Exhibit 1.1
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ENDURANCE SPECIALTY HOLDINGS LTD.
8,000,000 Ordinary Shares
PURCHASE AGREEMENT
Dated: March , 2004
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Table of Contents
SECTION 1. Representations and Warranties..................................................................2
(a) Representations and Warranties by the Company...................................................2
(i) Compliance with Registration Requirements..............................................2
(ii) Independent Accountants................................................................3
(iii) Financial Statements...................................................................3
(iv) No Material Adverse Change in Business.................................................4
(v) Good Standing of the Company...........................................................4
(vi) Good Standing of Subsidiaries..........................................................4
(vii) Capitalization.........................................................................4
(viii) Authorization and Execution of Agreement...............................................5
(ix) Authorization and Description of Securities............................................5
(x) Absence of Defaults and Conflicts......................................................5
(xi) Financial Assistance...................................................................6
(xii) Absence of Labor Dispute...............................................................6
(xiii) Absence of Proceedings.................................................................6
(xiv) Accuracy of Exhibits...................................................................6
(xv) Possession of Intellectual Property....................................................6
(xvi) Absence of Further Requirements........................................................6
(xvii) Licenses and Permits...................................................................7
(xviii) Compliance with Applicable Laws........................................................7
(xix) Tax Liabilities and Reserves...........................................................7
(xx) Internal Controls......................................................................7
(xxi) Property and Leases....................................................................8
(xxii) Investment Company Act.................................................................8
(xxiii) Stamp Duty, Excise Tax, Etc............................................................8
(xxiv) Currency Exchange Control..............................................................8
(xxv) Registration Rights....................................................................8
(xxvi) No Ratings Downgrade...................................................................8
(xxvii) Listing Approval.......................................................................8
(b) Representations and Warranties by the Selling Shareholders......................................8
(i) Accurate Disclosure....................................................................8
(ii) Authorization of this Agreement........................................................9
(iii) Authorization of Custody Agreement and Power of Attorney...............................9
(iv) Noncontravention.......................................................................9
(v) Certificates Suitable for Transfer.....................................................9
(vi) Valid Title...........................................................................10
(vii) Delivery of Securities................................................................10
(viii) Absence of Manipulation...............................................................10
(ix) Absence of Further Requirements.......................................................10
(x) No Association with NASD..............................................................10
(c) Officer's Certificates.........................................................................11
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................11
(a) Initial Securities.............................................................................11
(b) Option Securities..............................................................................11
(c) Payment........................................................................................11
(d) Denominations; Registration....................................................................13
(e) U.K. Selling Restrictions......................................................................13
i
SECTION 3. Covenants of the Company.......................................................................13
(a) Compliance with Securities Regulations and Commission Requests.................................13
(b) Filing of Amendments...........................................................................14
(c) Delivery of Registration Statements............................................................14
(d) Delivery of Prospectus.........................................................................14
(e) Continued Compliance with Securities Laws......................................................14
(f) Blue Sky Qualifications........................................................................14
(g) Rule 158.......................................................................................15
(h) Restriction on Sale of Securities..............................................................15
(i) Reporting Requirements.........................................................................15
SECTION 4. Payment of Expenses............................................................................15
(a) Expenses.......................................................................................15
(b) Expenses of Selling Shareholders...............................................................16
(c) Allocation of Expenses.........................................................................16
(d) Termination of Agreement.......................................................................16
SECTION 5. Conditions of Underwriters' Obligations........................................................16
(a) Effectiveness of Registration Statement........................................................16
(b) Opinion of Counsel for Company.................................................................16
(c) Opinion of Bermuda Counsel for Company.........................................................17
(d) Opinion of United Kingdom Counsel for Company..................................................17
(e) Opinion of Counsel for Selling Shareholders....................................................17
(f) Opinion of Counsels for Underwriters...........................................................17
(g) Officers' Certificate..........................................................................17
(h) Certificate of Selling Shareholders............................................................17
(i) Accountant's Comfort Letter....................................................................18
(j) Bring-down Comfort Letter......................................................................18
(k) No Objection...................................................................................18
(l) Lock-up Agreements.............................................................................18
(m) Delivery of Prospectus.........................................................................18
(n) Conditions to Purchase of Option Securities....................................................18
(i) Officers' Certificate.................................................................18
(ii) Certificate of Selling Shareholders...................................................18
(iii) Opinion of Counsel for Company........................................................18
(iv) Opinion of Counsel for Selling Shareholders...........................................19
(v) Opinion of Counsel for Underwriters...................................................19
(vi) Bring-down Comfort Letter.............................................................19
(o) Additional Documents...........................................................................19
(p) Termination of Agreement.......................................................................19
SECTION 6. Indemnification................................................................................19
(a) Indemnification of Underwriters................................................................19
(b) Indemnification of Company, Directors and Officers and Selling Shareholders....................20
(c) Actions against Parties; Notification..........................................................20
(d) Control Persons................................................................................21
ii
SECTION 7. Contribution...................................................................................21
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................22
SECTION 9. Termination of Agreement.......................................................................22
(a) Termination; General...........................................................................22
(b) Liabilities....................................................................................23
SECTION 10. Default by One or More of the Underwriters.....................................................23
SECTION 11. Default by Selling Shareholders................................................................23
SECTION 12. Notices........................................................................................24
SECTION 13. Parties........................................................................................24
SECTION 14. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE...........................................24
SECTION 15. Waiver of Immunity.............................................................................25
SECTION 16. Effect of Headings.............................................................................25
SCHEDULES
Schedule A - List of Selling Shareholders..........................................................Sch A-1
Schedule B - List of Underwriters..................................................................Sch B-1
Schedule C - Pricing Information...................................................................Sch C-1
Schedule D - List of Persons subject to Lock-up....................................................Sch D-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Company's Outside Counsel...........................................A-1-1
Exhibit A-2 - Form of Tax Opinion of Company's Outside Counsel.......................................A-2-1
Exhibit A-3 - Form of Opinion of Company's General Counsel...........................................A-3-1
Exhibit B - Form of Opinion of Company's Bermuda Counsel...............................................B-1
Exhibit C - Form of Opinion of Company's United Kingdom Counsel........................................C-1
Exhibit D - Form of Opinion of Selling Shareholders....................................................D-1
Exhibit E - Form of Lock-up Letter.....................................................................E-1
iii
ENDURANCE SPECIALTY HOLDINGS LTD.
(a Bermuda holding company)
8,000,000 Ordinary Shares
(Par Value $1.00 Per Share)
PURCHASE AGREEMENT
March , 2004
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Credit Suisse First Boston LLC
Deutsche Bank Securities Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Wachovia Capital Markets, LLC
as Representatives of the several Underwriters
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
North Tower - ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Certain shareholders named in Schedule A hereto (each, a "Selling
Shareholder" and collectively, the "Selling Shareholders") of Endurance
Specialty Holdings Ltd., an exempted company incorporated in Bermuda as a
holding company (the "Company"), propose, subject to the terms and conditions
stated herein, to sell to the Underwriters named in Schedule B hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. ("Goldman") and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") are acting as lead representatives (in such capacity, the
"Lead Representatives"), the respective numbers of ordinary shares, par value
U.S. $1.00 per share, of the Company ("Ordinary Shares") set forth in said
Schedule B and, at the election of the Underwriters, to sell to the Underwriters
all or any part of 1,200,000 additional Ordinary Shares to cover
over-allotments, if any, pursuant to Section 2(b) hereof. The aforesaid
8,000,000 Ordinary Shares (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the 1,200,000 Ordinary Shares subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities."
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Lead Representatives deem advisable after this Agreement has been executed and
delivered.
1
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-112258) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus. Promptly after
execution and delivery of this Agreement, the Company will prepare and file a
prospectus with the Registrar of Companies in Bermuda pursuant to the laws of
Bermuda, and either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). The information included in any prospectus used in
connection with the offering and sale of the Securities (the "Form of
Prospectus") or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of Prospectus used before such registration
statement became effective, and any prospectus that omitted, as applicable, the
Rule 430A Information or the Rule 434 Information, that was used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus." Such registration statement, including
the exhibits thereto and schedules thereto at the time it became effective and
including the Rule 430A Information and the Rule 434 Information, as applicable,
is herein called the "Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final Form of Prospectus in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary Prospectus dated 2004 together with the applicable Term Sheet and
all references in this Agreement to the date of such Prospectus shall mean the
date of the applicable Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus, or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each
Date of Delivery (if any) referred to in Section 2(b), hereof and
agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission.
2
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an 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. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any amendments or supplements thereto were issued and at
the Closing Time (and, if any Option Securities are purchased, at the
Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will 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. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and
the Prospectus shall not be "materially different", as such term is
used in Rule 434, from the prospectus included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Lead Representatives
expressly for use in the Registration Statement or the Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The consolidated financial
statements included in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly, in all
material respects, the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; except as
otherwise disclosed in the Registration Statement and Prospectus, said
financial statements have been prepared in conformity with United
States generally accepted accounting principles ("U.S. GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly, in all
material respects, in accordance with U.S. GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus and
Registration Statement present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The non-U.S. GAAP ratios and other statistical
data contained in the Registration Statement and the Prospectus were
derived from (A) statutory financial information of Endurance Specialty
Insurance Ltd. ("Endurance Bermuda") prepared in conformity with the
accounting practices required or permitted by applicable insurance laws
(including laws that relate to companies that control insurance
companies) and the rules, regulations and interpretations of the
insurance regulatory authorities thereunder (collectively, "Insurance
Laws") of Bermuda, statutory financial information of Endurance
Reinsurance Corporation of America ("Endurance U.S.") prepared in
conformity with the accounting practices required or permitted by
applicable Insurance Laws of the United States of America and statutory
financial information of Endurance Worldwide Insurance Limited
("Endurance U.K.") prepared in conformity with the accounting practices
required or permitted by applicable Insurance Laws of the United
Kingdom and (B) the financial statements of the Company and its
consolidated subsidiaries prepared in conformity with U.S. GAAP, and
present fairly the information purported to be shown.
3
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its share
capital.
(v) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as an exempted company in good
standing under the laws of Bermuda and has the necessary 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 this Agreement; and the Company is
duly qualified as a foreign company or corporation to transact business
and is in good standing 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 where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each of Endurance Bermuda,
Endurance U.K. and Endurance U.S. (each, a "Designated Subsidiary" and
collectively, the "Designated Subsidiaries") has been duly incorporated
or organized and is validly existing as a company or corporation in
good standing under the laws of the jurisdiction of its incorporation
or organization and has the necessary corporate power to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and 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 where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding share capital
or capital stock of each such Designated Subsidiary 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, claim or
equity; none of the outstanding shares of share capital or capital
stock of any Designated Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Designated
Subsidiary. Except for Endurance Worldwide Holdings Limited ("Endurance
U.K. Holdings"), Endurance U.S. Holdings Corp. ("Endurance U.S.
Holdings") and Endurance Services Ltd. ("Endurance Services"), each of
which are immaterial and are not "significant subsidiaries" of the
Company as such term is defined in Rule 1-02 of Regulation S-X of the
rules and regulations of the Commission under the 1933 Act, the
Designated Subsidiaries are the only subsidiaries of the Company. Each
of Endurance U.K. Holdings, Endurance U.S. Holdings and Endurance
Services has been duly organized and is validly existing as a company
or corporation in good standing under the laws of the jurisdiction of
its organization or incorporation.
4
(vii) Capitalization. The authorized, issued and outstanding
share capital of the Company as of December 31, 2003 conforms in all
material respects to the description thereof in the Prospectus. Based
solely on the Certified Registers of Members: (A) all of the currently
issued and outstanding shares of share capital of both the Company
(including shares to be sold by Selling Shareholders) and the
Designated Subsidiaries have been duly and validly authorized and
issued and are fully paid and non-assessable (which term when used
herein shall mean that no further sums are required to be paid by the
holders thereof in connection with the issue of such shares)
(collectively, the "Outstanding Shares"); (B) all of the currently
issued and outstanding shares of the subsidiaries are held directly or
indirectly by the Company and are free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; and (C)
none of the Outstanding Shares were issued in violation of the
preemptive or other similar rights of any member of the Company or the
Designated Subsidiaries. Except as set forth in the Prospectus, there
are no outstanding options, warrants or other rights requiring the
issuance of, and there are no commitments, plans or arrangements to
issue, any shares of share capital of the Company or any of its
subsidiaries or any security convertible into or exchangeable or
exercisable for any shares of share capital of the Company or any of it
subsidiaries. The form of certificates for the Securities conforms to
the requirements of the laws of Bermuda and the New York Stock Exchange
("NYSE").
(viii) Authorization and Execution of Agreement. This
Agreement has been duly authorized, executed and delivered by the
Company.
(ix) Authorization and Description of Securities. The
Securities are validly issued, fully paid and non-assessable; the
Ordinary Shares conform, in all material respects, to all statements
relating thereto contained in the Prospectus and such description
conforms, in all material respects, to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its Designated Subsidiaries is in violation of its charter,
memorandum of association, bye-laws, by-laws or similar incorporation
or organizational documents or in violation or default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
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 subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
under the material Agreements and Instruments that would not result in
a Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
in this Agreement, and in the Registration Statement and compliance by
the Company with its obligations under this Agreement do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
charter, memorandum of association, bye-laws, by-laws or similar
organizational documents of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or
any of their assets, properties or operations (except for such
violations that would not result in a Material Adverse Effect). As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness
that is material to the operations or financial results of the Company
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
5
(xi) Financial Assistance. On the date hereof and upon the
issuance of the Securities, the Company is and will be in compliance
with Section 39 and/or entitled to one or more of the exclusions
therefrom set forth in Section 39A of the Companies Act 1981 of Bermuda
(the "Companies Act").
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Designated Subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or any Designated Subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened or against the Company or any
subsidiary or the properties or assets thereof, which is required to be
disclosed in the Registration Statement (other than as disclosed
therein), or which would reasonably be expected to result in a Material
Adverse Effect, or which would reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in
this Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of
which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, would not reasonably be
expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described or filed as required.
(xv) Possession of Intellectual Property. The Company and the
Designated Subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them except where the failure
to own or possess, or to be able to acquire such Intellectual Property,
would not have a Material Adverse Effect, and neither the Company nor
any of the Designated Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
Designated Subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
6
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
exemption, qualification or decree of, any court or governmental
authority or agency or any sub-division thereof is necessary or
required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities under this Agreement or the consummation of the transactions
contemplated by this Agreement, except (i) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and state securities or blue sky laws, (ii) such as have
been obtained from the Bermuda Monetary Authority and (iii) the
Prospectus will be filed at the Registrar of Companies in Bermuda
pursuant to the laws of Bermuda.
(xvii) Licenses and Permits. Each of the Company and its
subsidiaries possesses all consents, authorizations, approvals, orders,
licenses, certificates, or permits issued by any regulatory agencies or
bodies (collectively, "Permits") which are necessary to conduct the
business now conducted by it as described in the Prospectus, except
where the failure to possess such Permits, individually or in the
aggregate, would not have a Material Adverse Effect; all of such
Permits are valid and in full force and effect, except where the
invalidity of such Permits or the failure to be in full force and
effect, individually or in the aggregate, would not have a Material
Adverse Effect. There is no pending, or to the Company's knowledge,
threatened action, suit, proceeding or investigation against or
involving the Company and its subsidiaries (and the Company knows of no
reasonable basis for any such action, suit, proceeding or
investigation) that individually or in the aggregate would reasonably
be expected to lead to the revocation, modification, termination,
suspension or any other material impairment of the rights of the holder
of any such Permit which revocation, modification, termination,
suspension or other material impairment would have a Material Adverse
Effect. Except as otherwise described in the Prospectus, no insurance
regulatory authority has issued to the Company or any Designated
Subsidiary any order impairing, restricting or prohibiting (A) the
payment of dividends by the Company or any of its Designated
Subsidiaries, (B) the making of a distribution on any Designated
Subsidiary's capital stock, (C) the repayment to the Company of any
loans or advances to any Designated Subsidiaries from the Company or
(D) the transfer of any Designated Subsidiaries property or assets to
the Company or any other subsidiary of the Company.
(xviii) Compliance with Applicable Laws. Neither the Company
nor any of its Designated Subsidiaries is in violation or default of
any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency or other governmental
body having jurisdiction over the Company or any such Designated
Subsidiary or any of its properties, as applicable, except for such
violations or defaults which, individually or in the aggregate, would
not have a Material Adverse Effect.
(xix) Tax Liabilities and Reserves. Any tax returns required
to be filed by the Company or any of its subsidiaries in any
jurisdiction have been filed and any taxes, including any withholding
taxes, excise taxes, penalties and interest, assessments and fees and
other charges due or claimed to be due from such entities have been
paid, other than any of those being contested in good faith and for
which adequate reserves have been provided or any of those currently
payable without penalty or interest, except to the extent that the
failure to so file or pay would not result in a Material Adverse
Effect.
(xx) Internal Controls. The Company and the Designated
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general, or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
7
(xxi) Property and Leases. Neither the Company nor any of its
Designated Subsidiaries hold title to any real property. All of the
leases and subleases under which the Company or any of its Designated
Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any Designated Subsidiary
has any notice of any claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such Designated Subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease, except where the failure to have such leases in full
force and effect or the failure to have any such notice of any such
claim would not, individually or in the aggregate, have a Material
Adverse Effect.
(xxii) Investment Company Act. The Company is not and, solely
after giving effect to the offer and sale of the Securities and the
application of the proceeds thereof as described under the caption "Use
of Proceeds" in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(xxiii) Stamp Duty, Excise Tax, Etc. None of the Underwriters
or any subsequent purchasers of the Securities (other than purchasers
resident in Bermuda for Bermuda exchange control purposes) is subject
to any stamp duty, transfer, excise or similar tax imposed in Bermuda
in connection with the issuance, offering or sale of the Securities to
the Underwriters or to any subsequent purchasers.
(xxiv) Currency Exchange Control. There are no currency
exchange control laws or withholding taxes, in each case of Bermuda,
that would be applicable to the payment of dividends on the Securities
by the Company (other than as may apply to residents of Bermuda for
Bermuda exchange control purposes).
(xxv) Registration Rights. Except as disclosed in the
Prospectus and the Registration Statement, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxvi) No Ratings Downgrade. The Company has no knowledge of
any threatened or pending downgrading of any of its or its
subsidiaries' financial strength rating by Standard & Poor's Rating
Services and A.M. Best Company Inc., the only two "nationally
recognized statistical rating organizations," as such term is defined
for purposes of Rule 463(g)(2) under the 1933 Act which currently has
publicly released a rating of the financial strength of the Company or
any of its subsidiaries.
(xxvii) Listing Approval. The Securities have been approved
for listing on the NYSE.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder represents and warrants, severally and not jointly and
solely with respect to itself, to each Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
8
(i) Accurate Disclosure. (A) The Registration Statement, when
it became effective, did not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the representations and
warranties set forth in this Section 1(b)(i) are limited to statements
or omissions made in reliance on information furnished in writing by or
on behalf of such Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto), any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto);
it is understood and agreed that the only written information furnished
to the Company by each Selling Shareholder expressly for use in the
Registration Statement, any preliminary prospectus and the Prospectus
is the information relating to such Selling Shareholder set forth under
the caption "Principal and Selling Shareholders" therein (but not the
percentage set forth therein). Such Selling Shareholder is not prompted
to sell the Securities to be sold by such Selling Shareholder hereunder
by any information concerning the Company or any subsidiary of the
Company which is not set forth in the Prospectus.
(ii) Authorization of this Agreement. This Agreement has been
duly authorized, executed and delivered by or on behalf of such Selling
Shareholder.
(iii) Authorization of Custody Agreement and Power of
Attorney. Each of the Custody Agreement, in the form heretofore
furnished to the Lead Representatives (the "Custody Agreement") and the
Power of Attorney, in the form heretofore furnished to the Lead
Representatives (the "Power of Attorney") has been duly authorized,
executed and delivered by such Selling Shareholder and is the valid and
binding agreement of such Selling Shareholder.
(iv) Noncontravention. The execution and delivery of this
Agreement, the Custody Agreement and the Power of Attorney and the sale
and delivery of the Securities to be sold by such Selling Shareholder
and the consummation of the transactions contemplated herein and
compliance by such Selling Shareholder with its obligations hereunder
(A) do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of or
default under, or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder or any property or assets of such Selling
Shareholder pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, (B) nor will
such action result in any violation of the provisions of the charter or
by-laws or other organizational instrument of such Selling Shareholder
or any applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over such Selling
Shareholder or any of its properties, except, in the case of clause
(A), as would not, individually or in the aggregate, result in a
Material Adverse Effect or have a material adverse effect on the
ability of such Selling Shareholder to consummate the offering of the
Securities or otherwise perform its obligations under this Agreement,
the Custody Agreement or the Power of Attorney.
9
(v) Certificates Suitable for Transfer. The Securities to be
sold by such Selling Shareholder pursuant to this Agreement will, at
the Closing Time and as of each Date of Delivery (if any), be
certificated securities in registered form and will not be held in any
securities account or by or through any securities intermediary within
the meaning of the Uniform Commercial Code as in effect in the State of
New York (the "UCC"). Certificates for all of the Securities to be sold
by such Selling Shareholder pursuant to this Agreement, in suitable
form for transfer by delivery or accompanied by duly executed and
effective instruments of transfer or assignment indorsed to the
Underwriters or in blank with signatures guaranteed, will, prior to the
Closing Time, have been placed in custody with Equiserve Trust Company,
N.A. (the "Custodian") with irrevocable conditional instructions to
deliver such Securities to the Underwriters pursuant to this Agreement.
(vi) Valid Title. Such Selling Shareholder has, and at the
Closing Time and as of any Date of Delivery (if any) will have, valid
title to the Securities to be sold by it free and clear of all security
interests, claims, liens, equities or other encumbrances and the
requisite corporate power and authority, and all authorization and
approval required by law, except such as may be required under the 1933
Act or the 1933 Act Regulations, state securities laws or required by
the Bermuda Monetary Authority, to enter into this Agreement and the
Custody Agreement and to sell, transfer and deliver the Securities to
be sold by such Selling Shareholder.
(vii) Delivery of Securities. Upon payment for the Securities
to be sold by such Selling Shareholder pursuant to this Agreement,
delivery of such Securities, as directed by the Underwriters, to Cede &
Co. ("Cede") or such other nominee as may be designated by the
Depository Trust Company ("DTC"), registration of such Securities in
the name of Cede or such other nominee and the crediting of such Shares
on the books of DTC to securities accounts of the Underwriters
(assuming that neither DTC nor any such Underwriter has notice of any
adverse claim (within the meaning of Section 8-105 of the UCC to such
Securities), (A) DTC shall be a "protected purchaser" of such Shares
within the meaning of Section 8-303 of the UCC, (B) under Section 8-501
of the UCC, the Underwriters will acquire a valid security entitlement
in respect of such Securities and (C) no action based on any "adverse
claim", within the meaning of Section 8-102 of the UCC, to such
Securities may be asserted against the Underwriters with respect to
such security entitlement; for purposes of this representation, such
Selling Shareholder may assume that when such payment, delivery and
crediting occur, (x) such Securities will have been registered in the
name of Cede or another nominee designated by DTC, in each case on the
Company's share registry in accordance with its certificate of
incorporation, bylaws and applicable law, (y) DTC will be registered as
a "clearing corporation" within the meaning of Section 8-102 of the UCC
and (z) appropriate entries to the accounts of the several Underwriters
on the records of DTC will have been made pursuant to the UCC.
(viii) Absence of Manipulation. Such Selling Shareholder has
not taken, and will not take, directly or indirectly, any action which
is designed to or which has constituted or which would be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(ix) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Shareholder of its obligations hereunder, or in connection with the
sale and delivery of the Securities to be sold by such Selling
Shareholder hereunder or the consummation of the transactions
contemplated by this Agreement, except (A) such as may have previously
been made or obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws, and (B) such as have
been obtained from the Bermuda Monetary Authority.
(x) No Association with NASD. Other than as disclosed to the
Representatives in writing, neither such Selling Shareholder nor any of
its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or is a person associated with (within the meaning of
Article I (dd) of the By-laws of the National Association of Securities
Dealers, Inc. (the "NASD")), any member firm of the NASD.
10
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Lead Representatives or
to counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each Selling Shareholder agrees to sell to each Underwriter, severally
and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from such Selling Shareholder, at the price per share set forth in
Schedule C, that proportion of the number of Initial Securities set forth in
Schedule A opposite the name of such Selling Shareholder which the number of
Initial Securities set forth in Schedule B opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Lead
Representatives in their discretion shall make, to eliminate any sales or
purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholders hereby grant an option to the Underwriters,
severally and not jointly, to purchase up to an additional 1,200,000 Ordinary
Shares in the amounts as set forth in Schedule A at the price per share set
forth in Schedule C, less an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Securities upon
notice by the Lead Representatives to the Company and each Selling Shareholder
setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery for the
Option Securities (a "Date of Delivery") shall be determined by the Lead
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule B
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Lead Representatives
in their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., or at such other place as shall be
agreed upon by the Lead Representatives and the Company, at 9:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time)
on any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Lead
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Lead
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Lead Representatives to the Company.
11
Payment shall be made to the Custodian by wire transfer of immediately
available funds to a bank account designated by the Custodian, against delivery
to the Lead Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Lead Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Either or both of the Lead Representatives, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
Each Selling Shareholder agrees that, during the period beginning from
the date of the final Prospectus and continuing to and including the date 90
days after the date of such Prospectus (the "Lock-Up Period"), it will not,
without the prior written consent of Goldman and ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or
indirectly, offer, sell, contract to sell, pledge, grant any option to purchase,
make any short sale or otherwise dispose of any Ordinary Shares, or any options,
rights or warrants to purchase any Ordinary Shares, or any securities
convertible into, exchangeable or exercisable for or that represent the right to
receive Ordinary Shares, whether now owned or hereinafter acquired by the
Selling Shareholder (including holding as a custodian) or with respect to which
the Selling Shareholder has or hereafter acquires beneficial ownership within
the rules and regulations of the Commission (the "Lock-Up Agreement").
The foregoing restrictions are expressly agreed to preclude the Selling
Shareholder from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Selling Shareholder's Ordinary Shares even if such Ordinary
Shares would be disposed of by someone other than the Selling Shareholder. Such
prohibited hedging or other transactions would include without limitation any
short sale or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any of the Selling
Shareholder's Ordinary Shares or with respect to any security that includes,
relates to, or derives any significant part of its value from such Ordinary
Shares.
Notwithstanding the foregoing: (i) if the Selling Shareholder is a
partnership, the partnership may transfer any Ordinary Shares (or any securities
convertible into, exercisable for, or exchangeable for Ordinary Shares) to a
partner of such partnership; (ii) if the Selling Shareholder is an individual,
he or she may transfer Ordinary Shares (or any securities convertible into,
exercisable for, or exchangeable for Ordinary Shares) by gift, will, or
intestate succession to his or her immediate family or to a trust the
beneficiaries of which are exclusively the Selling Shareholder and/or a member
or members of his or her immediate family (for purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor); and (iii) the Selling Shareholder may transfer any
Ordinary Shares (or any securities convertible into, exercisable for, or
exchangeable for Ordinary Shares) to an affiliate thereof (as such term is
defined in Rule 144(a) of the regulations under the Securities Act of 1933);
provided, however, that in any such case it shall be a condition to the transfer
that (a) each transferee execute an agreement stating that the transferee is
receiving and holding the Ordinary Shares (or any securities convertible into,
exercisable for, or exchangeable for Ordinary Shares) subject to the provisions
of the Lock-Up Agreement, and there shall be no further transfer of such
Ordinary Shares (or any securities convertible into, exercisable for, or
exchangeable for Ordinary Shares) except in accordance with the Lock-Up
Agreement, (b) each transferee certifies in writing to the Representatives that
such transferee is in compliance with the terms of the Lock-Up Agreement as if
such transferee had been bound by the Lock-Up Agreement from the original date
of the Lock-Up Agreement and (c) no filing by any party (transferee or
transferor) under Section 16(a) of or Regulation 13D-G under the 1934 Act shall
be required or shall be made voluntarily in connection with such transfer or
distribution.
12
The Selling Shareholder also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the Selling Shareholder's Ordinary Shares except in compliance
with the foregoing restrictions.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Lead Representatives may request in writing at
least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Lead Representatives in The City of New York not later than
10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
(e) U.K. Selling Restrictions. Each Underwriter represents, warrants
and agrees that: (i) it has not offered or sold and, prior to the expiry of a
period of six months from the closing of the offering of the Ordinary Shares,
will not offer or sell any Ordinary Shares to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has only communicated
or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the issue or sale of any
Ordinary Shares in circumstances in which section 21(1) of the FSMA does not
apply to the Company; and (iii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Ordinary Shares in, from having an effect in or otherwise
involving the United Kingdom.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Lead Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. 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.
13
(b) Filing of Amendments. The Company will give the Lead
Representatives notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus,
will furnish the Lead Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Lead Representatives
or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Lead Representatives,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will,
prior to 5:00 p.m. on the business day next succeeding the date of this
Agreement and from time to time, furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or counsel for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of such counsel, at any such time to amend the Registration Statement or amend
or supplement any Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
14
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Lead Representatives may reasonably
designate and to maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign company or corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration Statement and
any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its security
holders as soon as practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(h) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of the Lead Representatives, (i) directly or indirectly, offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any Ordinary Shares, or any options, rights or warrants to
purchase any Ordinary Shares, or any securities convertible into, exchangeable
or exercisable for or that represent the right to receive Ordinary Shares, or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) engage in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Ordinary Shares, whether any such hedging or transaction
described in clause (i) or (ii) above is to be settled by delivery of Ordinary
Shares or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to the Securities to be sold hereunder. The Company may,
however, grant options to purchase Ordinary Shares and restricted share units,
and issue Ordinary Shares upon the conversion of outstanding Class A shares, par
value U.S. $1.00 per share, of the Company ("Class A Shares"), the exercise of
warrants for Ordinary Shares or Class A Shares, or the exercise of outstanding
options or restricted share units under the existing stock option plan (it being
understood that any Ordinary Shares so issued shall be subject to the terms and
restrictions of the Lock-up Agreement as attached hereto as Exhibit E).
(i) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
15
SECTION 4. Payment of Expenses. (a) (a) Expenses. The Company will pay
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any share or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto (such fees and disbursements of counsel not to exceed $10,000), (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the cost of
printing certificates representing the Securities, (ix) the fees and expenses of
any transfer agent or registrar for the Securities, (x) the fees and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Securities, including,
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and a proportional share of the cost of any aircraft chartered in
connection with the road show, (xi) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities,
provided, however, except as provided in this Section and Sections 6 and 9(b)
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, stock transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
(b) Expenses of Selling Shareholders. The Selling Shareholders will pay
all expenses incident to the performance of their obligations hereunder, and the
consummation of the transactions contemplated by, this Agreement which are not
otherwise specifically provided for in this Section, including (i) any stamp
duties, capital duties and stock transfer taxes, if any, payable upon the sale
of the Securities to the Underwriters and (ii) the fees and disbursements of
their counsel and other advisors.
(c) Allocation of Expenses. The provisions of this Section shall not
supersede or otherwise affect any agreement between the Company and any Selling
Shareholder with respect to the sharing of such costs and expenses.
(d) Termination of Agreement. If this Agreement is terminated by the
Lead Representatives in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and each Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or by or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
16
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Representatives shall have received (i) the favorable opinion, dated as of
Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, outside counsel for
the Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit A-1 and Exhibit A-2
hereto and (ii) the favorable opinion, dated as of the Closing Time, of ▇▇▇▇ ▇.
Del Col, General Counsel of the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit A-3.
(c) Opinion of Bermuda Counsel for Company. At Closing Time, the Lead
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special Bermuda counsel for the Company, in
form and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit B hereto.
(d) Opinion of United Kingdom Counsel for Company. At Closing Time, the
Lead Representatives shall have received the favorable opinion, dated as of
Closing Time, of Ashurst, special United Kingdom counsel for the Company, in
form and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit C hereto.
(e) Opinion of Counsel for Selling Shareholders. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of counsel for each of the Selling Shareholders, in form and substance
reasonably satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit D hereto.
(f) Opinion of Counsels for Underwriters. At Closing Time, the Lead
Representatives shall have received the favorable opinion, dated as of Closing
Time, of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., U.S. counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters with respect to the matters set forth in clauses (h)
and (k) and the penultimate paragraph of Exhibit A-1 hereto. In giving such
opinion LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P. may limit its opinion to the law
of the State of New York and the federal law of the United States and the
General Corporation Law of the State of Delaware. Such counsels for the
Underwriters may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.
(g) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Lead Representatives shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company, dated as
of Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to the Company's knowledge, threatened by the
Commission.
(h) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of a duly authorized officer
of each Selling Shareholder, dated as of Closing Time, to the effect that (i)
the representations and warranties of such Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) such Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
17
(i) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Lead Representatives shall have received from Ernst & Young a
letter dated such date, in form and substance satisfactory to the Lead
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(j) Bring-down Comfort Letter. At Closing Time, the Lead
Representatives shall have received from Ernst & Young a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (i) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(k) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(l) Lock-up Agreements. At the date of this Agreement, the Lead
Representatives shall have received a Lock-Up Agreement substantially in the
form of Exhibit E hereto signed by the persons listed on Schedule D hereto.
(m) Delivery of Prospectus. The Company shall have complied with the
provisions of Section 3(d) hereof with respect to the furnishing of the
prospectus on the business day next succeeding the date of this Agreement.
(n) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Lead Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(g) hereof remains true and correct as of such Date of
Delivery.
(ii) Certificate of Selling Shareholders. A certificate, dated
such Date of Delivery, of a duly authorized officer of each Selling
Shareholder confirming that the certificate delivered at the Closing
Time pursuant to Section 5(h) hereof remains true and correct as of
such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinions
of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, outside counsel for the
Company, together with the favorable opinion of ▇▇▇▇ ▇. Del Col,
General Counsel of the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special
Bermuda counsel for the Company, and Ashurst, special United Kingdom
counsel for the Company, each in form and substance reasonably
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Sections 5(b), 5(c) and 5(d) hereof.
18
(iv) Opinion of Counsel for Selling Shareholders. The
favorable opinion of counsel for each of the Selling Shareholders,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(e) hereof.
(v) Opinion of Counsel for Underwriters. The favorable
opinions of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., U.S. counsel for
the Underwriters dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(f) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young,
in form and substance satisfactory to the Lead Representatives and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Lead Representatives pursuant
to Section 5(j) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(o) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and each Selling Shareholder in connection with the
issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Lead Representatives and counsel for
the Underwriters.
(p) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Lead Representatives by notice to the Company and each Selling
Shareholder at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters.
(i) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are 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; and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Lead Representatives expressly for use
therein.
19
(ii) Each Selling Shareholder will, severally and not
jointly, indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are 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;
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred, but only with reference to
information relating to such Selling Shareholder furnished in writing by or on
behalf of such Selling Shareholder expressly for use in the any preliminary
prospectus, the Registration Statement, or the Prospectus, or any amendment or
supplement thereto (it being understood and agreed that the only such
information furnished by any such Selling Shareholder consists of the
information about such Selling Shareholder under the caption "Principal and
Selling Shareholders" in the Prospectus (but not the percentage set forth
therein)); provided, however, that with respect to its indemnification
obligations hereunder no such Selling Shareholder shall be required to pay an
amount in excess of the net proceeds (before deducting expenses) received by
such Selling Shareholder from the Securities sold by it hereunder.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter will indemnify and hold harmless the Company and
each Selling Shareholder against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are 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 any preliminary prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Lead Representatives expressly for use therein; and will reimburse
the Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Actions against Parties; Notification. Promptly after receipt by an
indemnified party under subsection (a) and (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection to the extent it is not materially prejudiced as a result thereof. In
the case of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by the Lead Representatives, and, in the
case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company and the Selling
Shareholders. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
20
(d) Control Persons. The obligations of the Company and the Selling
Shareholders under this Section 6 shall be in addition to any liability which
the Company and the respective Selling Shareholders may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter or within the meaning of the Act and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company or any Selling Shareholder within the
meaning of the Act.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 is unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
Section 6, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under Section 6(c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and each Selling Shareholder
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus (for purposes of this Section 7, the benefit to the Company shall be
deemed to equal the total net proceeds of the offering of the Securities (before
deducting expenses)). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Shareholders on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Notwithstanding the provisions of this Section 7, no Selling
Shareholder shall be required to pay an amount in excess of the net proceeds
(before deducting expenses) received by such Selling Shareholders from the
shares sold by it hereunder.
21
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section 7
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 above in this Section
7. The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person, if any, who controls a Underwriter within the meaning of
the Act shall have the same rights to contribution as such Underwriter, and each
officer and director of the Company, and each person, if any, who controls the
Company or any Selling Shareholder within the meaning of the Act or shall have
the same rights to contribution as the Company or any Selling Shareholder, as
the case may be. The Underwriters' obligations in this Section 7 to contribute
are several in proportion to their respective underwriting obligations and not
joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or any Selling Shareholder submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company or any Selling Shareholder, and shall survive delivery of the Securities
to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Representatives may terminate this
Agreement, by notice to the Company and each Selling Shareholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus (exclusive of any supplement thereto), any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or in the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Lead Representatives, impracticable
or inadvisable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the NYSE, or if trading
generally on the American Stock Exchange or the NYSE or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a
banking moratorium has been declared by either federal or New York authorities.
22
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Lead Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters reasonably acceptable to
the Company and the Lead Representatives, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth; if, however, the Lead Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Selling
Shareholders to sell the Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Selling Shareholders to sell the relevant
Option Securities, as the case may be, either (i) the Lead Representatives or
(ii) the Company and Selling Shareholders shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Default by Selling Shareholders.
(a) If any Selling Shareholder shall fail at Closing Time to sell and
deliver the number of Securities which such Selling Shareholder is obligated to
sell hereunder, then the Underwriters may, at option of the Representatives, by
notice from the Representatives to the Company, either (i) terminate this
Agreement without any liability on the fault of any non-defaulting party except
that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and
effect or (ii) elect to purchase the Securities which such Selling Shareholder
has agreed to sell hereunder from the non-defaulting Selling Shareholders. No
action taken pursuant to this Section 11 shall relieve such Selling Shareholder
from liability, if any, in respect of such default.
23
(b) In the event of a default by any Selling Shareholder as referred to
in this Section 11, each of the Representatives and the Company shall have the
right to postpone Closing Time for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Lead Representatives at ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention: Registration
Department and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World
Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Tower - ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention: Syndicate Department; notices to the Company shall be directed
to it at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, Bermuda, attention:
General Counsel; and notices to the Selling Shareholders shall be directed to
▇▇▇▇ Del Col as attorney-in-fact.
SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and the Selling Shareholders
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm, company or
corporation, other than the Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Shareholders
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm, company or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
EACH OF THE PARTIES HERETO IRREVOCABLY (i) AGREES THAT ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST THE COMPANY BROUGHT BY ANY UNDERWRITER OR BY ANY
PERSON WHO CONTROLS ANY UNDERWRITER ARISING OUT OF OR BASED UPON THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN ANY UNITED STATES
FEDERAL OR STATE COURT IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, STATE
OF NEW YORK (A "NEW YORK COURT"), (ii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH PROCEEDING AND (iii) SUBMITS TO THE EXCLUSIVE
JURISDICTION OF SUCH NEW YORK COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE
COMPANY EXPRESSLY CONSENTS TO THE JURISDICTION OF ANY NEW YORK COURT IN RESPECT
OF ANY SUCH ACTION, AND WAIVES ANY OTHER REQUIREMENTS OF OR OBJECTIONS TO
PERSONAL JURISDICTION WITH RESPECT THERETO.
24
The Company hereby irrevocably appoints CT Corporation System in New
York City as its agent for service of process in any suit, action or proceeding
described in the preceding paragraph. The Company agrees that service of process
in any such suit, action or proceeding may be made upon it at the office of its
agent. The Company waives, to the fullest extent permitted by law, any other
requirements of or objections to personal jurisdiction with respect thereto. The
Company represents and warrants that its agent has agreed to act as agent for
service of process, and agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect.
SECTION 15. Waiver of Immunity. To the extent that the Company or any
Selling Shareholder has or hereafter may acquire any immunity (sovereign or
otherwise) from any legal action, suit or proceeding, from jurisdiction of any
court of from set-off or any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise) with
respect to itself or any of its property, it irrevocable waives, to the fullest
extent permitted by law, such immunity in respect of its obligations under this
Agreement.
SECTION 16. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Company and the Selling Shareholders in accordance
with its terms.
Very truly yours,
ENDURANCE SPECIALTY HOLDINGS LTD.
By:
-----------------------------------
Name:
Title:
THE SELLING SHAREHOLDERS NAMED ON SCHEDULE
A HERETO, ACTING SEVERALLY
By:
-----------------------------------
Attorney-in-fact
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
CREDIT SUISSE FIRST BOSTON LLC
DEUTSCHE BANK SECURITIES INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
WACHOVIA CAPITAL MARKETS, LLC
By:
-------------------------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO)
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
------------------------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule B hereto.
26
SCHEDULE A
Number of Number of
Initial Option
Name of Selling Shareholder Securities Securities
--------------------------- ---------- ----------
Virginia Surety Company, Inc....................................................
.................................................................................
Capital Z Financial Services Fund II, LP........................................
Capital Z Financial Services Private Fund II, LP................................
.................................................................................
Perry Partners International, Inc...............................................
Perry Partners, L.P.............................................................
▇▇▇▇▇▇ ▇. ▇▇▇ (Alternative) Fund V, L.P.........................................
▇▇▇▇▇▇ ▇. ▇▇▇ (Alternative) Parallel Fund V, L.P................................
▇▇▇▇▇▇ ▇. ▇▇▇ (Alternative) Cayman Fund V, L.P..................................
▇▇▇▇▇▇ ▇. ▇▇▇ Investors, L.P....................................................
1997 ▇▇▇▇▇▇ ▇. ▇▇▇ Nominee Trust................................................
▇▇▇▇▇▇ Investments Holdings, LLC................................................
▇▇▇▇▇▇ Investments Employees' Securities Co. I, LLC.............................
▇▇▇▇▇▇ Investments Employees' Securities Co. II, LLC............................
TPG Dutch Parallel III, C.V.....................................................
TPG Endurance Investments (Cayman), L.P.........................................
TPG Endurance Partners (Cayman), L.P............................................
Aon Pension Plan................................................................
First Plaza Group Trust.........................................................
GM Capital Partners I, L.P......................................................
LY-Endurance, LLC...............................................................
Metro Center Investments Pte Ltd................................................
Reservoir Capital Master Fund, L.P..............................................
Reservoir Capital Partners, L.P.................................................
--------- ---------
Total........................................................................... 8,000,000 1,200,000
========= =========
Sch A - 1
SCHEDULE B
Number of
Initial
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co......................................................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated..................................................................
Credit Suisse First Boston LLC...........................................................
Deutsche Bank Securities Inc.............................................................
▇.▇. ▇▇▇▇▇▇ Securities Inc...............................................................
Wachovia Capital Markets, LLC............................................................
---------
Total.................................................................................... 8,000,000
=========
Sch B - 1
SCHEDULE C
ENDURANCE SPECIALTY HOLDINGS LTD.
8,000,000 Ordinary Shares
(Par Value $1.00 Per Share)
1. The public offering price per share for the Securities, determined
as provided in said Section 2, shall be $ .
2. The purchase price per ordinary share for the Securities to be paid
by the several Underwriters shall be $ , being an amount equal to the public
offering price set forth above less $ per ordinary share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Sch C - 1
SCHEDULE D
List of Additional Persons and Entities
Subject to Lock-Up
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ Del Col
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. Spass
Subject to 30-day lock-up on substantially same terms:
DLJ Growth Capital Overseas Partners, C.V.
Sch D - 1