Entry into a Material Definitive







Kelso and WP Windstar Voting and Support Agreements




On February 16, 2021, ARL sold (i) an aggregate of 230,400 Common Shares to Kelso Investment Associates X, L.P., KEP X, LLC, and KSN Fund X, L.P.
(collectively, the “Kelso Funds”), which are affiliates of Kelso, and (ii) 230,400 Common Shares to WP Windstar Investments Ltd (“WP Windstar”), which is an affiliate of Warburg Pincus, in each case, at a purchase price of $34.66 per Common Share,
which was the then current market price of the Common Shares (based on the closing sale price of the Common Shares on the Nasdaq Global Select Market on February 12, 2021) (such sales collectively, the “Arch Sales”).  In connection with the Arch
Sales, on Feb ruary 16, 2021, the Company entered into a waiver to the Arch Voting Agreement with ARL and GRL in order to permit the Arch Sales to the Kelso Funds and WP Windstar.  In addition and as a condition to the Company’s willingness to provide
such waiver and permit the Arch Sales, on February 16, 2021, the Company also entered into (i) a Voting and Support Agreement with the Kelso Funds (the “Kelso Voting Agreement”) and (ii) a Voting and Support Agreement with WP Windstar (the “WP
Windstar Voting Agreement” and together with the Kelso Voting Agreement, the “Kelso and WP Windstar Voting Agreements”), which are substantially similar to the Arch Voting Agreement and pursuant to which the Kelso Funds and WP Windstar agreed, among
other things, to vote any Common Shares or Preference Shares owned by them (i) in favor of the adoption of the Merger Agreement and (ii) against any proposal, other action, amendment or other change to the Company’s memorandum of association or
bye-laws or any other material change in the Company’s corporate structure or business that would reasonably be expected to impede or adversely affect in any material respect the merger or any of the other transactions contemplated by the Merger
Agreement, the statutory merger agreement required in accordance with Section 105 of the Bermuda Companies Act 1981, as amended, or the applicable Kelso and WP Windstar Voting Agreement. The Kelso Funds and WP Windstar also agreed to not tender,
transfer, grant any proxies or powers of attorney with respect to Common Shares they own or enter into any voting agreement inconsistent with the applicable Kelso and WP Windstar Voting Agreement.




The Kelso and WP Windstar Voting Agreements will automatically terminate upon the earliest to occur of (a) the closing of the Merger, (b) the date that the
Merger Agreement is terminated, (c) an adverse recommendation change and (d) the delivery of written notice of termination of the applicable Kelso and WP Windstar Voting Agreement by the Company to the Kelso Funds or WP Windstar, as applicable.
Certain provisions (such as those relating to expenses, amendment, waiver and governing law) will survive the termination of the Kelso and WP Windstar Voting Agreements.




The foregoing description of the Kelso and WP Windstar Voting Agreements does not purport to be complete and is subject to, and qualified in its entirety
by, the full text of the Kelso Voting Agreement filed as Exhibit 10.1 hereto and the WP Windstar Voting Agreement filed as Exhibit 10.2 hereto, each of which is incorporated herein by reference.












Item 9.01



Financial Statements and Exhibits.









(d)



Exhibits.










Exhibit


Number



 



Exhibit Description






10.1



 



Voting and Support Agreement, dated as of February 16, 2021, by and among Watford Holdings Ltd., Kelso Investment Associates X, L.P., KEP X, LLC, and
KSN Fund X, L.P.






10.2



 



Voting and Support Agreement, dated as of February 16, 2021, by and between Watford Holdings Ltd. and WP Windstar Investments Ltd.







Cautionary Note Regarding Forward-looking Statements




The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward−looking statements. This report or any other written or oral
statements made by or on behalf of Watford and its subsidiaries may include forward−looking statements, which reflect Watford’s current views with respect to future events and financial performance. All statements other than statements of historical
fact included in or incorporated by reference in this report are forward−looking statements.  Forward−looking statements can generally be identified by the use of forward−looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,”
“anticipate,” “believe” or “continue” or their negative or variations or similar terminology. Forward−looking statements involve Watford’s current assessment of risks and uncertainties. Actual events and results may differ materially from those
expressed or implied in these statements.  A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: one or more closing conditions to the
Merger, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the Merger, or that the
required approval of the Merger Agreement by the shareholders of Watford may not be obtained; the business of Watford may suffer as a result of uncertainty surrounding the Merger and there may be challenges with employee retention as a result of the
pending Merger; the Merger may involve unexpected costs, liabilities or delays; legal proceedings may be initiated related to the Merger; an event, change or other circumstance may occur that could give rise to the termination of the Merger Agreement
(including circumstances requiring a party to pay the other party a termination fee pursuant to the Merger Agreement); adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions
of rating agencies and Watford’s ability to maintain and improve its ratings; investment performance; the loss of key personnel; the adequacy of Watford’s loss reserves, severity and/or frequency of losses, greater than expected loss ratios and
adverse development on claim and/or claim expense liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events

,

including



pandemics such as COVID-19; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; Watford’s ability to successfully integrate, establish and maintain operating procedures as well as
integrate the businesses Watford has acquired or may acquire into its existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling
arrangements; availability and cost to Watford of reinsurance to manage Watford’s gross and net exposures; the failure of others to meet their obligations to Watford; changes in the method for determining the London Inter-bank Offered Rate (“LIBOR”)
and the potential replacement of LIBOR and other factors identified in Watford’s filings with the U.S. Securities and Exchange Commission (the “SEC”).




The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are
included herein or elsewhere. All subsequent written and oral forward−looking statements attributable to Watford or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Watford does not undertake any
obligation to publicly update or revise any forward−looking statement, whether as a result of new information, future events or otherwise.




Additional Information and Where to Find It




In connection with the proposed merger, on February 8, 2021, Watford filed with the SEC a revised preliminary proxy statement on Schedule 14A, and Watford
and certain other persons, including Arch, the Kelso Funds and WP Windstar, filed with the SEC an amendment to their previously filed Schedule 13E-3 transaction statement. Following the filing of the definitive proxy statement with the SEC, Watford
will mail the definitive proxy statement and a proxy card to each shareholder entitled to vote at the special meeting relating to the proposed merger. INVESTORS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND THE SCHEDULE 13E-3 IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain the definitive proxy statement, as well as other filings containing information about Watford, free of charge, from the SEC’s web site (www.sec.gov).
Investors may also obtain Watford’s SEC filings in connection with the transaction, free of charge, by directing a request to Watford Holdings Ltd., Waterloo House, 1st Floor, 100 Pitts Bay Road, Pembroke HM 08, Bermuda.










Participants in the Solicitation




Watford and its directors, executive officers and employees and certain other persons may be deemed to be participants in the solicitation of proxies in
respect of the transaction. Information regarding Watford’s directors and executive officers is available in its definitive proxy statement for its 2020 annual meeting of shareholders filed with the SEC on April 14, 2020. This document can be
obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the proxy solicitation will be included in the definitive proxy statement relating to the transaction when it becomes
available. This document does not constitute a solicitation of a proxy, an offer to purchase or a solicitation of an offer to sell any securities.








SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.




Dated: February 19, 2020






 


 



WATFORD HOLDINGS LTD.





 


 


 




 



By:




/s/ Jonathan D. Levy





 


 



Name:




Jonathan D. Levy





 


 



Title:




Chief Executive Officer














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