VOTING AGREEMENT
(this “ Agreement ”), dated as of August 4,
2008, between Tower Group, Inc., a Delaware corporation (“
Tower ”), and Michael H. Lee, a shareholder (the
“ Shareholder ”) of CastlePoint Holdings, Ltd.,
a Bermuda exempted company (“ CastlePoint ”).
Except as otherwise provided herein, capitalized terms that are
used but not otherwise defined herein shall have the meanings
assigned to such terms in the Agreement and Plan of Merger (as
defined below).
WHEREAS,
contemporaneously with the execution of this Agreement,
CastlePoint, Tower and Ocean I Corporation, a Delaware corporation
and an indirect wholly owned subsidiary of Tower, have entered into
an Agreement and Plan of Merger (the “ Agreement and Plan
of Merger ”), dated as of the date hereof, providing for,
among other things, the merger of CastlePoint and Merger Sub
contemplated by the Agreement and Plan of Merger (the “
Merger ”);
WHEREAS, in order
to induce Tower to enter into the Agreement and Plan of Merger, the
Shareholder wishes to enter into this Agreement;
NOW, THEREFORE,
for good and valuable consideration, the receipt, sufficiency and
adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
1.
Representations of the Shareholder
The Shareholder
represents and warrants to Tower that:
(a) the
Shareholder lawfully owns beneficially (as such term is defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”)) or of record:
(i) the common shares, par value $0.01 per share (the “
CastlePoint Common Stock ”), of CastlePoint set forth
opposite the Shareholder’s name on Exhibit A hereto (the
Shareholder’s “ CastlePoint Common Shares
”), and (ii) the options, warrants or other rights
exercisable for or convertible into CastlePoint Common Stock set
forth opposite the Shareholder’s name on Exhibit A
hereto (the Shareholder’s “ CastlePoint Options
” and, together with the Shareholder’s CastlePoint
Common Shares, the Shareholder’s “ CastlePoint
Shares ”), in each case free and clear of all
encumbrances and, except for this Agreement and the Agreement and
Plan of Merger, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character to which
the Shareholder is a party relating to the pledge, disposition or
Voting (as defined in Section 2 hereof) of any shares in the
share capital of CastlePoint and there are no Voting trusts or
Voting agreements with respect to such CastlePoint
Shares,
(b) the
Shareholder does not beneficially own (as such term is used in
Rule 13d-3 of the Exchange Act) any CastlePoint Common Stock
other than such CastlePoint Common Shares, and does not have any
options, warrants or other rights to
acquire any
additional shares in the share capital of CastlePoint or any
security exercisable for or convertible into shares in the share
capital of CastlePoint, other than such CastlePoint
Options,
(c) the
Shareholder has full power and authority and has taken all actions
necessary to enter into, execute and deliver this Agreement and to
perform fully the Shareholder’s obligations
hereunder,
(d) this
Agreement has been duly executed and delivered and constitutes the
legal, valid and binding obligation of the Shareholder enforceable
against the Shareholder in accordance with its terms,
(e) other
than filings under the Exchange Act, no notices, reports or other
filings are required to be made by the Shareholder with, nor are
any consents, registrations, approvals, permits or authorizations
required to be obtained by the Shareholder from, any Governmental
Entity, in connection with the execution and delivery of this
Agreement by the Shareholder, and
(f) the
execution, delivery and performance of this Agreement by the
Shareholder does not, and the consummation by the Shareholder of
the transactions contemplated hereby will not (whether after the
giving of notice or the passage of time or both), result in a
violation or breach of, or constitute a default or give rise to any
right of termination, cancellation, modification or acceleration
under any contract, agreement, arrangement or commitment to which
the Shareholder is a party or which is binding on him or his assets
and will not result in the creation of any encumbrance on, or
security interest in, any of the assets or properties of the
Shareholder.
2.
Agreement to Deliver Proxy
The Shareholder
agrees to deliver to Tower, or any nominee of Tower, promptly upon
Tower’s request an irrevocable proxy substantially in the
form attached hereto as Exhibit B (a “CastlePoint
Proxy”) to Vote the CastlePoint Shares:
(a) in favor
of ( i ) a proposal to amend CastlePoint’s Bye-laws to
permit the shareholders to approve an amalgamation by the
affirmative vote of a majority of the votes cast at any general
meeting of CastlePoint, and ( ii ) a proposal to amend
CastlePoint’s Bye-laws to permit a shareholder to irrevocably
appoint a proxy,
(b) in favor
of approval and adoption of the Agreement and Plan of Merger and
the transactions contemplated thereby, including the
Merger,
(c) in favor
of any other matter intended to facilitate the timely consummation
of the Merger,
-2-
(d) against
any action or agreement that would compete with, or materially
impede, or interfere with or that would reasonably be expected to
discourage the Merger or inhibit the timely consummation of the
Merger,
(e) against
any action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or any
other obligation of CastlePoint under the Agreement and Plan of
Merger, and
(f) except
for the Merger, against any merger, amalgamation, consolidation,
business combination, reorganization, recapitalization, liquidation
or sale or transfer of any material assets of CastlePoint or its
subsidiaries.
The CastlePoint
Proxy delivered by the Shareholder pursuant to this Section 2
shall be irrevocable during the term of this Agreement to the
maximum extent permitted under Bermuda law. For purposes of this
Agreement, “ Vote ” includes voting in person or
by proxy in favor of or against any action, otherwise consenting to
a resolution in writing or withholding such written consent in
respect of any action (including, but not limited to, consenting to
a resolution in writing in accordance with Section 77A of the
Bermuda Companies Act of 1981) or taking other action in favor of
or against any action. “ Voting ” shall have a
correlative meaning. The CastlePoint Proxy delivered by the
Shareholder pursuant to this Section 2 shall apply to any Vote
(i) at any meeting of the shareholders of CastlePoint, and any
adjournment or postponement thereof, at which the matters described
above are considered, including the Company Stockholders Meeting of
CastlePoint to be held as soon as practicable after the date hereof
or (ii) in connection with any unanimous written resolution of
shareholders of CastlePoint.
If Tower, or any
nominee of Tower, does not request a CastlePoint proxy from the
Shareholder as provided above in this Section 2, the
Shareholder shall Vote the CastlePoint shares in the manner set
forth in Section 2(a) – 2(f), inclusive.
The Shareholder
agrees that he will not, nor will he permit any entity under his
control to, deposit any of his CastlePoint Shares or New
CastlePoint Shares (as defined in Section 6 hereof) in a
Voting trust or subject any of his CastlePoint Shares or New
CastlePoint Shares to any arrangement with respect to the Voting of
such CastlePoint Shares or New CastlePoint Shares other than
agreements entered into with Tower.
4.
No Proxy Solicitations
The Shareholder
agrees that he will not, nor will he permit any entity under the
Shareholder’s Control (as defined in Rule 12b-2 under
the Exchange Act), to:
(a) solicit
proxies or become a “participant” in a
“solicitation” (as such t
|
