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EXHIBIT 1.1
____________ SHARES
ODYSSEY RE HOLDINGS CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED MAY [ ], 2001
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TABLE OF CONTENTS
PAGE
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SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY... 2
(a) Compliance with Registration Requirements........... 2
(b) Compliance with Canadian Prospectus Requirements.... 3
(c) U.S. Offering Materials Furnished to Underwriters... 3
(d) Canadian Offering Materials Furnished to
Underwriters........................................... 3
(e) Distribution of Offering Material By the Company.... 3
(f) The Underwriting Agreement.......................... 3
(g) Authorization of the Common Shares.................. 3
(h) No Applicable Registration or Other Similar
Rights................................................. 4
(i) No Material Adverse Change.......................... 4
(j) Independent Accountants............................. 4
(k) Preparation of the Financial Statements............. 4
(l) Incorporation and Good Standing of the Company and
its Subsidiaries....................................... 4
(m) Capitalization and Other Capital Stock Matters....... 5
(n) Stock Exchange Listing.............................. 5
(o) Non-Contravention of Existing Instruments; No
Further Authorizations or Approvals Required........ 5
(p) No Material Actions or Proceedings.................. 6
(q) Intellectual Property Rights........................ 6
(r) All Necessary Licenses.............................. 6
(s) Title to Properties................................. 6
(t) Tax Law Compliance.................................. 7
(u) Company Not an "Investment Company"................. 7
(w) No Price Stabilization or Manipulation............... 7
(x) Company's Accounting System......................... 7
(y) ERISA Compliance.................................... 7
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON
SHARES.................................................... 8
(a) The Firm Common Shares.............................. 8
(b) The First Closing Date.............................. 8
(c) The Optional Common Shares; the Second Closing
Date................................................... 8
(d) Public Offering of the Common Shares................ 8
(e) Payment for the Common Shares....................... 9
(f) Delivery of the Common Shares....................... 9
(g) Delivery of Prospectus to the Underwriters.......... 9
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY............. 9
(a) Representatives' Review of Proposed Amendments and
Supplements............................................ 9
(b) Securities Act Compliance........................... 9
(c) Compliance with Canadian Securities Requirements.... 10
(d) Amendments and Supplements to the Prospectus and
Other Securities Act Matters........................... 10
(e) Copies of any Amendments and Supplements to the
Prospectus............................................. 10
(f) Blue Sky Compliance................................. 10
(g) Use of Proceeds..................................... 10
(h) Transfer Agents..................................... 11
(i) Earnings Statement.................................. 11
(j) Periodic Reporting Obligations...................... 11
(k) Agreement Not To Offer or Sell Additional
Securities............................................. 11
(l) Future Reports to the Representatives............... 11
(m) Translation Opinions................................. 11
(n) Translation Opinions -- Financial Statements........ 12
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SECTION 4. PAYMENT OF EXPENSES............................. 12
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE
UNDERWRITERS.............................................. 12
(a) Accountants' Comfort Letter......................... 12
(b) Compliance with Registration Requirements; No Stop
Order; No Objection from NASD.......................... 13
(c) No Material Adverse Change or Ratings Agency
Change................................................. 13
(d) Opinion of Counsel for the Company.................. 13
(e) Opinion of General Counsel of the Company........... 14
(f) Opinion of Canadian Counsel for the Company......... 14
(g) Opinion of Counsel for the Underwriters............. 14
(h) Opinion of Canadian Counsel for the Underwriters.... 14
(i) Officers' Certificate............................... 14
(j) Bring-down Comfort Letter........................... 14
(k) Lock-Up Agreement from Certain Securityholders of
the Company............................................ 14
(l) Certain Events...................................... 15
(m) Additional Documents................................. 15
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES......... 15
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT................. 15
SECTION 8. INDEMNIFICATION................................. 15
(a) Indemnification of the Underwriters................. 15
(b) Indemnification of the Company, its Directors and
Officers............................................... 16
(c) Notifications and Other Indemnification
Procedures............................................. 17
(d) Settlements......................................... 17
SECTION 9. CONTRIBUTION................................... 18
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL
UNDERWRITERS.............................................. 19
SECTION 11. TERMINATION OF THIS AGREEMENT.................. 19
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE
DELIVERY.................................................. 19
SECTION 13. NOTICES........................................ 20
SECTION 14. SUCCESSORS; THIRD PARTY BENEFICIARY............ 20
SECTION 15. PARTIAL UNENFORCEABILITY....................... 21
SECTION 16. GOVERNING LAW PROVISIONS....................... 21
SECTION 17. GENERAL PROVISIONS............................. 21
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UNDERWRITING AGREEMENT
MAY [ ], 2001
BANC OF AMERICA SECURITIES LLC
CIBC WORLD MARKETS CORP.
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and
CIBC WORLD MARKETS CORP.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. Odyssey Re Holdings Corp., a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of [ ] shares (the "Firm
Common Shares") of its Common Stock (the "Common Stock"), par value
$[ ] per share (the "Offering"). In addition, the Company has granted
to the Underwriters an option to purchase up to an additional [ ]
shares (the "Optional Common Shares") of Common Stock, as provided in Section 2.
The Firm Common Shares and, if and to the extent such option is exercised, the
Optional Common Shares are collectively called the "Common Shares". Banc of
America Securities LLC ("BAS") and CIBC World Markets Corp. ("CIBC") have agreed
to act as representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-57642), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares in the United States. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A or Rule 434 under the Securities Act, is called the "Registration
Statement". Any registration statement filed by the Company pursuant to Rule
462(b) under the Securities Act is called the "Rule 462(b) Registration
Statement", and from and after the date and time of filing of the Rule 462(b)
Registration Statement the term "Registration Statement" shall include the Rule
462(b) Registration Statement. Such prospectus, in the form first used by the
Underwriters to confirm sales of the Common Shares, is called the "U.S.
Prospectus". All references in this Agreement to the Registration Statement, the
Rule 462(b) Registration Statement or the U.S. Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("▇▇▇▇▇").
The Company has also prepared and filed with the Ontario Securities
Commission (the "Reviewing Authority") and the securities regulatory authorities
(together with the Reviewing Authority, the "Qualifying Authorities") in each
other province of Canada (together with Ontario, the "Qualifying Provinces") a
preliminary long form prospectus and an amended preliminary long form prospectus
each relating to the Common Shares in the English and French languages
qualifying the distribution of the Common Shares in each of the Qualifying
Provinces. The Reviewing Authority has been assigned to the Company as the
designated jurisdiction regulating the offering of the Common Shares in Canada.
In addition, the Company (A) has prepared and filed with the Qualifying
Authorities a final long form prospectus relating to the Common Shares in the
English and French languages (together, the "Final PREP Prospectus") omitting
the PREP Information (as hereinafter defined) in accordance with the rules and
procedures established pursuant to National Instrument 44-103 of the Canadian
Securities Administrators entitled "Post Receipt Pricing" for the
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pricing of Common Shares after the final receipt for a prospectus has been
obtained (the "PREP Procedures"), and (B) will prepare and file, promptly after
the execution and delivery of this Agreement, with the Qualifying Authorities,
in accordance with the PREP Procedures, a supplemental prospectus setting forth
the PREP Information in the English and French languages (together, the
"Supplemental PREP Prospectus"). The information, if any, included in the
Supplemental PREP Prospectus that is omitted from the Final PREP Prospectus for
which a receipt has been obtained from the Reviewing Authority on behalf of the
Qualifying Authorities but which is deemed under the PREP Procedures to be
incorporated by reference into the Final PREP Prospectus as of the date of the
Supplemental PREP Prospectus is referred to herein as the "PREP Information".
All prospectuses relating to the Common Shares used in Canada (1) before a
receipt for the Final PREP Prospectus was issued by the Reviewing Authority on
behalf of the Qualifying Authorities or (2) after such receipt was issued by
and, prior to the execution and delivery of this Agreement, that omits the PREP
Information, are referred to herein collectively as the "Canadian Preliminary
Prospectus". The Final PREP Prospectus for which a receipt has been obtained
from the Reviewing Authority on behalf of the Qualifying Authorities is herein
referred to as the "Canadian Prospectus", except that, if, after the execution
of this Agreement, a Supplemental PREP Prospectus containing the PREP
Information is filed with the Qualifying Authorities, the term "Canadian
Prospectus" refers to such Supplemental PREP Prospectus. Any amendment to the
Canadian Prospectus, any amended or supplemental prospectus or auxiliary
material, information, evidence, return, report, application, statement or
document that may be filed by or on behalf of the Company under the securities
laws of the Qualifying Provinces prior to the First Closing Date (as hereinafter
defined) or, where such document is deemed to be incorporated by reference in
the Final PREP Prospectus, prior to the expiry of the period of distribution of
the Common Shares, is referred to herein collectively as the "Supplementary
Material". For the purposes of this Agreement, all references to the Canadian
Preliminary Prospectus, Final PREP Prospectus, Supplemental PREP Prospectus and
Canadian Prospectus are deemed to include the copy thereof filed with the
Qualifying Authorities pursuant to the System for Electronic Document Analysis
and Retrieval ("SEDAR").
The U.S. Prospectus and the Canadian Prospectus are herein collectively
called the "Prospectus".
The Company hereby confirms its agreements with the Underwriters as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents, warrants and covenants to each Underwriter
as follows:
(a) Compliance with Registration Requirements. The Registration Statement
and any Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or, to
the best knowledge of the Company, are contemplated or threatened by the
Commission.
The U.S. Prospectus when filed complied in all material respects with the
Securities Act and, if filed by electronic transmission pursuant to ▇▇▇▇▇
(except as may be permitted by Regulation S-T under the Securities Act), was
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Common Shares. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The U.S. Prospectus, as
amended or supplemented, as of its date and at all subsequent times, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the U.S. Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with
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information relating to any Underwriter furnished to the Company in writing by
the Representatives expressly for use therein. There are no contracts or other
documents required to be described in the U.S. Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or filed as
required.
(b) Compliance with Canadian Prospectus Requirements. The Company is
eligible to use the PREP Procedures. A receipt has been obtained from the
Reviewing Authority on behalf of the Qualifying Authorities in respect of the
Final PREP Prospectus and no order suspending the distribution of the Common
Shares has been issued by any of the Qualifying Authorities. At the time the
Registration Statement became effective under the 1933 Act and at all times
subsequent thereto up to and including the First Closing Date and, if
applicable, the Second Closing Date, the Canadian Prospectus complied and will
comply in all material respects with the applicable securities legislation of
the Qualifying Provinces as interpreted and applied by the Reviewing Authority
(including the PREP Procedures); and each of the Canadian Prospectus, any
Supplementary Material or any amendment or supplement thereto, constituted and
will constitute full, true and plain disclosure of all material facts relating
to the Company and the Common Shares, and did not and will not include an untrue
statement of material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the Canadian
Prospectus or any Supplementary Material made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter
expressly for use in the Canadian Prospectus or any Supplementary Material (or
any amendment or supplement thereto).
Each Canadian Preliminary Prospectus and the Canadian Prospectus complied
when filed in all material respects with the applicable securities legislation
of the Qualifying Provinces and each Canadian Preliminary Prospectus and the
Canadian Prospectus delivered to the Underwriters for use in connection with
this offering were identical to the electronically transmitted copies thereof
filed with SEDAR.
The Canadian Prospectus will be substantially in the same form as the U.S.
Prospectus except for such deletions therefrom and additions thereto as are
permitted or required by the securities legislation of the Qualifying Provinces.
(c) U.S. Offering Materials Furnished to Underwriters. The Company has
delivered to each of the Representatives one complete signed copy of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and the U.S. Prospectus, as amended or supplemented, in such
quantities and at such places as the Representatives have reasonably requested
for each of the Underwriters.
(d) Canadian Offering Materials Furnished to Underwriters. The Company
has delivered to the Representatives complete signed copies of the Canadian
Prospectus and of each consent and certificate of experts filed therewith with
the Qualifying Authorities, and conformed copies of the Canadian Prospectus and
each Canadian Preliminary Prospectus, as amended or supplemented, in such
quantities and at such places as the Representatives have reasonably requested
for each of the Underwriters.
(e) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Common Shares, any offering material in connection with the offering and
sale of the Common Shares other than a preliminary prospectus, the Prospectus or
the Registration Statement.
(f) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as to rights of indemnification
hereunder which may be limited by applicable law and except as to the
enforcement hereof which may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(g) Authorization of the Common Shares. The Common Shares to be purchased
by the Underwriters from the Company have been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set forth
herein, will be validly issued, fully paid and nonassessable.
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(h) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or qualified for
distribution under the Canadian Prospectus or included in the offering
contemplated by this Agreement, except for such rights as have been duly waived.
(i) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(j) Independent Accountants. PricewaterhouseCoopers LLP and Ernst & Young
LLP, who have expressed their opinions with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto) of and
supporting schedules filed with the Commission as a part of the Registration
Statement and included in the U.S. Prospectus and filed with the Qualifying
Authorities as a part of the Canadian Prospectus, are independent public or
certified public accountants as required by the Securities Act and within the
meaning of applicable Canadian securities laws, regulations and policies.
(k) Preparation of the Financial Statements. The financial statements
filed with the Commission as a part of the Registration Statement and included
in the U.S. Prospectus and filed with the Qualifying Authorities as a part of
the Canadian Prospectus together with the related notes present fairly the
consolidated financial position of Odyssey America Reinsurance Corporation and
its subsidiaries (and, upon completion of the Offering and the events set forth
in the Prospectus under the caption "Certain Relationships and Related
Transactions-Recapitalization and Corporate Structure", the Company and its
subsidiaries) as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. The supporting schedules
included as exhibits to the Registration Statement present fairly the
information required to be stated therein. Such financial statements and
supporting schedules have been prepared in conformity with generally accepted
accounting principles as applied in the United States ("U.S. GAAP") applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. No other financial statements or supporting
schedules are required to be included in the Registration Statement or the
Prospectus. The U.S. GAAP financial data set forth in the Prospectus under the
captions "Prospectus Summary -- Summary Financial Data", "Selected Historical
Financial Data" and the "Actual" column under "Capitalization" fairly present
the information set forth therein on a basis consistent with that of the
financial statements contained in the Registration Statement and the Canadian
Prospectus. Notes -- , -- and -- to the financial statements of
-- , -- and -- , respectively, included in the Canadian
Prospectus explain and quantify the effect of the material differences between
Canadian generally accepted accounting principles ("Canadian GAAP") and U.S.
GAAP that relate to measurements and provide disclosure consistent with Canadian
GAAP requirements to the extent not already reflected in such financial
statements.
(l) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement. Each of the Company and each
subsidiary is duly qualified as a foreign corporation to transact business and
is in good standing in the State of Delaware and each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such jurisdictions
(other than the State of Delaware)
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where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change. All of
the issued and outstanding capital stock of each subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable and is owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. The Company does not
control (as defined in Rule 405 under the Securities Act) any corporation,
association or other entity other than the subsidiaries listed in Exhibit 21.1
to the Registration Statement.
(m) Capitalization and Other Capital Stock Matters. Upon the completion
of the Offering and the events set forth in the Prospectus under the caption
"Certain Relationships and Related Transactions -- Recapitalization and
Corporate Structure", the authorized, issued and outstanding capital stock of
the Company will be as set forth in the Prospectus under the "As Adjusted"
column under the caption "Capitalization" (other than for subsequent issuances,
if any, pursuant to employee benefit or incentive plans described in the
Prospectus or upon exercise of outstanding options described in the Prospectus).
The Common Stock (including the Common Shares) conforms in all material respects
to the description thereof contained in the Prospectus. Upon the completion of
the Offering and the events set forth in the Prospectus under the caption
"Certain Relationships and Related Transactions -- Recapitalization and
Corporate Structure", all of the issued and outstanding shares of Common Stock
will have been duly authorized and validly issued, will be fully paid and
nonassessable and will have been issued in compliance with federal and state
securities laws. Upon the completion of the Offering and the events set forth in
the Prospectus under the caption "Certain Relationships and Related Transactions
-- Recapitalization and Corporate Structure", none of the outstanding shares of
Common Stock will have been issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company or any of its subsidiaries other than those
described in the Prospectus. The description of the Company's stock option,
stock bonus and other employee incentive plans or arrangements, and the options
or other rights granted thereunder, set forth in the Prospectus accurately and
fairly presents in all material respects the information required to be shown
with respect to such plans, arrangements, options and rights.
(n) Stock Exchange Listing. The Common Shares have been approved for
listing on the New York Stock Exchange, Inc. (the "New York Stock Exchange")
subject only to official notice of issuance. The Toronto Stock Exchange has
conditionally approved the listing of the Common Shares subject to the Company's
fulfillment of all the requirements of The Toronto Stock Exchange on or before
[ -- ], 2001.
(o) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its certificate of incorporation or by-laws or is in default (or,
with the giving of notice or lapse of time, would be in default) ("Default")
under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (each, an "Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change. The
Company's execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus (i) have been duly
authorized by all necessary corporate action and will not result in any
violation of the provisions of the certificate of incorporation or by-laws of
the Company or any subsidiary, (ii) will not conflict with or constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary, except for any violations which would not,
individually or in the aggregate, result in a Material Adverse Change. No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is
required for the Company's execution, delivery and performance of this Agreement
and consummation of the transactions contemplated hereby and by the
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Prospectus, except such as have been obtained or made by the Company and are in
full force and effect under the Securities Act, applicable state securities or
blue sky laws and from the National Association of Securities Dealers, Inc. (the
"NASD").
(p) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened (i) against or, to the best of the Company's
knowledge, affecting the Company or any of its subsidiaries, (ii) which has as
the subject thereof any officer or director of, or property owned by, the
Company or any of its subsidiaries or (iii) relating to environmental or
discrimination matters, where in any such case (A) such action, suit or
proceeding could reasonably be expected to be determined adversely to the
Company or such subsidiary and (B) any such action, suit or proceeding, if so
determined adversely, would reasonably be expected to result in a Material
Adverse Change or would reasonably be expected to adversely affect the
consummation of the transactions contemplated by this Agreement. No labor
dispute with the employees of the Company or any of its subsidiaries exists or,
to the best of the Company's knowledge, is threatened or imminent, which might
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change.
(q) Intellectual Property Rights. The Company and its subsidiaries own or
possess sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively, "Intellectual
Property Rights") reasonably necessary to conduct their businesses as now
conducted; and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Change. Neither the Company nor
any of its subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or conflict,
if the subject of an unfavorable decision, would result in a Material Adverse
Change.
(r) All Necessary Licenses. Each of Odyssey America Reinsurance
Corporation, Odyssey Reinsurance Corporation, ▇▇▇▇▇▇ Insurance Company and
Lloyd's Syndicate 1218 (each an "Insurance Subsidiary", collectively the
"Insurance Subsidiaries") is duly licensed to conduct an insurance or a
reinsurance business, as the case may be, under the insurance statutes of each
jurisdiction in which the conduct of its business requires such licensing,
except for such jurisdictions in which the failure of the Insurance Subsidiaries
to be so licensed would not, individually or in the aggregate, result in a
Material Adverse Change. The Insurance Subsidiaries have made all required
filings under applicable insurance statutes in each jurisdiction where such
filings are required, except for such jurisdictions in which the failure to make
such filings would not, individually or in the aggregate, result in a Material
Adverse Change. Each of the Insurance Subsidiaries has all other necessary
authorizations, approvals, orders, consents, certificates, permits,
registrations and qualifications of and from all insurance regulatory
authorities necessary to conduct their respective businesses as described in the
Prospectus, except where the failure to have such authorizations, approvals,
orders, consents, certificates, permits, registrations or qualifications would
not, individually or in the aggregate, result in a Material Adverse Change, and
the Company and each of its Insurance Subsidiaries has not received any
notification from any insurance regulatory authority to the effect that any
additional authorization, approval, order, consent, certificate, permit,
registration or qualification is needed to be obtained by the Company and each
of its Insurance Subsidiaries in any case where it could be reasonably expected
that (x) the Company and each of its Insurance Subsidiaries would be required
either to obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or to cease or otherwise
limit the writing of certain business and (y) the failure to obtain such
additional authorization, approval, order, consent, certificate, permit,
registration or qualification or the limiting of the writing of such business
would result in a Material Adverse Change; and no insurance regulatory authority
having jurisdiction over the Company or any of its Insurance Subsidiaries has
issued any order or decree impairing, restricting or prohibiting (i) the payment
of dividends by any of the Insurance Subsidiaries to its parent, other than
those restrictions applicable to insurance or reinsurance companies generally,
or (ii) the continuation of the business of the Company or any of the Insurance
Subsidiaries in all material respects as presently conducted.
(s) Title to Properties. Except as otherwise disclosed in the Prospectus,
the Company and each of its subsidiaries has good and marketable title to all
the properties and assets reflected as owned by each of them in the Prospectus,
in each case free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such
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property and do not materially interfere with the use made or proposed to be
made of such property by the Company or such subsidiary. The real property,
improvements, equipment and personal property held under lease by the Company or
any subsidiary are held under valid and enforceable leases, with such exceptions
as do not result in a Material Adverse Change.
(t) Tax Law Compliance. The Company and its consolidated subsidiaries
have filed all necessary federal, state and foreign income and franchise tax
returns, other than those which would not, individually or in the aggregate,
result in a Material Adverse Change, and have paid all taxes required to be paid
by any of them and, if due and payable, any related or similar assessment, fine
or penalty levied against any of them, except assessments against which appeals
have been or will be promptly taken in good faith or as to which adequate
reserves have been provided. Adequate charges, accruals and reserves have been
made in the applicable financial statements referred to in Section 1(i) above in
respect of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its consolidated
subsidiaries has not been finally determined.
(u) Company Not an "Investment Company". The Company is not, and after
receipt of payment for the Common Shares will not be, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(v) Insurance. The Company is insured as disclosed in the Prospectus
under the caption "Certain Relationships and Related Transactions -- Fairfax
Insurance Coverage". Neither the Company nor any of its subsidiaries has been
denied any insurance coverage which it has sought or for which it has applied.
(w) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Common Shares.
(x) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with U.S. GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(y) ERISA Compliance. The Company and its subsidiaries and any "employee
benefit plan" (within the meaning of the Employee Retirement Income Security Act
of 1974, as amended, and the regulations and published interpretations
thereunder ("ERISA")) established or maintained by the Company, its subsidiaries
and their "ERISA Affiliates" (as defined below) are in compliance with ERISA and
the Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code"), except such as will not, individually
or in the aggregate, result in a Material Adverse Change. "ERISA Affiliate"
means, with respect to the Company and a subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Code of which
the Company or such subsidiary is a member. No "reportable event" (as defined
under ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" for which the Company, its subsidiaries or any of their
ERISA Affiliates would have any liability, which might reasonably be expected
to, individually or in the aggregate, result in a Material Adverse Change. No
"employee benefit plan" for which the Company, its subsidiaries or any of their
ERISA Affiliates would have any liability, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as defined
under ERISA) which might reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change. Neither the Company, its
subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections
412, 4971, 4975 or 4980B of the Code, which might reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Change. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries and any of their ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to
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act, which would cause the loss of such qualification, which might reasonably be
expected to, individually or in the aggregate, result in a Material Adverse
Change. No event or series of events of the nature described in this Section
1(y) has occurred or is reasonably expected to occur for which the Company, its
subsidiaries or any of their ERISA Affiliates would have any liability which
might reasonably be expected to, individually or in the aggregate, result in a
Material Adverse Change. No event or series of events of the nature described in
this Section 1(y) has occurred or is reasonably expected to occur for which the
Company, its subsidiaries or any of their ERISA Affiliates would have any
liability which might reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change.
Any certificate signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
(a) The Firm Common Shares. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth. On
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $[ ] per share.
(b) The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (or such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m. New York time, on [ ], 2001 or such other
time and date not later than 1:30 p.m. New York time, on [ ], 2001 as
the Representatives and the Company shall agree upon (the time and date of such
closing are called the "First Closing Date").
(c) The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of [ ] Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing Date" shall refer to the time and date
of delivery of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Common Shares. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
(d) Public Offering of the Common Shares. The Representatives hereby
advise the Company that the Underwriters intend to offer for sale to the public,
as described in the Prospectus, their respective portions of the Common Shares
as soon after this Agreement has been executed, the Registration Statement has
been
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declared effective and the Supplemental PREP Prospectus has been filed with the
Qualifying Authorities as the Representatives, in their sole judgment, have
determined is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Firm Common Shares
shall be made at the First Closing Date (and, if applicable, for the Optional
Common Shares at the Second Closing Date) by wire transfer of immediately
available funds to a bank account designated in writing by the Company or in
such other manner of payment as the Company and the Representatives may agree.
It is understood that the Representatives have been authorized, for their
own accounts and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
BAS and CIBC, individually and not as the Representatives of the Underwriters,
may (but shall not be obligated to) make payment for any Common Shares to be
purchased by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
(f) Delivery of the Common Shares. The Company shall deliver, or cause to
be delivered, to the Representatives, for the accounts of the several
Underwriters, certificates for the Firm Common Shares at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor or in such other manner of
payment as the Company and the Representative may agree. The Company shall also
deliver, or cause to be delivered, to the Representatives, for the accounts of
the several Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor or in such other manner of payment as the Company and the
Representative may agree. The certificates for the Common Shares shall be in
definitive form and registered in such names and denominations as the
Representatives shall have requested at least two full business days prior to
the First Closing Date (or the Second Closing Date, as the case may be) and
shall be made available for inspection on the business day preceding the First
Closing Date (or the Second Closing Date, as the case may be) at a location in
New York City as the Representatives may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are first
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representatives shall reasonably request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending on the
later of the First Closing Date or such date, as in the opinion of counsel for
the Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representatives reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the
U.S. Prospectus, (iii) of the time and date that any post-effective amendment to
the Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement
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or any post-effective amendment thereto or of any order preventing or suspending
the use of the U.S. Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall comply
with the provisions of Rules 424(b), 430A and 434, as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) were received in a timely manner by
the Commission.
(c) Compliance with Canadian Securities Requirements. The Company will
comply with the requirements of the PREP Procedures and will notify the
Underwriters immediately, and confirm the notice in writing, (i) when any
supplement to the Canadian Prospectus or any amended Canadian Prospectus or any
Supplementary Material shall have been filed, (ii) of the receipt of any
comments from the Reviewing Authority or any Qualifying Authority, (iii) of any
request by the Reviewing Authority to amend or supplement the Final PREP
Prospectus or the Canadian Prospectus or for additional information, and (iv) of
the issuance by the Reviewing Authority or any Qualifying Authority of any order
having the effect of ceasing or suspending the distribution of the Common Shares
or the trading (during the period of the distribution of the Common Shares) in
the Common Shares of the Company, or of the institution or, to the knowledge of
the Company, of the threatening of any proceedings for any such purpose. The
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(d) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the reasonable determination of the Representatives after consultation
with counsel for the Underwriters it is otherwise necessary to amend or
supplement the Prospectus to comply with law, the Company agrees to promptly
prepare (subject to Section 3(A)(a) hereof), file with the Commission and the
Qualifying Authorities and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law,
provided that if any Underwriter is required to deliver a prospectus in
connection with the sale of any of the Common Shares at any time nine months or
more after the date of the Prospectus, such amendments, filing and furnishing
shall be at the expense of such Underwriter.
(e) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish to the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may reasonably request.
(f) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial securities laws of
those jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Common Shares.
Notwithstanding the foregoing, the Company shall not be required to qualify as a
foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction, other than Canada, where it is not
presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Representatives promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Common Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification, registration
or exemption, the Company shall use its best efforts to obtain the withdrawal
thereof at the earliest possible moment.
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(g) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Common Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
(h) Transfer Agents. The Company shall engage and maintain, at its
expense, one or more registrars and transfer agents in the U.S. and in Canada
for the Common Stock.
(i) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending [ -- ], 2002 that satisfies the provisions of Section 11(a) of the
Securities Act.
(j) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall (A) file, on a timely basis, with the Commission and the New
York Stock Exchange all reports and documents required to be filed under the
Exchange Act, (B) report the use of proceeds from the issuance of the Common
Shares as may be required under Rule 463 under the Securities Act and (C) file,
on a timely basis, with the Qualifying Authorities and The Toronto Stock
Exchange, all reports and documents required to be filed under the securities
legislation of the Qualifying Provinces and the rules of The Toronto Stock
Exchange, as applicable.
(k) Agreement Not To Offer or Sell Additional Securities. During the
period commencing on the date hereof and ending on the 180th day following the
date of the Prospectus, the Company will not, without the prior written consent
of the Representatives (which consent may be withheld at the sole discretion of
the Representatives), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer, or announce the offering of, or file any registration statement
under the Securities Act (other than a registration statement on Form S-8) or
under the securities laws of any of the Qualifying Provinces in respect of, any
shares of Common Stock, options or warrants to acquire shares of the Common
Stock or securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement with respect to
the Common Shares); provided, however, that the Company may issue shares of its
Common Stock or options to purchase its Common Stock, or Common Stock upon
exercise of options, pursuant to any stock option, stock bonus or other stock
plan or arrangement described in the Prospectus, but only if any holder of such
shares, options, or shares issued upon exercise of such options, who is an
officer or director of the Company or any of its subsidiaries has agreed or
agrees in writing not to sell, offer, dispose of or otherwise transfer any such
shares or options during such period without the prior written consent of the
Representatives (which consent may be withheld at the sole discretion of the
Representatives).
(l) Future Reports to the Representatives. Until the third anniversary of
the date hereof, the Company will furnish to BAS at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: [ ] and CIBC at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ MSJ 2S8, Attention: ▇▇▇▇▇▇▇▇▇ Code, Executive Director,
Financial Institutions: (i) as soon as practicable after the end of each fiscal
year, copies of the Annual Report of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other report filed by the Company with the Commission; and
(iii) from time to time, such other public information concerning the Company as
the Representatives may reasonably request.
(m) Translation Opinions. The Company shall cause its Canadian legal
counsel to deliver to the Underwriters an opinion, dated the date of the filing
of the French language versions of each Canadian Preliminary Prospectus, the
Final PREP Prospectus and the Supplemental PREP Prospectus, to the effect that
the French language version of each such prospectus (other than the financial
statements and the financial information set forth under the captions
"Capitalization" "Dilution", "Selected Historical Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other financial data contained therein or omitted therefrom) is
in all material respects a complete and proper translation of the English
versions thereof and is not susceptible of any materially different
interpretation with respect to any material matter contained therein. The
Company shall cause its Canadian legal counsel to
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deliver to the Underwriters a similar opinion as to the French language
translation of any information contained in any Supplementary Material, in form
and substance satisfactory to the Underwriters prior to the filing thereof with
the Qualifying Authorities.
(n) Translation Opinions -- Financial Statements. The Company shall cause
its auditors to deliver to the Underwriters an opinion, dated the date of the
filing of the French language versions of each Canadian Preliminary Prospectus,
the Final PREP Prospectus and the Supplemental PREP Prospectus, to the effect
that the financial statements and other financial information and data,
including the financial information set forth under the captions "Dilution",
"Selected Historical Financial Data" "Capitalization" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
other financial data contained in the French language version of each such
prospectus is in all material respects a complete and proper translation of the
English versions thereof and is not susceptible of any materially different
interpretation with respect to any material matter contained therein. The
Company shall cause its auditors to deliver to the Underwriters a similar
opinion as to the French language translation of any information contained in
any Supplementary Material, in form and substance satisfactory to the
Underwriters, prior to the filing thereof with the Reviewing Authority.
The Representatives, on behalf of the several Underwriters, may, in their
sole discretion, waive in writing the performance by the Company of any one or
more of the foregoing covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrars and transfer agents of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters (iv) all fees and expenses of
the Company's counsels, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), any preliminary prospectus and the Prospectus, and all
amendments and supplements thereto, (vi) all filing fees, reasonable attorneys'
fees and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the state securities or blue sky laws or the securities laws of the Qualifying
Provinces, and, if requested by the Representatives, preparing and printing a
"Blue Sky Survey" or memorandum, and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, (viii) the fees and expenses associated with listing the Common Shares
on the New York Stock Exchange and The Toronto Stock Exchange, and (ix) all
other fees, costs and expenses referred to in Item 13 of Part II of the
Registration Statement. Except as provided in this Section 4, Section 6, Section
8 and Section 9 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsels.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 1 hereof as of the date hereof and as of the First Closing Date
as though then made and, with respect to the Optional Common Shares, as of the
Second Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Representatives
shall have received from PricewaterhouseCoopers LLP, independent public or
certified public accountants for the Company, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the
Representatives,
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containing statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional [ ] conformed copies of
such accountants' letter for each of the several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD. For the period from and after effectiveness of this Agreement and
prior to the First Closing Date and, with respect to the Optional Common Shares,
the Second Closing Date:
(i) the Company shall have filed the U.S. Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by Rule
424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective amendment
shall have become effective; or, if the Company elected to rely upon Rule
434 under the Securities Act and obtained the Representatives' consent
thereto, the Company shall have filed a Term Sheet with the Commission in
the manner and within the time period required by such Rule 424(b);
(ii) the Company shall have filed the Final PREP Prospectus with the
Qualifying Authorities and a receipt therefor shall have been issued by the
Reviewing Authority on behalf of the Qualifying Authorities;
(iii) a Supplemental PREP Prospectus containing the PREP Information
shall have been filed with the Qualifying Authorities in accordance with
the PREP Procedures;
(iv) (A) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect
and no proceedings for such purpose shall have been instituted or
threatened by the Commission and (B) no order having the effect of ceasing
or suspending the distribution of the Common Shares shall have been issued
by any Qualifying Authority, no proceedings shall have been initiated or
threatened by any securities regulatory authority or stock exchange in
Canada and any request on the part of the Qualifying Authorities for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters; and
(v) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the Second Closing Date:
(i) there shall not have occurred any change, or any development that
could reasonably be expected to result in a change, in the condition,
financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course
of business, of the Company and its subsidiaries, considered as one entity,
the effect of which is, in the judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
Offering or delivery of the Common Shares as contemplated in the
Registration Statement and the Prospectus; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded financial strength or claims paying
ability of the Company or any of its subsidiaries by A.M. Best Company,
Inc. or Standard & Poor's Insurance Rating Services.
(d) Opinion of Counsel for the Company. On each of the First Closing Date
and the Second Closing Date the Representatives shall have received the opinion
and 10b-5 letter of Shearman & Sterling, counsel for
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the Company, each dated as of such Closing Date, the forms of which are attached
as Exhibit A-1 (and the Representatives shall have received an additional
[ ] conformed copies of such counsel's legal opinion and 10b-5 letter for
each of the several Underwriters).
(e) Opinion of General Counsel of the Company. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the opinion and 10b-5 letter of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel for the
Company, dated as of such Closing Date, the forms of which are attached as
Exhibit A-2 (and the Representatives shall have received an additional [ ]
conformed copies of such General Counsel's legal opinion and 10b-5 letter for
each of the several Underwriters).
(f) Opinion of Canadian Counsel for the Company. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the opinion of Torys, Canadian counsel for the Company, dated as of such Closing
Date, the form of which is attached as Exhibit B (and the Representatives shall
have received an additional [ ] conformed copies of such counsel's legal
opinion for each of the Underwriters).
(g) Opinion of Counsel for the Underwriters. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated as of
such Closing Date, in form and substance satisfactory to the Underwriters.
(h) Opinion of Canadian Counsel for the Underwriters. On each of the
First Closing Date and the Second Closing Date the Representatives shall have
received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Canadian counsel for the Underwriters,
dated as of such Closing Date, in form and substance satisfactory to the
Underwriters.
(i) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsections (b)(ii) and (c)(ii) of this Section 5, and further to the effect
that:
(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the Company set
forth in Section 1 of this Agreement are true and correct with the same
force and effect as though expressly made on and as of such Closing Date;
and
(iii) the Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(j) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received from
PricewaterhouseCoopers LLP, independent public or certified public accountants
for the Company, a letter dated such date, in form and substance satisfactory to
the Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be (and the Representatives shall have
received an additional [ ] conformed copies of such accountants' letter for
each of the several Underwriters).
(k) Lock-Up Agreement from Certain Securityholders of the Company. On the
date hereof, the Company shall have furnished to the Representatives an
agreement in the form of Exhibit C hereto from each officer of the Company and
each beneficial owner of Common Stock (as defined and determined according to
Rule 13d-3 under the Exchange Act, except that a one hundred eighty day period
shall be used rather than the sixty day period set forth therein) as of the date
of this Agreement, and such agreement shall be in full force and effect on each
of the First Closing Date and the Second Closing Date.
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(l) Certain Events. On or prior to the First Closing Date, the events set
forth in the Prospectus in the first paragraph under the caption "Certain
Relationships and Related Transactions -- Recapitalization and Corporate
Structure" shall have been completed.
(m) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, the Representatives and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Common Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated (i) by the Representatives pursuant to Section 5, (ii) by the Company
pursuant to Section 7, or (iii) by the Representatives pursuant to Section
11(iv), or if the sale to the Underwriters of the Common Shares on the First
Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Representatives upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the Underwriters in connection with the proposed
purchase and the offering and sale of the Common Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company to any Underwriter, except
that, if this Agreement is terminated by the Company, the Company shall be
obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the Company, or (c)
of any party hereto to any other party, except that in each case the provisions
of Section 8 and Section 9 shall at all times be effective and shall survive
such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its directors, officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act, the Exchange Act or Canadian securities legislation, as
applicable, (including each affiliate of any Underwriter who is deemed a third
party beneficiary pursuant to Section 14 hereof, its directors, officers and
employees, and any controlling person of such affiliate) against any loss,
claim, damage, liability or expense, as incurred, to which such Underwriter or
such controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, under the
securities legislation of the Qualifying Provinces or other provincial or
federal statutory law or regulation of Canada or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any
amendment thereto, including any information deemed to be a part thereof
pursuant to Rule 430A or Rule 434 under the Securities Act, or the omission or
alleged omission therefrom of a material fact required
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to be stated therein or necessary to make the statements therein not misleading;
or (ii) upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to reimburse each
Underwriter and each such controlling person for any and all expenses (including
the reasonable fees and disbursements of counsel chosen by the Representatives)
as such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
with respect to any preliminary prospectus, the foregoing indemnity agreement
shall not inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage, liability or expense purchased Common Shares, or any
person controlling such Underwriter, if copies of the U.S. Prospectus or the
Canadian Prospectus, as applicable, were timely delivered to the Underwriter
pursuant to Section 2 and a copy of the U.S. Prospectus or the Canadian
Prospectus, as applicable, (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person at or prior to the written
confirmation of the sale of the Common Shares to such person, and if such
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and the Canadian Prospectus and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act, against any loss, claim, damage, liability or expense, as incurred, to
which the Company, or any such director, officer or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, under the securities legislation of the
Qualifying Provinces or other provincial or federal statutory law or regulation
of Canada or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, or the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use therein; and
to reimburse the Company, or any such director, officer or controlling person
for any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that the only
information that the Underwriters have furnished to the Company expressly for
use in the Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) are the statements set forth (A) in the
table in the first paragraph and in the second paragraph, the second sentence of
the thirteenth paragraph, the fourteenth paragraph, the sixteenth paragraph and
the seventeenth paragraph under the caption "Underwriting" in the U.S.
Prospectus, and (B) in the table in the first paragraph and in the second,
third, seventh, eighth, thirteenth, fourteenth, fifteenth, sixteenth and
seventeenth paragraphs under the caption "Underwriting" in the Canadian
Prospectus; and the Underwriters confirm that such statements
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are correct. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (BAS and CIBC in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 8(a) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 8(a)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it determines in
good faith such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating in reasonable detail the unpaid balance as
unreasonable, in each case prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
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consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held to
be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other hand, from the offering of the Common Shares pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other hand, in connection with the offering of the
Common Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Common
Shares pursuant to this Agreement (before deducting expenses) received by the
Company, and the total underwriting discount received by the Underwriters, in
each case as set forth on the front cover page of the Prospectus (or, if Rule
434 under the Securities Act is used, the corresponding location on the Term
Sheet) bear to the aggregate initial public offering price of the Common Shares
as set forth on such cover. The relative fault of the Company, on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each director, officer and employee
of an Underwriter and each person, if any, who controls an Underwriter within
the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as such Underwriter and each director of the Company,
each officer of the Company who signed the Registration Statement or the
Canadian Prospectus, and each person, if any, who controls the Company with the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as the Company.
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SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination. In any such case either
the Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date this Agreement may be terminated by the Representatives by notice given to
the Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the New
York Stock Exchange or The Toronto Stock Exchange, or trading in securities
generally on the Nasdaq Stock Market, the New York Stock Exchange or The Toronto
Stock Exchange shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of United States federal, New York, California or Canadian
authorities; (iii) there shall have occurred any outbreak or escalation of
hostilities or any crisis or calamity involving or affecting the United States
or Canada, or any change in the United States, Canada or international financial
markets, or any substantial change or development involving a prospective
substantial change in United States', Canada's or international political,
financial or economic conditions, as in the judgment of the Representative is
material and adverse and makes it impracticable to market the Common Shares in
the manner and on the terms described in the Prospectus or to enforce contracts
for the sale of securities; or (iv) there shall have occurred any change, or any
development that could reasonably be expected to result in a change, in the
condition, financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity, the
effect of which is, in the judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the Offering or
delivery of the Common Shares as contemplated in the Registration Statement and
the Prospectus. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company to any Underwriter except that the
Company shall be obligated to reimburse the expenses of the Representatives and
the Underwriters in accordance with Sections 4 and 6 hereof, (b) any Underwriter
to the Company, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless
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of any investigation made by or on behalf of any Underwriter or the Company or
any of its or their partners, officers or directors or any controlling person,
as the case may be, and will survive delivery of and payment for the Common
Shares sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Child
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and
CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Managing Director
U.S. Financial Institutions Group
with a copy to:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Company:
Odyssey Re Holdings Corp.
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Executive Officer
with a copy to:
Odyssey Re Holdings Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Senior Vice President,
General Counsel and Corporate Secretary
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS; THIRD PARTY BENEFICIARY. This Agreement will
inure to the benefit of and be binding upon the parties hereto, including any
substitute Underwriters pursuant to Section 10 hereof, and their
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24
respective successors, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and to
any third party beneficiary designated below and any successor of such third
party beneficiary, and no other person will have any right or obligation
hereunder. The term "successors" shall not include any purchaser of the Common
Shares as such from any of the Underwriters merely by reason of such purchase.
Any affiliate of any Underwriter which is duly qualified and authorized to sell
the Common Shares in Canada pursuant to the Canadian Prospectus and offers and
sells the Common Shares in the Qualifying Provinces or any affiliate of any
Underwriter that signs the Canadian Prospectus shall be deemed a third party
beneficiary of the representations and warranties of the Company contained in
Section 1, the covenants of the Company contained in Section 3, the
indemnification and contribution obligations of the Company contained in Section
8 and Section 9 and the officers' certificates, legal opinions and other
documents required to be delivered to the Underwriters pursuant hereto, and each
such affiliate shall have the right to enforce such provisions of this Agreement
to the same extent as if it were an Underwriter.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act, the Exchange Act and applicable securities laws of the
Qualifying Provinces.
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25
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
ODYSSEY RE HOLDINGS CORP.
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in New York, New York as of the date first above written.
BANC OF AMERICA SECURITIES LLC
CIBC WORLD MARKETS CORP
Acting as Representatives of the
several Underwriters named in
the attached Schedule A
BY BANC OF AMERICA SECURITIES LLC
By:
----------------------------------------------------
Name:
Title:
BY CIBC WORLD MARKETS CORP
By:
----------------------------------------------------
Name:
Title:
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26
SCHEDULE A
NUMBER OF FIRM
COMMON SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Banc of America Securities LLC.............................. [ ]
CIBC World Markets Corp..................................... [ ]
Bear, ▇▇▇▇▇▇▇ & Co. Inc..................................... [ ]
▇.▇. ▇▇▇▇▇▇ Securities Inc.................................. [ ]
[ -- ].................................................. [ ]
Total.................................................. [ ]
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EXHIBIT A-1
The final opinion in draft form should be attached as Exhibit A-1 at the time
this Agreement is executed.
Opinion of Shearman & Sterling, counsel for the Company to be delivered
pursuant to Section 5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A-1 include any supplements
thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(iv) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company
pursuant to the Underwriting Agreement against payment of the consideration
set forth therein, will be validly issued, fully paid and nonassessable.
(v) Each of The Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the
Commission under the Securities Act. To the best knowledge of such counsel,
no stop order suspending the effectiveness of either of the Registration
Statement or the Rule 462(b) Registration Statement, if any, has been
issued under the Securities Act and no proceedings for such purpose have
been instituted or are pending or are contemplated or threatened by the
Commission. Any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) under the Securities Act has been made in
the manner and within the time period required by such Rule 424(b).
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, the U.S. Prospectus, and each amendment or
supplement to the Registration Statement and the U.S. Prospectus, as of
their respective effective or issue dates (other than the financial
statements, financial data and supporting schedules included therein or in
exhibits to or excluded from the Registration Statement, as to which no
opinion need be rendered), as of their respective effective dates, appear
on their face to have been appropriately responsive in all material
respects with the applicable requirements of the Securities Act.
(vii) The Common Shares have been authorized for listing on the New
York Stock Exchange.
(viii) The statements (i) in the Prospectus under the captions
"Description of Capital Stock", "Shares Eligible for Future Sale" and
"Certain United States Federal Tax Considerations For Non-United States
Holders of Common Stock" and (ii) in Item 14 and Item 15 of the
Registration Statement, insofar as such statements constitute matters of
law, summaries of legal matters, the Company's certificate of incorporation
or by-law provisions, documents or legal proceedings, or legal conclusions,
has been reviewed by such counsel and fairly present and summarize, in all
material respects, the matters referred to therein.
(ix) Based upon such counsel's review of the New York State statutes,
rules or regulations, the Delaware General Corporation Law and the relevant
United States federal laws (the "Requirements of Law") which in such
counsel's experience are normally applicable to transactions of the type
provided for in the Underwriting Agreement, but without having made any
special investigation concerning any other Requirements of Law, no consent,
approval, authorization is required for the Company's execution, delivery
and performance of the Underwriting Agreement and consummation of the
transactions contemplated thereby and by the U.S. Prospectus, except as
required under the Securities Act, applicable state securities or blue sky
laws and from the NASD.
A-1
28
(x) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the laws of the State New York or the
federal law of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion (which shall be dated the First Closing Date
or the Second Closing Date, as the case may be, shall be satisfactory in form
and substance to the Underwriters, shall expressly state that the Underwriters
may rely on such opinion as if it were addressed to them and shall be furnished
to the Representative) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
In addition, such counsel shall state the following in a letter delivered
simultaneously with its opinion:
Such counsel has examined the Underwriting Agreement and the originals, or
copies identified to their satisfaction, of such corporate records of the
Company, certificates of public officials, officers of the Company and other
persons, and such other documents, agreements and instruments as such counsel
deemed necessary or appropriate as a basis for the opinions hereinafter
expressed. In their examinations, such counsel has assumed the genuineness of
all signatures, the authenticity of all documents submitted to them as originals
and the conformity with the originals of all documents submitted to them as
copies. In rendering the opinions expressed below, such counsel has relied as to
factual matters, to the extent such counsel deemed proper, upon the
representations and warranties of the Company contained in or made pursuant to
the Underwriting Agreement, certificates of officers of the Company and
certificates of public officials. Such counsel has also reviewed and
participated in discussions concerning the preparation of the Registration
Statement and the U.S. Prospectus (in each case other than the documents
incorporated by reference therein) with certain officers or employees of the
Company and its auditors, and with representatives of and counsel to the
Underwriters. The limitations inherent in the independent verification of
factual matters and in the role of outside counsel are such, however, that such
counsel cannot and does not assume any responsibility for the accuracy,
completeness or fairness of any of the statements made in the Registration
Statement and the U.S. Prospectus, except as set forth in paragraph (viii) of
such counsel's opinion letter addressed to you, dated the date hereof.
Subject to the limitations set forth in the immediately preceding
paragraph, such counsel advises you that, on the basis of the information such
counsel gained in the course of performing the services referred to above, (i)
in such counsel's opinion, the Registration Statement and the U.S. Prospectus
(other than the financial statements, related schedules and other financial data
contained therein or omitted therefrom, as to which such counsel expresses no
view) appear on their face to be appropriately responsive in all material
respects to the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder; and (ii) no facts came to such
counsel's attention which gave them reason to believe that (a) the Registration
Statement (other than the financial statements, related schedules and other
financial data contained therein or omitted therefrom, as to which such counsel
has not been requested to comment) at the time the Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (b) the U.S. Prospectus (other than the
financial statements, related schedules and other financial data contained
therein or omitted therefrom, as to which such counsel has not been requested to
comment), as of its date or the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
A-2
29
EXHIBIT A-2
The final opinion in draft form should be attached as Exhibit A-2 at the time
this Agreement is executed.
Opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel for the Company to be
delivered pursuant to Section 5(e) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A-2 include any supplements
thereto at the Closing Date.
(i) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of Connecticut and in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions (other than the State of Connecticut) where
the failure to so qualify or to be in good standing would not, individually
or in the aggregate, result in a Material Adverse Change.
(ii) Each significant subsidiary of the Company (as defined in Rule
405 under the Securities Act) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the U.S. Prospectus and, to the best knowledge of such
counsel, is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change.
(iii) All of the issued and outstanding capital stock of each such
significant subsidiary of the Company has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or, to the best knowledge of such
counsel, any pending or threatened claim.
(iv) The authorized, issued and outstanding capital stock of the
Company (including the Common Stock) conform to the descriptions thereof
set forth in the U.S. Prospectus. All of the outstanding shares of Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable and, to the best of such counsel's knowledge, have been
issued in compliance with the registration and qualification requirements
of federal and state securities laws. The form of certificate used to
evidence the Common Stock is in due and proper form and complies with all
applicable requirements of the certificate of incorporation and by-laws of
the Company and the General Corporation Law of the State of Delaware. The
description of the Company's stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(v) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (i) by
operation of the certificate of incorporation or by-laws of the Company or
the General Corporation Law of the State of Delaware or (ii) to the best
knowledge of such counsel, otherwise.
(vi) To the best knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(vii) Each of Odyssey America Reinsurance Corporation, Odyssey
Reinsurance Corporation, ▇▇▇▇▇▇ Insurance Company and Lloyd's Syndicate
1218 (each an "Insurance Subsidiary", collectively the "Insurance
Subsidiaries") is duly licensed to conduct an insurance or a reinsurance
business, as the case may be, under the insurance statutes of each
jurisdiction in which the conduct of its business requires such licensing,
except for such jurisdictions in which the failure of the Insurance
Subsidiaries to be so licensed would not, individually or in the aggregate,
result in a Material Adverse Change (as defined in the Underwriting
Agreement). The Insurance Subsidiaries have made all required filings under
applicable insurance statutes in each jurisdiction where such filings are
required, except for such jurisdictions in which the failure to make such
filings would not, individually or in the aggregate, result
A-3
30
in a Material Adverse Change. Each of the Insurance Subsidiaries has all
other necessary authorizations, approvals, orders, consents, certificates,
permits, registrations and qualifications of and from all insurance
regulatory authorities necessary to conduct their respective businesses as
described in the U.S. Prospectus, except where the failure to have such
authorizations, approvals, orders, consents, certificates, permits,
registrations or qualifications would not, individually or in the
aggregate, result in a Material Adverse Change, and the Company and each of
its Insurance Subsidiaries has not received any notification from any
insurance regulatory authority to the effect that any additional
authorization, approval, order, consent, certificate, permit, registration
or qualification is needed to be obtained by the Company and each of its
Insurance Subsidiaries in any case where it could be reasonably expected
that (x) the Company and each of its Insurance Subsidiaries would be
required either to obtain such additional authorization, approval, order,
consent, certificate, permit, registration or qualification or to cease or
otherwise limit the writing of certain business and (y) the failure to
obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or the limiting of the
writing of such business would result in a Material Adverse Change; and no
insurance regulatory authority having jurisdiction over the Company or any
of its Insurance Subsidiaries has issued any order or decree impairing,
restricting or prohibiting (i) the payment of dividends by any of the
Insurance Subsidiaries to its parent or (ii) the continuation of the
business of the Company or any of the Insurance Subsidiaries in all
material respects as presently conducted.
(viii) The descriptions in the U.S. Prospectus of U.S. insurance
statutes and regulations are accurate in all material respects and fairly
summarize in all material respects the information required to be shown and
such counsel does not know of any U.S. insurance statutes or regulations
required to be described in the U.S. Prospectus that are not described as
required.
(ix) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder
(other than performance by the Company of its obligations under the
indemnification section of the Underwriting Agreement, as to which no
opinion need be rendered) (i) have been duly authorized by all necessary
corporate action on the part of the Company; (ii) will not result in any
violation of the provisions of the certificate of incorporation or by-laws
of the Company or any subsidiary, (iii) will not constitute a breach of, or
Default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to the best knowledge of such counsel, any other
material Existing Instrument; or (iv) to the best knowledge of such
counsel, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or
any subsidiary.
(x) Except as disclosed in the U.S. Prospectus under the caption
"Shares Eligible for Future Sale", to the best knowledge of such counsel,
there are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by the Underwriting
Agreement, except for such rights as have been duly waived.
(xi) To the best knowledge of such counsel, neither the Company nor
any subsidiary is in violation of its certificate of incorporation or
by-laws or any law, administrative regulation or administrative or court
decree applicable to the Company or any subsidiary or is in Default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any material Existing Instrument, except in each
such case for such violations or Defaults as would not, individually or in
the aggregate, result in a Material Adverse Change.
(xii) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits
thereto; and the descriptions thereof and references thereto are correct in
all material respects.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the laws of the State New York or the
federal law of the United States, to the extent they deem proper and specified
in such
A-4
31
opinion, upon the opinion (which shall be dated the First Closing Date or the
Second Closing Date, as the case may be, shall be satisfactory in form and
substance to the Underwriters, shall expressly state that the Underwriters may
rely on such opinion as if it were addressed to them and shall be furnished to
the Representative) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
In addition, such counsel shall state the following in a letter delivered
simultaneously with his opinion:
Such counsel has examined the Underwriting Agreement and the originals, or
copies identified to their satisfaction, of such corporate records of the
Company, certificates of public officials, officers of the Company and other
persons, and such other documents, agreements and instruments as such counsel
deemed necessary or appropriate as a basis for the opinions hereinafter
expressed. In their examinations, such counsel has assumed the genuineness of
all signatures, the authenticity of all documents submitted to them as originals
and the conformity with the originals of all documents submitted to them as
copies. In rendering the opinions expressed below, such counsel has relied as to
factual matters, to the extent such counsel deemed proper, upon the
representations and warranties of the Company contained in or made pursuant to
the Underwriting Agreement, certificates of officers of the Company and
certificates of public officials. Such counsel has also reviewed and
participated in discussions concerning the preparation of the Registration
Statement and the U.S. Prospectus (in each case other than the documents
incorporated by reference therein) with certain officers or employees of the
Company and its auditors, and with representatives of and counsel to the
Underwriters. The limitations inherent in the independent verification of
factual matters and in the role of outside counsel are such, however, that such
counsel cannot and does not assume any responsibility for the accuracy,
completeness or fairness of any of the statements made in the Registration
Statement and the U.S. Prospectus, except as set forth in paragraph (viii) of
such counsel's opinion letter addressed to you, dated the date hereof.
Subject to the limitations set forth in the immediately preceding
paragraph, such counsel advises you that, on the basis of the information such
counsel gained in the course of performing the services referred to above, (i)
in such counsel's opinion, the Registration Statement and the U.S. Prospectus
(other than the financial statements, related schedules and other financial data
contained therein or omitted therefrom, as to which such counsel expresses no
view) appear on their face to be appropriately responsive in all material
respects to the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder; and (ii) no facts came to such
counsel's attention which gave them reason to believe that (a) the Registration
Statement (other than the financial statements, related schedules and other
financial data contained therein or omitted therefrom, as to which such counsel
has not been requested to comment) at the time the Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (b) the U.S. Prospectus (other than the
financial statements, related schedules and other financial data contained
therein or omitted therefrom, as to which such counsel has not been requested to
comment), as of its date or the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
A-5
32
EXHIBIT B
The final opinion in draft form should be attached as Exhibit B at the time this
Agreement is executed.
Opinion of Canadian counsel for the Company to be delivered pursuant to
Section 5(e) of the Underwriting Agreement.
References to the Canadian Prospectus in this Exhibit B include any
supplements thereto at the Closing Date.
(i) The Company is eligible to use the PREP Procedures. A receipt has
been obtained from the Reviewing Authority on behalf of the Qualifying
Authorities in respect of each Canadian Preliminary Prospectus and the
Final PREP Prospectus.
(ii) At the time the Registration Statement became effective under
the 1933 Act and at all times subsequent thereto up to and including the
First Closing Date and if applicable, the Second Closing Date, each
Canadian Preliminary Prospectus, the Final PREP Prospectus, the
Supplemental PREP Prospectus and the Canadian Prospectus (other than the
financial statements, notes and schedules thereto and other financial or
accounting data included therein or omitted therefrom as to which we
express no opinion) as of their respective dates, comply as to form in all
material respects with the requirements of the applicable securities
legislation of the Qualifying Provinces as interpreted and applied by the
Reviewing Authority (including the PREP Procedures).
(iii) The Common Shares have been approved for listing on The Toronto
Stock Exchange.
(iv) The form of certificate used to evidence the Common Shares
complies in all material respects with any applicable requirements of The
Toronto Stock Exchange.
(v) To the best knowledge of such counsel, no order having the effect
of ceasing or suspending the distribution of the Common Shares has been
issued by any Qualifying Authority and no proceedings for that purpose have
been instituted or are pending or threatened.
(vi) The statements in the Canadian Prospectus under the captions
"Shares Eligible for Future Sale", "Certain Canadian Federal Income Tax
Considerations", "Eligibility for Investment", "Underwriting" and
"Purchasers' Statutory Rights", insofar as such statements constitute
matters of law, summaries of legal matters, or legal conclusions, has been
reviewed by such counsel and fairly present and summarize, in all material
respects, the matters referred to therein.
(vii) No consent, approval, authorization or other order of, or
registration or filing with, any court in Canada or other governmental
authority or agency of Canada or any province, is required for the
Company's execution, delivery and performance of the Underwriting Agreement
and consummation of the transactions contemplated thereby and by the
Canadian Prospectus, except as required under applicable securities
legislation and policies in each of the Qualifying Provinces.
(viii) All laws of the Province of Quebec relating to the use of the
French language will have been complied with in connection with the sale of
the Common Shares to purchasers in the Province of Quebec provided that
such purchasers receive copies of the Supplemental PREP Prospectus in the
French language alone, in the English and French languages simultaneously
or, in the case of purchasers having specifically so requested in writing,
in the English language alone and that such purchasers receive forms of
order and confirmation drawn solely in the French language or in a
bilingual format or in the English language alone in the case of purchasers
having specifically so requested in writing (on the assumption that no
documents other than the Supplemental PREP Prospectus and the forms of
order and confirmation constitute the contract for purchase of the Common
Shares).
(ix) All necessary documents and proceedings have been filed and
taken and all other legal requirements have been fulfilled under the laws
of the Qualifying Provinces to qualify the Common Shares to be offered and
sold to the public in the each of the Qualifying Provinces by or through
registrants, investment dealers or brokers registered under applicable
legislation of such provinces of Canada who have complied with relevant
provisions of such legislation.
B-1
33
EXHIBIT C
[Date]
Banc of America Securities LLC
CIBC World Markets Corp.
As Representatives of the Several Underwriters
c/o Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and
CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: Odyssey Re Holdings Corp. (the "Company")
Ladies & Gentlemen:
The undersigned is an officer of the Company or an owner of record or
beneficially of certain shares of common stock of the Company (the "Common
Stock") or securities convertible into or exchangeable or exercisable for Common
Stock. The Company proposes to carry out a public offering of Common Stock (the
"Offering") for which you will act as the representatives of the underwriters.
The undersigned recognizes that the Offering will be of benefit to the
undersigned and will benefit the Company. The undersigned acknowledges that you
and the other underwriters are relying on the representations and agreements of
the undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Banc of America
Securities LLC and CIBC World Markets Corp. (which consent may be withheld in
their sole discretion), (i) directly or indirectly, sell, offer, contract or
grant any option to sell (including without limitation any short sale), pledge,
transfer, establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, or otherwise dispose of any
shares of Common Stock, options or warrants to acquire shares of Common Stock,
or securities exchangeable or exercisable for or convertible into shares of
Common Stock currently or hereafter owned either of record or beneficially (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by
the undersigned, or (ii) enter into any swap or other arrangement that transfers
all or a portion of the economic consequences associated with the ownership of
any Common Stock, or, in each case, publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the date hereof
and continuing through the close of trading on the date 180 days after the date
of the Prospectus (as defined in the Underwriting Agreement). The undersigned
also agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of shares of Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock held by the undersigned except in compliance with the foregoing
restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
currently or hereafter owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering.
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34
This agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and assigns of the
undersigned.
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Printed Name of Holder
By:
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Signature
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Printed Name of Person Signing
(and indicate capacity of person signing if signing as
custodian, trustee, or on behalf of an entity)
C-2