this Agreement specifically, without posting a bond or other security, to
recover damages by reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law. There are currently no disciplinary or grievance procedures in place,
there is no collective agreement in place, and there is no probationary period.

          SECTION 12.02 Consent to Amendments. The provisions of this Agreement may be amended
or waived only by a written agreement executed and delivered by the Company and the Executive. No
other course of dealing between the parties to this Agreement or any delay in exercising any rights
hereunder will operate as a waiver of any rights of any such parties.

          SECTION 12.03 Successors and Assigns. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or not, provided that
the Executive may not assign his rights or delegate his obligations under this Agreement without
the written consent of the Company, other than his rights to compensation and benefits hereunder,
which may be transferred by will subject to the limitations of this Agreement.

          SECTION 12.04 Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

          SECTION 12.05 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than one party, but all
of which counterparts taken together will constitute one and the same agreement.

-10-

 

          SECTION 12.06 Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

          SECTION 12.07 Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in writing (including by
e-mail as set forth below) and will be deemed to have been given when delivered personally to the
recipient, two (2) business days after the date when sent to the recipient by reputable express
courier service (charges prepaid) or four (4) business days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications will be sent to the Executive and to the Company at the
addresses set forth below. Notices, demands and other communications hereunder may also be
delivered or furnished by e-mail communication. Notices, demands and other communications sent to
an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as available, return e-mail
or other written acknowledgement), provided that if such e-mail notice, demand or other
communication is not sent during the normal business hours of the recipient, such notice, demand or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient.

	 	 	 	 	 
	 

	If to the Executive:
	 	 	To the last address (including e-mail address)
delivered to the Company by the Executive in the
manner set forth herein.
	 
	 	 	 	 
	 

	If to the Company:
	 	 	Validus Holdings, Ltd.

Clarendon House

2 Church Street

Hamilton HM11

Bermuda
	 
	 	 	 	 
	 

	 	 	 	e-mail: jerome.dill@validusre.bm
	 
	 	 	 	 
	 

	 	 	 	Attn: General Counsel

or to such other address (including e-mail address) or to the attention of such other person as the
recipient party has specified to the sending party in the manner set forth herein.

          SECTION 12.08 Withholding. The Company may withhold from any amounts payable under
this Agreement such federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

          SECTION 12.09 No Third Party Beneficiary. This Agreement will not confer any rights
or remedies (or any obligations) upon any person other than the Company, the Executive and their
respective heirs, executors, successors and assigns.

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          SECTION 12.10 Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the parties and supersedes any prior understandings,
agreements or representations by or among the parties, written or oral, that may have related in
any way to the subject matter hereof. This Agreement shall serve as a written statement of
employment for purposes of Section 6 of the Bermuda Employment Act 2000.

          SECTION 12.11 Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party. Any reference to any federal, state, local or
foreign statute or law will be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The use of the word “including” in this
Agreement means “including without limitation” and is intended by the parties to be by way of
example rather than limitation.

          SECTION 12.12 Survival. Sections 5.02, 5.03, 6.01, 7.01, 8.01 and Articles 9 and 12
will survive and continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.

          SECTION 12.13 GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW OF BERMUDA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS, AND THE PARTIES HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
SUPREME COURT OF BERMUDA. 

          SECTION 12.14 Section 409A. It is intended that this Agreement will comply with
Section 409A of the United States Internal Revenue Code of 1986, as amended (the “Code”)
and any regulations and guidelines issued thereunder, to the extent the Agreement is subject
thereto, and the Agreement shall be interpreted on a basis consistent with such intent.
Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed on the
date of his “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) to be
a “specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)), then with regard to
any payment that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code, the
portion, if any, of such payment so required to be delayed (after taking into account any
applicable provisions of Treas. Reg. Section 1.409A-1(b)(9)(iii) and 1.409A-1(b)(4)) shall not be
made prior to the earlier of (i) the expiration of the six (6)-month period measured from the date
of his “separation from service”, or (ii) the date of his death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments delayed pursuant to this Section shall be paid to the
Executive in a lump sum. The Company shall not have any obligation to indemnify or otherwise
protect the Executive from any obligation to pay any taxes pursuant to Section 409A of the Code.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the                      day of                           
, 2008, to be effective as of the date and year first above written.

	 	 	 	 	 	 	 
	 	 	VALIDUS HOLDINGS, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	By:	 	  

	 	 
	 

	 	 	 	Printed Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Michael J. Belfatti	 	 

-13-

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