Exhibit 1
EXECUTION COPY
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ARCH CAPITAL GROUP LTD.
(a Bermuda limited company)
6,500,000 Common Shares
PURCHASE AGREEMENT
Dated: April 3, 2002
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Table of Contents
Page
SECTION 1. Representations and Warranties............................3
(a) Representations and Warranties by the Company.............3
(i) Compliance with Registration Requirements......3
(ii) Incorporated Documents.........................4
(iii) Independent Accountants........................4
(iv) Financial Statements...........................5
(v) No Material Adverse Change in Business.........5
(vi) Good Standing of the Company...................5
(vii) Good Standing of Subsidiaries..................6
(viii) Capitalization.................................6
(ix) Authorization of Agreement.....................6
(x) Authorization and Description of Securities....6
(xi) Absence of Claim to Commission or Fee..........7
(xii) Absence of Defaults and Conflicts..............7
(xiii) Compliance with Laws...........................8
(xiv) Absence of Labor Dispute.......................8
(xv) Absence of Proceedings.........................8
(xvi) Exhibits.......................................8
(xvii) Possession of Intellectual Property............8
(xviii) Absence of Further Requirements................9
(xix) Possession of Licenses and Permits.............9
(xx) Title to Property..............................9
(xxi) Compliance with Cuba Act......................10
(xxii) Investment Company Act........................10
(xxiii) 1934 Act Reporting............................10
(xxiv) No Manipulation...............................10
(xxv) Insurance Laws................................10
(xxvi) Full Force and Effect of Treaties.............11
(xxvii) Dividends.....................................11
(xxviii) Change in Insurance Laws or Regulations.......11
(xxix) Absence of Registration Rights................12
(xxx) Internal Accounting and Controls..............12
(xxxi) Directed Share Program........................12
(b) Officer's Certificates...................................12
SECTION 2. Sale and Delivery to Underwriters; Closing...............12
(a) Initial Securities.......................................12
(b) Option Securities........................................12
(c) Payment..................................................13
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Table of Contents
(continued)
Page
(d) Denominations; Registration..............................14
SECTION 3. Covenants of the Company.................................14
(a) Compliance with Securities Regulations and
Commission Requests....................................14
(b) Filing of Amendments.....................................14
(c) Delivery of Registration Statements......................15
(d) Delivery of Prospectuses.................................15
(e) Continued Compliance with Securities Laws................15
(f) Blue Sky Qualifications..................................16
(g) Rule 158.................................................16
(h) Use of Proceeds..........................................16
(i) Listing..................................................16
(j) Restriction on Sale of Securities........................16
(k) Reporting Requirements...................................17
(l) Directed Share Program...................................17
SECTION 4. Payment of Expenses......................................18
(a) Expenses.................................................18
(b) Termination of Agreement................................18
SECTION 5. Conditions of Underwriters' Obligations..................18
(a) Effectiveness of Registration Statement..................18
(b) Opinions of Counsel for Company..........................19
(c) Opinion of Counsel for Underwriters......................19
(d) Officers' Certificate....................................19
(e) Accountant's Comfort Letter..............................20
(f) Bring-down Comfort Letter................................20
(g) Approval of Listing......................................20
(h) Lock-up Agreements.......................................20
(i) Conditions to Purchase of Option Securities..............20
(ii) Opinion of Counsel for Company................20
(iii) Opinion of Counsel for Underwriters...........21
(iv) Bring-down Comfort Letter.....................21
(j) Additional Documents.....................................21
(k) Termination of Agreement.................................21
SECTION 6. Indemnification..........................................21
(a) Indemnification of Underwriters..........................21
(b) Indemnification of Company, Directors and Officers.......23
(c) Actions Against Parties; Notification....................23
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Table of Contents
(continued)
Page
(d) Settlement Without Consent if Failure to Reimburse.......24
(e) Indemnification for Directed Securities..................24
SECTION 7. Contribution.............................................25
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery.......................................26
SECTION 9. Termination of Agreement.................................26
(a) Termination; General.....................................26
(b) Liabilities..............................................27
SECTION 10. Default by One or More of the Underwriters...............27
SECTION 11. Notices..................................................28
SECTION 12. Parties..................................................28
SECTION 13. GOVERNING LAW AND TIME; CONSENT TO JURISDICTION..........28
SECTION 14. Effect of Headings.......................................29
SCHEDULES
Schedule A - List of Underwriters.............................Sch A-1
Schedule B - Pricing Information..............................Sch B-1
Schedule C - Subsidiaries.....................................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 Counsel..................A-1
Exhibit A-2 - Form of Opinion of Company's Bermuda Counsel..........A-2
Exhibit A-3 - Form of Opinion of Local Counsel......................A-3
Exhibit B - Form of Lock-up Letter................................B-1
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ARCH CAPITAL GROUP LTD.
(a Bermuda limited company)
6,500,000 Common Shares
(Par Value $0.01 Per Share)
PURCHASE AGREEMENT
April 3, 2002
Credit Suisse First Boston Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
as Representatives of the several Underwriters
c/o Credit Suisse First Boston Corporation
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
and
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Arch Capital Group Ltd., a Bermuda company (the "Company"), confirms its
agreement with Credit Suisse First Boston Corporation ("CSFBC"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom CSFBC, ▇▇▇▇▇▇▇ Lynch,
Goldman, Sachs & Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as representatives
(in such capacity, the "Representatives"), with respect to the issue and sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of Common Shares, par value $0.01 per share,
of the Company ("Common Shares") set forth in said Schedule A, and
with respect to the grant by the Company to the Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof to purchase all
or any part of 975,000 additional Common Shares to cover over-allotments, if
any. The aforesaid 6,500,000 Common Shares (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 975,000 Common Shares
subject to the option described in Section 2(b) hereof (the "Option Securities")
are hereinafter called, collectively, the "Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
As part of the offering contemplated by this Agreement, CSFBC (the
"Designated Underwriter") has agreed to reserve out of the Initial Securities
purchased by it under this Agreement, up to 325,000 shares, for sale to the
Company's directors, officers, employees and other parties associated with the
Company (collectively, "Participants"), as set forth in the Prospectus (as
defined herein) under the heading "Underwriting" (the "Directed Share Program").
The Initial Securities to be sold by the Designated Underwriter pursuant to the
Directed Share Program (the "Directed Shares") will be sold by the Designated
Underwriter pursuant to this Agreement at the public offering price. Any
Directed Shares not subscribed for by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-82612), including a
preliminary prospectus relating to the Securities, which relates to the offering
from time to time in accordance with Rule 415 under the Securities Act of 1933,
as amended (the "1933 Act"), of certain of its debt and equity securities
(including the Securities), and has filed amendments thereto on or prior to the
date of this Agreement. Such registration statement, as amended on or prior to
the date of this Agreement, has been declared effective by the Commission. As
provided in Section 3(d), a prospectus supplement reflecting the terms of the
offering of the Securities and the other matters set forth therein has been
filed pursuant to Rule 424(b) of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"). Such prospectus supplement is
herein referred to as the "Prospectus Supplement." The information included in
such prospectus supplement 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 pursuant to paragraph (b) of Rule 430A
is herein referred to as the "Rule 430A Information." Such registration
statement, as amended on or prior to the date of this Agreement, including the
Rule 430A Information, exhibits thereto, the schedules thereto and the documents
incorporated by reference therein, is herein called the "Registration
Statement," and the base prospectus included therein relating to all offerings
of securities un-
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der the Registration Statement, as supplemented by the Prospectus Supplement,
including all material incorporated by reference therein as of the date of the
prospectus supplement dated the date hereof (the "Final Prospectus Supplement"),
is herein called the "Prospectus." 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. No document has
been or will be prepared or distributed in reliance on Rule 434 under the 1933
Act. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus 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 ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is so
incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the
filing, of any document under the Securities Exchange Act of 1934 (the "1934
Act") which is incorporated by reference in the Registration Statement after the
date of the Final Prospectus Supplement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
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. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any 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, and any request on the part of the
Commission for additional information has been complied with. No document
has been or will be prepared or distributed in reliance on Rule 434 under
the 1933 Act.
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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, and the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements
thereto will comply, with any applicable laws or regulations of the United
States or any state thereof and Bermuda in which the Prospectus or any
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program. Neither the
Prospectus nor any amendments or supplements thereto, at the dates thereof
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. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through CSFBC or ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement or 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) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus or any amendment or supplement thereto, at the time they were or
hereafter are filed with the Commission, complied or will comply, as the
case may be, in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations or the 1934 Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the date of the Prospectus and
at the Closing Time (and if any Option Securities are purchased, at the
Date of Delivery), did not and will not contain an untrue statement
4
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.
(iii) 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.
(iv) Financial Statements. The 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; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus
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 financial
information included under the line item and column "As Adjusted" under the
captions "Summary Historical Consolidated Financial Data" and
"Capitalization," respectively, in the Prospectus presents fairly the
information shown therein, and has been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein and the pro forma
columns therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(v) 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 disclosed 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 capital
stock.
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(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a limited company in good standing under the
laws of Bermuda and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign 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, singly or in the aggregate,
result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the 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, singly or in the aggregate, result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each such subsidiary (other than
the $2.5 million of preferred shares that may be issued in the ordinary
course of business by Alternative Insurance Company Limited and Alternative
Re, Ltd. in connection with their "rent-a-captive" business) 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 capital stock of any subsidiary
was issued in violation of the preemptive or similar rights of any
securityholder of such subsidiary. The term subsidiary includes the
subsidiaries listed on Schedule C hereto. The only material subsidiaries of
the Company are the subsidiaries listed on Schedule C hereto.
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Historical" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus, pursuant to the exercise of convertible securities or options
referred to in the Prospectus or otherwise disclosed in the Prospectus).
The issued and outstanding shares of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the Company.
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(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities have
been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company pursuant to
this Agreement against payment of the consideration set forth herein, will
be validly issued, fully paid and non-assessable; the Common 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.
(xi) Absence of Claim to Commission or Fee. Except as disclosed in the
Prospectus, there are no contracts, agreements or understandings between
the Company and any person that would give rise to a valid claim against
the Company or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with this offering.
(xii) Absence of Defaults and Conflicts. The Company is not in
violation of its memorandum of association or bye-laws. None of the
Company's subsidiaries is in violation of its organizational documents,
except for such violations that would not, singly or in the aggregate, have
a Material Adverse Effect. Neither the Company nor any of its subsidiaries
is in 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 that
would not, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and 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
7
liens, charges or encumbrances that would not, singly or in the aggregate,
result in a Material Adverse Effect), nor will such action result in any
violation of (i) the provisions of the charter or by-laws of the Company or
any subsidiary or (ii) 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 where such violations with respect to this Section 2(xii)(ii) would
not, singly or in the aggregate, have 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 (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.
(xiii) Compliance with Laws. The Company and each of its subsidiaries
is in compliance with the requirements of all laws, ordinances,
governmental regulations or court decree to which it may be subject, and
has filed all notices, reports, documents or other information required to
be filed thereunder except where the failure to so comply or file would
not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(xiv) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any 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 subsidiary's principal
suppliers, manufacturers, customers or contractors, which would, singly or
in the aggregate, reasonably be expected to result in a Material Adverse
Effect.
(xv) 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, against or affecting the Company or any subsidiary
(other than as disclosed in the Registration Statement) which would, singly
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect or which might 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, singly or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
8
(xvi) Exhibits. There are no contracts or documents which are required
to be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(xvii) Possession of Intellectual Property. The Company and its
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 possess such Intellectual
Property would not, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Effect; and neither the Company nor any of its
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 subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, would, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
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 hereunder 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 or state securities laws and (ii) such as have been obtained
under the laws and regulations of jurisdictions outside the United States
in which the Directed Shares are offered.
(xix) Possession of Licenses and Permits. The Company and its
subsidiaries (i) possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, and (ii) are in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to possess or comply would not, singly or in
the aggregate, have a
9
Material Adverse Effect. All of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not, singly or in the aggregate, have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which would, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, have a Material
Adverse Effect.
(xx) (Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; and neither
the Company nor any subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any subsidiary under any leases or subleases material to the business of
the Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties as described
in the Prospectus, or affecting or questioning the rights of the Company or
any subsidiary to the continued possession of the leased or subleased
premises under any lease or sublease which would, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(xxi) Compliance with Cuba Act. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xxii) Investment Company Act. Neither the Company nor any of its
subsidiaries is, and upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as described
in the Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxiii) 1934 Act Reporting. The Company is subject to the reporting
requirements of Section 13 of the 1934 Act and files reports with the
Commission on ▇▇▇▇▇.
(xxiv) No Manipulation. None of the Company, its affiliates or to the
best of the Company's knowledge, any of its officers or directors has taken
or will take, directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the Company, or which
caused or resulted in,
10
or which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company,
in each case, in any manner that would violate the 1933 Act, the 1934 Act,
or the rules and regulations of the Commission.
(xxv) Insurance Laws. Each of the Insurance Subsidiaries is duly
licensed or authorized as an insurer or reinsurer in each jurisdiction
where it is required to be so licensed or authorized in order to conduct
its business as described in the Prospectus. Each of the Company and its
subsidiaries that is so required, has filed all reports, information
statements and other documents with the insurance regulatory authorities of
its jurisdiction of incorporation and domicile as are required to be filed
pursuant to the insurance statutes of such jurisdictions, including the
statutes relating to companies which control insurance companies, and the
rules, regulations and interpretations of the insurance regulatory
authorities thereunder (the "Insurance Laws"), and has duly paid all taxes
(including franchise taxes and similar fees) it is required to have paid
under the Insurance Laws, except where the failure to file such statements
or reports or pay such taxes would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and each of the
Company and its subsidiaries maintains its books and records in accordance
with the Insurance Laws, except where the failure to so maintain its books
and records would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its subsidiaries is in compliance with the
requirements of the Insurance Laws of its jurisdiction of incorporation and
the Insurance Laws of other jurisdictions which are applicable to the
Company or such subsidiary except where the failure to comply would not
reasonably be expected to have a Material Adverse Effect. Except as
disclosed in the Prospectus, the Company and each of the Insurance
Subsidiaries and Holding Company Subsidiaries has received approvals of
acquisition of control and/or affiliate transactions in each jurisdiction
where such approvals are required.
(xxvi) Full Force and Effect of Treaties. Except as disclosed in the
Prospectus, all retrocessional and reinsurance treaties, contracts and
arrangements to which the Company or any of the subsidiaries is a party are
in full force and effect and none of the Company or any of its subsidiaries
is in violation of, or in default in the performance, observance or
fulfillment of, any obligation, agreement, covenant or condition contained
therein, except where the failure to be in full force and effect and except
where any such violation or default would not, singly or in the aggregate,
have a Material Adverse Effect; none of the Company or any of its
subsidiaries has received any written notice from any of the other parties
to such treaties, contracts or agreements which are material to its
business that such other party intends not to perform in any material
respect such treaty, contract or agreement, and none of the Company and its
subsidiaries have been notified in writing that any of the parties to such
treaties, contracts or agreements will be unable to
11
perform such treaty, contract, agreement or arrangement, except where such
non-performance would not, singly or in the aggregate, be reasonably
expected to have a Material Adverse Effect.
(xxvii) Dividends. Except as described in the Prospectus, no insurance
regulatory agency or body has issued any order or decree, impairing,
restricting or prohibiting the payment of dividends of any company,
including the Company or subsidiary to its respective parent which would,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
(xxviii) Change in Insurance Laws or Regulations. Except as described
in the Prospectus, to the knowledge of the Company, the Company, its
Insurance Subsidiaries and Holding Subsidiaries, no change in any insurance
law or regulation is pending that would reasonably be expected to have,
singly or in the aggregate, a Material Adverse Effect.
(xxix) Absence of Registration Rights. Except as disclosed in the
Prospectus, no person or entity has the right to require registration of
Common Shares or other securities of the Company because of the filing or
effectiveness of the Registration Statement or sale of the Securities or
otherwise, except for persons and entities who have expressly waived such
right in writing.
(xxx) Internal Accounting and Controls. The Company and its
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 United States 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.
(xxxi) Directed Share Program. The Company has not offered, or caused
the Underwriters to offer any offered Securities to any person pursuant to
the Directed Share Program with the specific intent to unlawfully influence
(i) a customer or supplier of the Company to alter the customer's or
supplier's level or type of business with the Company or (ii) a trade
journalist or publication to write or publish favorable information about
the Company or its products.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries, on behalf of the Company, delivered to the
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.
12
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, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A 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.
(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 Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 975,000 Common Shares at the price
per share set forth in Schedule B, 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 CSFBC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the
Representatives to the Company 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 (the "Date of Delivery") shall be determined by CSFBC and
▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Representatives, but shall not be later than
seven full business days after the exercise of said option (or earlier than two
business days), 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 A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the 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 ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other
place as shall be agreed upon by the 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
CSFBC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Representatives and the Company (such
time and date of payment and delivery being herein called "Closing Time").
13
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 CSFBC and ▇▇▇▇▇▇▇
▇▇▇▇▇ on behalf of the Representatives and the Company, on each Date of Delivery
as specified in the notice from CSFBC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the 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 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. CSFBC and ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representatives 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 Date of Delivery, as the case may be, but such payment shall
not relieve such Underwriter from its obligations hereunder.
(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 Representatives may request in writing at least one full
business day before the Closing Time or the 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 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.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. Prior
to the termination of the offering of the Securities, the Company, subject to
Section 3(b), will comply with the requirements of Rule 430A, and will notify
the 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 or any document that would as a result thereof be incorporated by
reference in the Prospectus shall have been filed and (ii) of the receipt of any
comments from the Commission. Notwithstanding the foregoing, the Company will
comply with the requirements of Rule 430A, and will notify the Representatives
immediately, and confirm the notice in writing, (i) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supple-
14
ment to the Prospectus or for additional information that relates to the
Securities, the offering thereof or any information incorporated by reference in
the Prospectus as of its date and (ii) 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. Prior to the termination of the offering of the Securities, the
Company has effected filings or will effect filings necessary pursuant to Rule
424(b) and has taken such steps as it deems necessary to ascertain whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission. 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.
(b) Filing of Amendments. Prior to the termination of the offering of the
Securities, the Company will give the Representatives notice of its intention to
file or prepare any amendment to the Registration Statement (including any
filing under Rule 462(b)), 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, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the 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 Representatives
or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. Prior to the termination of the
offering of the Securities, the Company has furnished or will deliver to the
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
documents incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the 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 Prospectuses. 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 in connection with the offering of the Securities or as
required or permitted by the ▇▇▇▇ ▇▇▇. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter
15
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 and the 1934 Act and the 1934 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 opinion of counsel for the Underwriters or 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
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the 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.
(f) Blue Sky Qualifications. The Company will use its 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 Representatives may 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 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
securityholders 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.
16
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner described in the Prospectus under
"Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and maintain
the quotation of the Securities on the Nasdaq National Market and will file with
the Nasdaq National Market all documents and notices required by the Nasdaq
National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market; the Company will use its best efforts to list the Securities
under the 1934 Act.
(j) Restriction on Sale of Securities. During a period of 120 days from the
date of this Agreement, the Company will not, without the prior written consent
of CSFBC and ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any Common Shares of the Company or any
securities convertible into or exchangeable or exercisable for Common Shares,
whether now owned or hereafter acquired (including upon exercise of options
currently held) or file any registration statement under the 1933 Act (provided,
however, that this restriction on filing of any registration statement shall not
apply to a registration statement on Form S-8) with respect to any of the
foregoing (all such Common Shares, the "Restricted Shares") or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Restricted Shares, whether any such swap or transaction is to be settled by
delivery of Restricted Shares or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) options to purchase Common Shares issued to, or grants of
restricted Common Shares made to employees or non-employee directors pursuant to
employee and non-employee director equity compensation plans of the Company in
existence on the date hereof and described in the Prospectus (the "Existing
Plan"), or approved by the shareholders of the Company at the 2002 Annual
General Meeting of Shareholders (the "New Plan") provided, however, that the
Company shall not grant in the aggregate any such options or restricted Common
Shares under the New Plan in excess of 120% of the number of options or
restricted Common Shares that is permitted to be granted under the Existing
Plan, (C) any Common Shares issued by the Company upon the conversion or
exercise of options or restricted shares, as the case may be, outstanding on the
date hereof or granted pursuant to subclause (B) of this clause (j) or upon the
exercise of warrants outstanding on the date hereof, (D) issuance of preference
shares in accordance with the purchase price adjustments set forth in the
subscription agreement entered into in connection with the capital infusion (as
described in the Prospectus under the heading "The Capital Infusion --
Subscription Agreement -- Purchase Price Adjustments"), (E) the conversion of
preference shares outstanding on the date hereof or granted pursuant to
subclause (D) of this clause (j), (F) Common Shares sold pursuant to the
Company's existing employee
17
share purchase plan or (G) Common Shares or securities convertible into Common
Shares issued as consideration in any business combination or acquisition with a
third party approved by the Board of Directors.
(k) 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 1934 Act
Regulations.
(l) Directed Share Program. In connection with the Directed Share Program,
the Company will ensure that the Directed Shares will be restricted to the
extent required by the National Association of Securities Dealers Inc. (the
"NASD") or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. The Designated Underwriter will
notify the Company as to which Participants will need to be so restricted. The
Company will direct the transfer agent to place stop transfer restrictions upon
such securities for such period of time. Furthermore, the Company will comply
with all applicable securities and other applicable laws, rules and regulations
in the United States or any state thereof or Bermuda in which Directed Shares
are being offered in connection with the Directed Share Program.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay 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, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock 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, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus and of 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 fees and expenses of any transfer agent or
registrar for the Securities, (ix) the filing fees incident to the review by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Securities, (x) the fees and expenses incurred in connection
with the inclusion of the Securities in the Nasdaq National Market and (xi) all
reasonable fees and disbursements of counsel incurred by the Underwriters in
connection with the Directed Share Program and stamp
18
duties, similar taxes or duties or other taxes, if any, incurred by the
underwriters in connection with the Directed Share Program; provided, however,
any expenses of the Company in connection with attending or hosting meetings
with prospective purchasers of the Securities shall be paid by the Underwriters.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
reasonable 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 contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
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).
(b) Opinions of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of (a)
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, (b) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇,
Bermuda counsel for the Company and (c) ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, Nebraska counsel
for the Company, each in form and substance 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 Exhibits ▇-▇, ▇-▇ and A-3
hereto and to such further effect as counsel to the Underwriters may reasonably
request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for the Underwriters, in form and
substance satisfactory to the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters. In giving such opinion
such counsel may rely, as to all matters gov-
19
erned by the laws of jurisdictions other than the law of the State of New York
and the federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. Such counsel 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.
(d) 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 Representatives shall have
received a certificate of the Company signed by the President or a Vice
President of the Company and by 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 are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers a
letter dated such date, in form and substance satisfactory to the
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.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from PricewaterhouseCoopers a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) Approval of Listing. At Closing Time, the Securities shall have been
approved for inclusion in the Nasdaq National Market, subject only to official
notice of issuance.
(h) Lock-up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form of Exhibit B hereto
signed by the persons listed on Schedule D hereto.
20
(i) 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
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of Delivery,
of the Company President or a Vice President of the Company and by the
chief financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, together with the favorable
opinion of (a) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel for the Company, (b)
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, Nebraska counsel for the Company, each in form and
substance 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
Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, 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(c) hereof.
(iv) Bring-down Comfort Letter. A letter from PricewaterhouseCoopers,
in form and substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 5(f) 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.
(j) 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 in connection with the issuance and
21
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Representative(s) and counsel for the Underwriters.
(k) 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 Representatives by notice to the Company 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. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act (the "Designated Entities") as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred by the Designated Underwriter, arising out of (A)
the violation of any applicable laws or regulations of the following
jurisdictions in connection with the sale of the Directed Shares to the
persons identified as potential offerees by the Company: the ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and Germany, (B) any
untrue statement or alleged untrue statement of a material fact included in
the supplement, prospectus wrapper or any other material prepared by or
with the consent of the Company for distribution in connection with the
reservation and sale of the Directed Shares to Participants or the omission
or alleged omission therefrom of a material fact necessary to make the
statements therein, in each case when considered in conjunction with the
Prospectus or
22
preliminary prospectus, not misleading, (C) the failure of any Participant
to pay for and accept delivery of Directed Shares that the Participant
agreed to purchase and (D) the Directed Share Program; or in any such case
other than losses, claims, damages or liabilities (or expenses relating
thereto) to the extent resulting from the bad faith or gross negligence of
the Designated Entities;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by CSFBC and ▇▇▇▇▇▇▇ ▇▇▇▇▇),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission to the extent that any such expense is not paid under (i), (ii) or
(iii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through CSFBC or ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for
use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto); and provided further that the Company
will not be liable to an Underwriter with respect to any preliminary
prospectus to the extent that the Company shall sustain the burden of
proving that any such loss, liability, claim, damage or expense resulted
from the fact that such Underwriter, in contravention of a requirement of
this Agreement or applicable law, sold Securities to a person to whom such
Underwriter failed to send or give, at or prior to the Closing Date, a copy
of the Prospectus, as then amended or supplemented if: (i) the Company has
previously furnished copies thereof (sufficiently in advance of the Closing
Date to allow for distribution by the Closing Date) to the Underwriters and
the loss, liability, claim, damage or expense of such Underwriter resulted
from an untrue statement or omission of a material fact contained in or
omitted from the preliminary prospectus which was corrected in the
Prospectus as, if applicable, amended or supplemented prior to the Closing
Date and such Prospectus was required by law to be delivered at or prior to
the written confirmation of sale to such person and (ii) such failure to
give or send such Prospectus by the Closing Date to the party or parties
asserting such loss, liability, claim, damage or expense would have
constituted the sole defense to the claim asserted by such person.
23
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through CSFBC or ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by CSFBC and ▇▇▇▇▇▇▇ ▇▇▇▇▇
(subject to reasonable satisfaction of the Company) and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Company (subject to reasonable satisfaction of the
Underwriters). An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each named indemnified party
from all liability arising out of such litigation, investigation, proceeding 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.
24
(d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse in
accordance with the terms hereof, the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) and Section 6(a)(iii)
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed, in accordance with the
terms hereof, such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement of the nature
contemplated by Section 6(a)(ii) and Section 6(a)(iii) effected without its
consent if such indemnifying party (i) reimburses such indemnified party in
accordance with such request to the extent it considers such request to be
reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement.
(e) Indemnification for Directed Securities. Notwithstanding anything
contained herein to the contrary, if indemnity may be sought pursuant to Section
6(ii) hereof in respect of such action or proceeding, then in addition to such
separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for the Designated Underwriter for the
defense of any losses, claims, damages and liabilities arising out of the
Directed Share Program, and all person, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the 1933 Act or Section
20 of the 1934 Act.
25
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions, or in connection with
any violation of the nature referred to in Section 6(a)(ii)(A) hereof, which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or any violation of the nature referred to in Section 6(a)(ii)(A)
hereof.
The Company and the Underwriters agree that it would not be just and
equitable if contribution 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 aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
26
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 any 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 ▇▇▇▇ ▇▇▇) 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 an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto 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 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, and shall survive delivery of the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time 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 or amendment thereto), (i) 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)
any downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the 1933 Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading of such
rating), or (iii) any material adverse change in the financial markets
27
in the United States or in the international financial markets, any outbreak of
hostilities or escalation thereof, any declaration of war by Congress 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
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iv) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange 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 (v) if a
banking moratorium has been declared by either Federal or New York authorities.
(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 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 Representative(s) shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, 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 Representative(s) 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 Company 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.
28
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 Company to sell the relevant Option Securities,
as the case may be, either the Representative(s) or the Company 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. 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 Representatives at CSFBC, Eleven ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of Transaction Advisory Group,
and ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention of Equity Capital Markets; Notices to the Company shall be
directed to it at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 11 Bermuda,
attention of Secretary with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company 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 and the Company 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 or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
29
SECTION 13. GOVERNING LAW AND TIME; CONSENT TO JURISDICTION. 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.
(a) With respect to any suit, action or proceeding against its arising out
of or relating to this Agreement, the Company irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of New York and the United
States District Courts in each case located in the Borough of Manhattan, City
and State of New York. In addition, the Company irrevocably waives any objection
which is may now or hereafter have to the laying of venue of such suit, action
or proceeding brought in any such court and irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.
(b) For purposes of any such suit, action or proceeding brought in any of
the foregoing courts, the Company agrees to maintain an agent for service of
process in the Borough of Manhattan, City and State of New York, at all times
while any Securities shall be outstanding, and for that purpose the Company
hereby irrevocably designates ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, c/o ▇▇▇▇▇▇▇▇ ▇▇▇▇, as its agent to receive on its behalf
service of process (with a copy of all such service of process to be delivered
to Arch Capital Group Ltd. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇, ▇▇▇▇▇▇▇▇▇: Chief Financial
Officer) brought against it with respect to any such proceeding in any such
court in the Borough of Manhattan, City and State of New York, such service
being hereby acknowledged by the Company to be effective and binding service on
it in every respect whether or not the Company shall then be doing or shall have
at any time done business in New York. In the event that such agent for service
of process resigns or creases to serve as the agent of the Company, the Company
agrees to give notice as provided in Section 11 herein of the name and address
of any new agent for service of process with respect to it appointed hereunder.
(c) If, despite the foregoing, in any such suit, action or proceeding
brought in any of the aforesaid courts, there is for any reason no such agent
for service of process of the Company available to be served, then to the extent
that service of process by mail shall then be permitted by applicable law, the
Company further irrevocably consents to the service of process on it in any such
suit, action or proceeding in any such court by the mailing thereof by
registered or certified mail, postage prepaid, to it at its address given in or
pursuant to Section 11 hereof.
(d) Nothing herein contained shall preclude any party from effecting
service of process in any lawful manner or from bringing any suit, action or
proceeding in respect of this Agreement in any other state, country or place.
30
SECTION 14. Effect of Headings. The Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction
hereof.
31
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 between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
ARCH CAPITAL GROUP LTD.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel and Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written:
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Director
By:▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Director
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
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