Exhibit 1.1
RAM HOLDINGS LTD.
[___] Shares
Common Shares
UNDERWRITING AGREEMENT
dated April [__], ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
UNDERWRITING AGREEMENT
April [ ], 2006
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introductory. RAM Holdings Ltd., a Bermuda corporation (the "Company),
proposes to issue and sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of [___] of its common shares, par value $0.10 per
share (the "Shares"); the shareholders of the Company named in Schedule B (the
"Selling Shareholders") severally propose to sell to the Underwriters an
aggregate of [___] Common Shares (the "Offering"). The [___] Common Shares to be
sold by the Company and the [___] Common Shares to be sold by the Selling
Shareholders are collectively called the "Firm Common Shares". In addition, the
Selling Shareholders have severally granted the Underwriters an option to
purchase up to an additional [___] Common Shares, with each Selling Shareholder
selling up to the amount set forth opposite such Selling Shareholder's name in
Schedule B. The additional [___] shares to be sold by the Selling Shareholders
pursuant to such option are collectively called the "Optional Common Shares", as
provided in Section 2. The Firm Common Shares and, if and to the extent such
option is exercised, the Optional Common Shares, are called the "Common Shares".
Banc of America Securities LLC ("BAS") and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") have agreed to act as representatives of the
several Underwriters (in such capacity, the "Representatives") in connection
with the offering and sale of the Common Shares.
The Company and the Selling Shareholders hereby confirm their engagement of
▇▇▇▇▇▇▇ ▇▇▇▇▇ as, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ hereby confirms its agreement with the
Company and the Selling Shareholders to render services as a "qualified
independent underwriter", within the meaning of Section (b)(15) of Rule 2720 of
the NASD, Inc. (the "NASD") with respect to the offering and sale of the Common
Shares. ▇▇▇▇▇▇▇ ▇▇▇▇▇, solely in its capacity as the qualified independent
underwriter and not otherwise, is referred to herein as the "QIU". The price at
which the Common Shares will be sold to the public shall not be higher than the
maximum price recommended by the QIU.
The Company and each of the Selling Shareholders hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 1. Representations and Warranties of the Company.
A. The Company hereby represents, warrants and covenants to each
Underwriter as follows:
(a) Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-1 (File No. 333-131763), which contains a form of prospectus to be
used in connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
required information deemed to be a part thereof at the time of effectiveness
pursuant to Rule 430A under the Securities Act is called the "Registration
Statement". Any registration statement filed by the Company pursuant to Rule
462(b) under the Securities Act is called the "Rule 462(b) Registration
Statement", and from and after the date and time of filing of the Rule 462(b)
Registration Statement the term "Registration Statement" shall include the Rule
462(b) Registration Statement. Any preliminary prospectus included in the
Registration Statement is hereinafter called a "preliminary prospectus." The
term "Prospectus" shall mean the final prospectus relating to the Common Shares
that is first filed pursuant to Rule 424(b) after the date and time that this
Agreement is executed and delivered by the parties hereto (the "Execution Time")
or, if no filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Common Shares included in the Registration
Statement at the effective date. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
(b) Compliance with Registration Requirements. The Registration Statement
has been declared effective by the Commission under the Securities Act. To its
knowledge, the Company has complied to the Commission's satisfaction with all
requests of the Commission for additional or supplemental information. No stop
order suspending the effectiveness of the Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or, to
the best knowledge of the Company, are threatened by the Commission.
Each preliminary prospectus, the Prospectus and each prospectus wrapper
prepared in connection therewith when filed complied in all material respects
with the Securities Act and, if filed by electronic transmission pursuant to
▇▇▇▇▇ (except as may be permitted by Regulation S-T under the Securities Act),
was identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Common Shares. The Registration
Statement complies and any post-effective amendment thereto will comply in all
material respects with the requirements of the Securities Act, as of the
applicable effective date, at the First Closing (as defined herein) and at any
Second Closing Date (as defined herein) and the Registration Statement did not
and any post-effective amendment thereto will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, as
of the applicable effective date. The Prospectus (including any Prospectus
wrapper), as amended or supplemented, as of its
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date, the First Closing Date (as defined herein) and at any Second Closing Date
(as defined herein), did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with information relating to (i) any Underwriter furnished to the
Company in writing by the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by the
Representatives consists of the information described as such in Section 8
hereof or (ii) any Selling Shareholder and furnished in writing by or on behalf
of such Selling Shareholder expressly for use therein.
(c) Disclosure Package. The term "Disclosure Package" shall mean (i) the
preliminary prospectus, as most recently amended or supplemented immediately
prior [ ] p.m. (Eastern time) on the date of the execution and delivery of this
Agreement (the "Applicable Time"), if any, as amended or supplemented, (ii) the
issuer free writing prospectuses as defined in Rule 433 of the Securities Act
(each, an "Issuer Free Writing Prospectus"), if any, identified in Schedule C
hereto, (iii) any other free writing prospectus that the parties hereto shall
hereafter expressly agree in writing to treat as part of the Disclosure Package
and (iv) Schedule D hereto indicating the number of Shares being sold and the
price at which the Common Shares will be sold to the public. As of the
Applicable Time, the Disclosure Package does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from the Disclosure Package based upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein or by or on behalf of any Selling
Shareholder specifically for use therein, it being understood and agreed that
the only such information furnished by or on behalf of any Underwriter consists
of the information described as such in Section 8 hereof.
(d) Company Not Ineligible Issuer. (i) At the time of filing the
Registration Statement and (ii) as of the date of the execution and delivery of
this Agreement (with such date being used as the determination date for purposes
of this clause (ii)), the Company was not and is not an Ineligible Issuer (as
defined in Rule 405 of the Securities Act), without taking account of any
determination by the Commission pursuant to Rule 405 of the Securities Act that
it is not necessary that the Company be considered an Ineligible Issuer.
(e) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus,
as of its issue date and at all subsequent times through the completion of the
Offering or until any earlier date that the Company notified or notifies the
Representatives as described in the next sentence, did not, does not and will
not include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, a preliminary prospectus or
the Prospectus. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of which
such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement, a preliminary prospectus or
the Prospectus, the Company has promptly notified or
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will promptly notify the Representatives and has promptly amended or will
promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict. The foregoing two sentences do
not apply to statements in or omissions from any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company
by any Underwriter through the Representatives specifically for use therein or
by or on behalf of any Selling Shareholder specifically for use therein, it
being understood and agreed that the only such information furnished by or on
behalf of any Underwriter consists of the information described as such in
Section 8 hereof.
(f) Accuracy of Statements in Prospectus. The statements in each of the
Disclosure Package and the Prospectus under the headings "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources", "Business -- Legal Proceedings", "Regulation",
and "Description of Share Capital" insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or proceedings.
(g) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Common Shares, any offering material in connection with the offering and
sale of the Common Shares other than a preliminary prospectus, the Prospectus,
any Issuer Free Writing Prospectus reviewed and consented to by the
Representatives or included in Schedule B hereto or the Registration Statement.
(h) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(i) Authorization of the Common Shares. The Common Shares to be purchased
by the Underwriters from the Company and the Selling Shareholders have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company and the Selling Shareholders pursuant to this Agreement
on the First Closing Date or any Second Closing Date, will be validly issued,
fully paid and nonassessable.
(j) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, other than the Selling Shareholders
with respect to the Common Shares included in the Registration Statement, except
for such rights as have been duly waived.
(k) No Material Adverse Change. Except as otherwise disclosed in the
Disclosure Package, the Registration Statement or the Prospectus, subsequent to
the respective dates as of which information is given in the Disclosure Package,
the Registration Statement or the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to result
in a material adverse change, in the condition, financial or otherwise, or in
the earnings, business, properties, operations or business prospects, whether or
not arising from transactions in the ordinary course of business, of the Company
and its subsidiaries, considered as one entity (any such change is called a
"Material Adverse Change"); (ii) the Company and its subsidiaries, considered as
one entity, have not incurred any material
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liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in
the ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its subsidiaries on
any class of capital stock or repurchase or redemption by the Company or any of
its subsidiaries of any class of capital stock.
(l) Independent Accountants. PricewaterhouseCoopers LLP (Bermuda), who have
certified certain financial statements (which term as used in this Agreement
includes the related notes thereto) filed with the Commission as a part of the
Registration Statement and included in the Disclosure Package and the
Prospectus, are independent public accountants as required by the Securities Act
and the Exchange Act and the applicable published rules and regulations
thereunder.
(m) Preparation of the Financial Statements. The financial statements filed
with the Commission as a part of the Registration Statement and included in the
Disclosure Package and the Prospectus present fairly in all material respects
the consolidated financial position of the Company and its subsidiaries as of
and at the dates indicated and the results of their operations and cash flows
for the periods specified. Such financial statements and supporting schedules
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and have been prepared in conformity with
generally accepted accounting principles ("GAAP") as applied in the United
States applied on a consistent basis throughout the periods involved, except as
may be expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included or incorporated
by reference in the Registration Statement. The financial data set forth in each
of the preliminary prospectus and the Prospectus under the captions "Prospectus
Summary -- Summary Combined Financial Information", "Selected Combined Financial
Information" and "Capitalization" fairly present the information set forth
therein on a basis consistent with that of the audited financial statements
contained in the Registration Statement.
(n) Incorporation and Good Standing of the Company and RAM Re. Each of the
Company and its subsidiary, RAM Reinsurance Company, Ltd. ("RAM Re"), has been
duly organized and is validly existing as an exempted company in good standing
under the laws of the Islands of Bermuda and has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Disclosure Package and the Prospectus and, in the case of the
Company, to enter into and perform its obligations under this Agreement. Each of
the Company and RAM Re 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 for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. The only subsidiary of the
Company is RAM Re. All of the issued and outstanding common shares of RAM Re
will be held by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim, after the completion of the amalgamation to
be consummated shortly before the completion of the offering contemplated by
this Agreement. All of the issued and outstanding common shares of RAM Re have
been duly authorized and validly issued, is fully paid and nonassessable.
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(o) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding share capital of the Company is as set forth in each of the
Disclosure Package and the Prospectus under the caption "Capitalization" (other
than for subsequent issuances, if any, pursuant to employee benefit plans
described in the Disclosure Package and the Prospectus or upon exercise of
outstanding options described in the Disclosure Package and the Prospectus, as
the case may be). The share capital of the Company (including the Common Shares)
conforms in all material respects to the description thereof contained in each
of the Disclosure Package and the Prospectus. All of the issued and outstanding
Common Shares (including the Common Shares owned by the Selling Shareholders)
have been duly authorized and validly issued, are fully paid and nonassessable
and have been issued in compliance with Bermudan, U.S. federal and state
securities laws. None of the outstanding Common Shares were issued in violation
of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any share capital of the Company or any of its
subsidiaries other than those accurately described in the Disclosure Package and
the Prospectus. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth or incorporated by reference in each of the Disclosure
Package and the Prospectus accurately and fairly presents in all material
respects the information required to be shown with respect to such plans,
arrangements, options and rights.
(p) Listing. The Common Shares have been approved for listing on the Nasdaq
Stock Market, Inc., subject only to official notice of issuance.
(q) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor its subsidiary is (i) in violation
of its memorandum of association or bye-laws or is in default therewith (or,
with the giving of notice or lapse of time, would be in default) ("Default")
(ii) in Default under any indenture, mortgage, loan or credit agreement, deed of
trust, note, contract, franchise, lease or other agreement, obligation,
condition, covenant or instrument to which the Company or any of its
subsidiaries is a party or by which it or either of them may be bound, or to
which any of the property or assets of the Company or any of its subsidiaries is
subject (each, an "Existing Instrument"), or (iii) in violation of any statute,
law, rule, regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its properties, as
applicable, except with respect to clauses (ii) and (iii) only, for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and by the
Disclosure Package and the Prospectus (i) have been duly authorized by all
necessary corporate action and will not result in any violation of the
provisions of the memorandum of association or bye-laws of the Company or its
subsidiary, (ii) will not conflict with or constitute a breach of, or Default or
a Debt Repayment Triggering 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 of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change and (iii)
will not
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result in any violation of any law, administrative regulation, judgment, order
or administrative or court decree applicable to the Company or its subsidiary of
any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or any of its
subsidiaries or its or their properties. No consent, approval, authorization or
other order of, or registration or filing with, any court or other governmental
or regulatory authority or agency (including, without limitation, any insurance
regulatory agency or body), is required for the Company's execution, delivery
and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Disclosure Package and the Prospectus, except (A)
such as have been obtained or made by the Company and are in full force and
effect under the Securities Act, as may be required under applicable state
securities or blue sky laws, insurance securities laws or any laws of
jurisdictions outside the United States in connection with the distribution of
shares by or for the account of the Underwriters and from the NASD, and (B) such
as have been obtained from the Bermuda Monetary Authority and are in full force
and effect as described in the Prospectus. As used herein, a "Debt Repayment
Triggering Event" means any event or condition which gives, or with the notice
or lapse of time would give, 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 of its subsidiaries.
(r) No Material Actions or Proceedings. There are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company's
knowledge, threatened (i) against or affecting the Company or its subsidiary,
(ii) which has as the subject thereof any officer or director of, or property
owned or leased by, the Company or its subsidiary or (iii) relating to
environmental or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be determined
adversely to the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result
in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute with the
employees of the Company or its subsidiary exists or, to the best of the
Company's knowledge, is threatened or imminent.
(s) Intellectual Property Rights. The Company and its subsidiaries own or
possess sufficient trademarks, trade names, patent rights, copyrights, domain
names, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to conduct
their businesses as now conducted or as proposed in each of the Disclosure
Package; and the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Except as set forth in the
Disclosure Package and the Prospectus, (a) neither the Company nor its
subsidiary has received any notice of infringement or conflict with asserted
Intellectual Property Rights of others, which infringement or conflict, if the
subject of an unfavorable decision, would result in a Material Adverse Change;
(b) the Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any other person
or entity that are required to be set forth in the Prospectus and are not
described in all material respects; and (c) none of the technology employed by
the Company has been obtained or is being used by the Company in violation of
any contractual obligation binding on the Company.
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(t) All Necessary Permits, etc. The Company and its subsidiary possess such
valid and current licenses, certificates, authorizations or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
(including, without limitation, any insurance regulatory agencies or bodies),
necessary to conduct their respective businesses except where the failure to
hold such permit or obtain such authorization would not result in a Material
Adverse Change, and neither the Company nor its subsidiary has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a Material Adverse Change.
(u) Title to Properties. Each of the Company and its subsidiary has good
and marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1.A.(m) above (or elsewhere in the
Disclosure Package and the Prospectus), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be
made of such property by the Company or the subsidiary. The real property, and
personal property held under lease by the Company or the subsidiary are held
under valid and enforceable leases, with such exceptions as are not material and
do not materially interfere with the use made or proposed to be made of such
real property or personal property by the Company or the subsidiary.
(v) Tax Law Compliance. The Company and its subsidiary have filed all
necessary federal, state, local and foreign income and franchise tax returns in
a timely manner and have paid all taxes required to be paid by any of them and,
if due and payable, any related or similar assessment, fine or penalty levied
against any of them except for any taxes, assessments, fines or penalties as may
be being contested in good faith and by appropriate proceedings except to the
extent that the failure to so file or pay would not reasonably be expected to
result in a Material Adverse Change. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 1.A.(m) above in respect of all federal, state local and foreign income
and franchise taxes for all periods as to which the tax liability of the Company
or its subsidiary has not been finally determined.
(w) Company Not an "Investment Company". The Company is not, and after
receipt of payment for the Common Shares and application of such proceeds in the
manner described in each of the Preliminary Prospectus and the Prospectus under
the caption "Use of Proceeds" will not be, an "investment company" within the
meaning of Investment Company of 1940, as amended (the "Investment Company
Act").
(x) Insurance. Except as otherwise disclosed in the Disclosure Package and
the Prospectus, each of the Company and its subsidiary are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiary against theft, damage, destruction, acts of vandalism and
earthquakes. All policies of insurance and fidelity or surety bonds insuring the
Company or its subsidiary or their respective businesses, assts, employees,
officers and directors are in full force and effect; the Company and its
subsidiary are in compliance with the terms of such policies and instruments in
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all material respects; and there are no claims by the Company or any of its
subsidiary under any such policy or instrument as to which any insurance company
is denying liability or defending under a reservation of rights clause; and
neither the Company nor its subsidiary has been refused any insurance coverage
sought or applied for. The Company has no reason to believe that it or any
subsidiary will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not have a Material Adverse Change. Neither
of the Company nor its subsidiary has been denied any insurance coverage that it
has sought or for which it has applied.
(y) No Restrictions on Dividends. The subsidiary of the Company is not
currently prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's capital stock,
from repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to the
Company, except as described in or contemplated by the Disclosure Package and
the Prospectus.
(z) No Price Stabilization or Manipulation. Neither the Company nor, to
best of its knowledge, any affiliate of the Company have taken nor will the
Company or any affiliate take and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Common Shares.
(aa) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or its subsidiary or any other
person required to be described in the preliminary prospectus or the Prospectus
that have not been described as required.
(bb) Disclosure Controls and Procedures. The Company has established and
maintains disclosure controls and procedures (as such term is defined in Rule
13a-14 under the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated subsidiary, is
made known to the Company's principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared and (ii) are effective in all material respects to perform the
functions for which they were established. The Company is not aware of (a) any
significant deficiency in the design or operation of internal controls which
could adversely affect the Company's ability to record, process, summarize and
report financial data or any material weaknesses in internal controls or (b) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal controls.
(cc) No Material Weakness in Internal Controls. Except as disclosed in the
Prospectus, since the end of the Company's most recent audited fiscal year,
there has been (i) no material weakness in the Company's internal control over
financial reporting (whether or not remediated) and (ii) no change in the
Company's internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
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(dd) Compliance with Money Laundering Laws. The operations of the Company
and RAM Re are and have been conducted at all times in compliance with
applicable money laundering statutes of all jurisdictions in which the Company
or its subsidiary operate (collectively, the "Money Laundering Laws") and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or its subsidiary with
respect to the Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(ee) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(ff) ERISA Compliance. None of the following events has occurred or exists:
(i) a failure to fulfill the obligations, if any, under the minimum funding
standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder with respect to a Plan, determined without regard to
any waiver of such obligations or extension of any amortization period; (ii) an
audit or investigation by the Internal Revenue Service, the U.S. Department of
Labor, the Pension Benefit Guaranty Corporation or any other federal or state
governmental agency or any foreign regulatory agency with respect to the
employment or compensation of employees by any member of the Company that could
have a Material Adverse Change on the Company; or (iii) any breach of any
contractual obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of employees by any
member of the Company that could result in a Material Adverse Change. None of
the following events has occurred or is reasonably likely to occur: (i) a
material increase in the aggregate amount of contributions required to be made
to all Plans in the current fiscal year of the Company compared to the amount of
such contributions made in the Company's most recently completed fiscal year;
(ii) a material increase in the Company's "accumulated post-retirement benefit
obligations" (within the meaning of Statement of Financial Accounting Standards
106) compared to the amount of such obligations in the Company's most recently
completed fiscal year; (iii) any event or condition giving rise to a liability
under Title IV of ERISA that could result in a Material Adverse Change; or (iv)
the filing of a claim by one or more employees or former employees of the
Company related to their employment that could result in a Material Adverse
Change. For purposes of this paragraph, the term "Plan" means a plan (within the
meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to
which any member of the Company may have any liability.
(gg) Brokers. There is no broker, finder or other party that is entitled to
receive from the Company any brokerage or finder's fee or other fee or
commission as a result of any transactions contemplated by this Agreement.
10
(hh) Reinsurance Treaties and Arrangements. All reinsurance treaties,
facultative agreements and other arrangements to which RAM Re is a party are in
full force and effect and neither the Company nor RAM Re is in violation of, or
in default in the performance, observance or fulfillment of, any obligation,
agreement, covenant or condition contained therein, except to the extent that
any such violation or default would not result in, individually or in the
aggregate, a Material Adverse Change. Other than as disclosed in the Prospectus
with respect to annual termination notices, neither the Company nor RAM Re has
received notice from any of the parties to such treaties, contracts or
agreements that such other party intends not to perform in any material respect
such treaty, contract or agreement.
(ii) No Outstanding Loans or Other Indebtedness. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees or indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any of the members
of any of them, except as disclosed in the Prospectus.
(jj) Statistical and Market Related Data. Nothing has come to the attention
of the Company that has caused the Company to believe that the statistical and
market-related data included in the Prospectus is not based on or derived from
sources that are reliable and accurate in all material respects.
(kk) Insurance Laws. Each of the Company and its subsidiaries 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 could not, individually or in the aggregate, result in a
Material Adverse Change. Each of the Company and its subsidiary maintains its
books and records in accordance with the Insurance Laws, except where the
failure to so maintain its books and records could not result in a Material
Adverse Change. Each of the Company and its subsidiary has all other necessary
authorizations, approvals, orders, consents, certificates, permits,
registrations and qualifications of and from all insurance regulatory
authorities necessary to conduct their respective business as described in the
Prospectus except where the failure to have such authorizations, approvals,
orders, consents, certificates, permits registrations or qualifications could
not, individually or in the aggregate, result in a Material Adverse Change. The
Company and its subsidiary have not received any notification from any insurance
regulatory authority to the effect that any additional authorization, approval,
order, consent, certificate, permit, registration or qualification is needed to
be obtained by the Company its subsidiary in any case where it could be
reasonably expected that (x) the Company or its subsidiary would be required
either to obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or to cease or otherwise
limit the writing of certain business and (y) the failure to obtain such
additional authorization, approval, order, consent, certificate, permit,
registration or qualification or the limiting of the writing of such business
could result in a Material Adverse Change; and no insurance regulatory authority
having jurisdiction over the Company or its subsidiary has issued any order or
decree impairing,
11
restricting or prohibiting (i) the payment of dividends by the subsidiary to its
parent, or (ii) the continuation of the business of the Company or the
subsidiary in all material respects as presently conducted.
(ll) Compliance with Laws. The Company has not been advised, and has no
reason to believe, that it and each of its subsidiaries are not conducting
business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, except where failure to be so
in compliance would not result in a Material Adverse Change.
(mm) Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company has taken all
necessary actions to ensure that, upon the effectiveness of the Registration
Statement, it will be in compliance in all material respects with all provisions
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act")
that are then in effect and which the Company is required to comply with as of
the effectiveness of the Registration Statement, and is actively taking steps to
ensure that it will be in compliance with other provisions of the Sarbanes Oxley
Act not currently in effect, upon the effectiveness of such provisions, or which
will become applicable to the Company during Prospectus Delivery Period.
(nn) Accuracy of 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.
(oo) The Company has entered into an amalgamation agreement (merger
agreement) dated [ ], 2006 with Ram Holdings II Ltd, ("Holdings II") pursuant to
which the Company and Holdings II will become amalgamated (merged) effective
immediately prior to the First Closing Date. As of the First Closing Date, the
Company will own all the shares of RAM Re and the Company shall effect a 10 per
1 subdivision of its common shares and the issuance of bonus shares on a 0.3 for
1 basis.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
The Company acknowledges that the Underwriters and, for purposes of the
opinions to be delivered pursuant to Section 5 hereof, counsel to the Company,
counsel to the Selling Shareholders and counsel to the Underwriters, will rely
upon the accuracy and truthfulness of the foregoing representations and hereby
consents to such reliance.
B. Representations and Warranties of the Selling Shareholders. The Selling
Shareholders, represent, warrant and covenant to each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Shareholder.
(b) The Custody Agreement and Power of Attorney. Each of the (i) Custody
Agreement signed by such Selling Shareholder and The Bank of New York, as
custodian (the
12
"Custodian"), relating to the deposit of the Common Shares to be sold by such
Selling Shareholder (the "Custody Agreement") and (ii) Power of Attorney
appointing certain individuals named therein as such Selling Shareholder's
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set forth therein
relating to the transactions contemplated hereby and by the Disclosure Package
or the Prospectus (the "Power of Attorney"), of such Selling Shareholder has
been duly authorized, executed and delivered by such Selling Shareholder and is
a valid and binding agreement of such Selling Shareholder, enforceable in
accordance with its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(c) Obligations of the Selling Shareholders. The Shares represented by the
certificates held in custody for such Selling Shareholder under the Custody
Agreement are subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Shareholder for such custody, and the
appointment by such Selling Shareholder of the Attorneys-in-Fact by the Power of
Attorney, are to that extent irrevocable; the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any individual Selling Shareholder or, in the case of
an estate or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling Shareholder or any such
executor or trustee should die or become incapacitated, or if any such estate or
trust should be terminated, or if any such partnership or corporation should be
dissolved, or if any other such event should occur, before the delivery of the
Common Shares hereunder, certificates representing the Common Shares shall be
delivered by or on behalf of the Selling Shareholders in accordance with the
terms and conditions of this Agreement and of the Custody Agreements; and
actions taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall
be as valid as if such death, incapacity, termination, dissolution or other
event had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such death,
incapacity, termination, dissolution or other event.
(d) Title to Common Shares to be Sold; All Authorizations Obtained. Such
Selling Shareholder has, and on the First Closing Date and any Second Closing
Date will have, good and valid title to all of the Common Shares which may be
sold by such Selling Shareholder pursuant to this Agreement on such date and the
legal right and power, and all authorizations and approvals required by law and
under its charter or bye-laws, partnership agreement, trust agreement or other
organizational documents to enter into this Agreement and its Custody Agreement
and Power of Attorney, to sell, transfer and deliver all of the Common Shares
which may be sold by such Selling Shareholder pursuant to this Agreement and to
comply with its other obligations hereunder and thereunder.
(e) Delivery of the Common Shares to be Sold. Delivery of the Common Shares
which are sold by such Selling Shareholder pursuant to this Agreement will pass
good and valid title to such Common Shares, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or other claim.
13
(f) Non-Contravention; No Further Authorizations or Approvals Required. The
execution and delivery by such Selling Shareholder of, and the performance by
such Selling Shareholder of its obligations under, this Agreement, the Custody
Agreement and the Power of Attorney will not contravene or conflict with, result
in a breach of, or constitute a Default under, or require the consent of any
other party to, the charter or bye-laws, partnership agreement, trust agreement
or other organizational documents of such Selling Shareholder or any other
agreement or instrument to which such Selling Shareholder is a party or by which
it is bound or under which it is entitled to any right or benefit, any provision
of applicable law or any judgment, order, decree or regulation applicable to
such Selling Shareholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Shareholder, except such consents which have been duly obtained or given. No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental authority or agency, is required for the
consummation by such Selling Shareholder of the transactions contemplated in
this Agreement, except such as have been obtained or made and are in full force
and effect under the Securities Act, applicable state securities or blue sky
laws and from the NASD.
(g) No Registration or Other Similar Rights. Such Selling Shareholder does
not have any registration or other similar rights to have any equity or debt
securities registered for sale by the Company under the Registration Statement
or included in the offering contemplated by this Agreement, except for such
rights as are described in the Prospectus under "Shares Eligible for Future
Sale".
(h) No Further Consents, etc. Except for the (i) exercise by such Selling
Shareholder of certain registration rights in connection with the offering
contemplated herein pursuant to the Shareholders Agreement dated as of February
11, 1998, as amended, among the Company, RAM Holdings II Ltd. and the
Shareholders named therein (the "Shareholders Agreement") (which registration
rights have been duly exercised pursuant thereto), (ii) consent of such Selling
Shareholder to the respective number of Common Shares to be sold by all of the
Selling Shareholders pursuant to this Agreement and (iii) waiver by certain
other holders of Common Shares of certain registration rights pursuant to such
Shareholders Agreement, no consent, approval or waiver is required under any
instrument or agreement to which such Selling Shareholder is a party or by which
it is bound or under which it is entitled to any right or benefit, in connection
with the offering, sale or purchase by the Underwriters of any of the Common
Shares which may be sold by such Selling Shareholder under this Agreement or the
consummation by such Selling Shareholder of any of the other transactions
contemplated hereby.
(i) Disclosure Made by Such Selling Shareholder in the Prospectus. All
information furnished by or on behalf of such Selling Shareholder in writing
expressly for use in the Registration Statement, the Prospectus or any free
writing prospectus as defined in Rule 405 of the Securities Act ("Free Writing
Prospectus") or any Issuer Free Writing Prospectus, or any amendment or
supplement thereto used by the Company or any Underwriter, as the case may be,
is, as the Applicable Time, and on the First Closing Date and any Second Closing
Date will be, true, correct and complete in all material respects, and as of the
Applicable Time does not, and on the First Closing Date and any Second Closing
Date will not, contain any untrue statement of a material fact or omit to state
any material fact necessary to make such information not misleading. In
addition, such Selling Shareholder confirms as accurate the number of Common
14
Shares set forth opposite such Selling Shareholder's name in each of the
preliminary prospectus and the Prospectus under the caption "Principal and
Selling Shareholders" (both prior to and after giving effect to the sale of the
Common Shares).
(j) No Price Stabilization or Manipulation. Such Selling Shareholder has
not taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Common Shares.
(k) No Inside Information. Such Selling Shareholder is not prompted to sell
the Common Shares by any information concerning the Company which is not set
forth in the Registration Statement and the Disclosure Package.
(l) No Free Writing Prospectuses. Such Selling Shareholder represents that
it has not prepared or had prepared on its behalf or used or referred to, any
Free Writing Prospectus, or any Issuer Free Writing Prospectus and represents
that it has not distributed any written materials in connection with the offer
or sale of the Common Shares.
(m) Restriction on Sale of Securities. During a period of 180 days from the
date of the Prospectus, such Selling Shareholders will not, without the prior
written consent of the Representatives, (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 to purchase or otherwise transfer or
dispose of, directly or indirectly, any share of Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares or file, or
cause to be filed, any registration statement under the 1933 Act with respect to
any of the foregoing 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 Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to the Securities to be sold hereunder. Notwithstanding
the foregoing, if (x) during the last 17 days of the 180-day restricted period
the Company issues an earnings release or material news or a material event
relating to the Company occurs, or (y) prior to the expiration of the 180-day
restricted period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the 180-day period, the
restrictions imposed herein shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
(n) No Association with NASD. Other than as disclosed in writing to the
Representatives and in the Prospectus, neither the Selling Shareholder nor any
of its affiliates directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or is a person
associated with (within the meaning of Article I (dd) of the Bye-laws of the
National Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
Any certificate signed by or on behalf of any Selling Shareholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Shareholder to each
Underwriter as to the matters covered thereby.
15
Such Selling Shareholder acknowledges that the Underwriters and, for
purposes of the opinion to be delivered pursuant to Section 5 hereof, counsel to
the Company, counsel to the Selling Shareholders and counsel to the
Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
SECTION 2. Purchase, Sale and Delivery of the Common Shares.
(a) The Firm Common Shares. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
[___] Firm Common Shares and (ii) the Selling Shareholders agree to sell to the
several Underwriters an aggregate of [___] Firm Common Shares, each Selling
Shareholder selling the number of Firm Common Shares set forth opposite such
Selling Shareholder's name on Schedule B. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase from the Company and the Selling Shareholders the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company and the Selling Shareholders shall be $[___] per
share.
(b) The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of BAS, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ (or such other place as may
be agreed to by the Company and the Representatives) at 9:00 a.m. New York time,
on [_] May, 2006, or such other time and date not later than 1:30 p. m. New York
time, on [_] May, 2006 as agreed between the Representatives and the Company
(the time and date of such closing are called the "First Closing Date"). The
Company and the Selling Shareholders hereby acknowledge that circumstances under
which the Representatives may provide notice to postpone the First Closing Date
as originally scheduled include, but are in no way limited to, any determination
by the Company, the Selling Shareholders or the Representatives to recirculate
to the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10.
(c) The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Selling
Shareholders hereby grant an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of [___] Optional Common Shares
from the Selling Shareholders at the purchase price per share to be paid by the
Underwriters for the Firm Common Shares. The option granted hereunder is for use
by the Underwriters solely in covering any over-allotments in connection with
the sale and distribution of the Firm Common Shares. The option granted
hereunder may be exercised at any time (but not more than once) upon notice by
the Representatives to the Company and the Selling Shareholders, which notice
may be given at any time within 30 days from the date of this Agreement. Such
notice shall set forth (i) the aggregate number of Optional Common Shares as to
which the Underwriters are exercising the option, (ii) the names and
denominations in which the certificates for the Optional Common Shares are to be
registered and (iii) the time, date and place at which such certificates will be
delivered (which time and date may be simultaneous with, but not earlier than,
the First Closing Date; and in such case the term "First Closing Date" shall
refer to the time and date of delivery of certificates for the Firm Common
Shares and the
16
Optional Common Shares). Such time and date of delivery, if subsequent to the
First Closing Date, is called the "Second Closing Date" and shall be determined
by the Representatives and shall not be earlier than three nor later than five
full business days after delivery of such notice of exercise. If any Optional
Common Shares are to be purchased, and each Underwriter agrees, severally and
not jointly, to purchase the number of Optional Common Shares (subject to such
adjustments to eliminate fractional shares as the Representatives may determine)
that bears the same proportion to the total number of Optional Common Shares to
be purchased as the number of Firm Common Shares set forth on Schedule A
opposite the name of such Underwriter bears to the total number of Firm Common
Shares and (b) each Selling Shareholder agrees severally and not jointly to sell
the number of Optional Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine that bears the same
proportion to the total number of Optional Shares to be sold as the number of
Optional Shares set forth in Schedule B opposite the name of such Selling
Shareholder).
(d) Public Offering of the Common Shares. The Representatives hereby advise
the Company and the Selling Shareholders that the Underwriters intend to offer
for sale to the public, as described in the Prospectus, their respective
portions of the Common Shares as soon after this Agreement has been executed and
the Registration Statement has been declared effective as the Representatives,
in their sole judgment, have determined is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Common Shares to be sold
by the Company shall be made at the First Closing Date by wire transfer of
immediately available funds to the order of the Company. Payment for the Common
Shares to be sold by the Selling Shareholders shall be made at the First Closing
Date (and, if applicable, at the Second Closing Date) by wire transfer of
immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for their
own account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
The Representatives, individually and not as Representatives of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Each Selling Shareholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Common Shares to be sold by such Selling Shareholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Shareholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Shareholder hereunder and to hold such amounts for the account of such
Selling Shareholder with the Custodian under the Custody Agreement.
(f) Delivery of the Common Shares. The Company and the Selling Shareholders
shall deliver, or cause to be delivered, to the Representatives for the accounts
of the several
17
Underwriters certificates for the Firm Common Shares to be sold by them at the
First Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor. Each
Selling Shareholder shall also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase at the First
Closing Date or the Second Closing Date, as the case may be, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The certificates for the Common Shares
shall be in definitive form and registered in such names and denominations as
the Representatives shall have requested at least two full business days prior
to the First Closing Date (or the Second Closing Date, as the case may be) and
shall be made available for inspection on the business day preceding the First
Closing Date (or the Second Closing Date, as the case may be) at a location in
New York City as the Representatives may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are first
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representatives shall request.
(h) Appointment of a Qualified Independent Underwriter. The Company and the
Selling Shareholders hereby confirm their engagement of ▇▇▇▇▇▇▇ ▇▇▇▇▇ as, and
▇▇▇▇▇▇▇ ▇▇▇▇▇ hereby confirms its agreement with the Company and the Selling
Shareholder(s) to render services as, a "qualified independent underwriter"
within the meaning of Rule 2720 of the Conduct Rules of the National Association
of Securities Dealers, Inc. with respect to the offering and sale of Securities.
▇▇▇▇▇▇▇ ▇▇▇▇▇, solely in its capacity as qualified independent underwriter and
not otherwise, is referred to herein as the "Independent Underwriter."
SECTION 3. Additional Covenants of the Company.
A. Covenants of the Company. The Company further covenants and agrees with
each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and Supplements. During
the period beginning on the Applicable Time and ending on the later of the
Closing Date or such date, as in the opinion of counsel for the Underwriters,
the Prospectus is no longer required by law to be delivered in connection with
sales by an Underwriter or dealer, including in circumstances where such
requirement may be satisfied pursuant to Rule 172 (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement, the
Disclosure Package or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file or use any such proposed amendment or supplement
to which the Representatives reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any
18
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to any preliminary prospectus or the Prospectus, (iii)
of the time and date that any post-effective amendment to the Registration
Statement becomes effective and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of any order preventing or suspending the
use of any preliminary prospectus or the Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Common Shares from
any securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop order or
order or notice of prevention or suspension at any time, the Company will use
its reasonable best efforts to obtain the lifting of such order at the earliest
possible moment or will file a new registration statement and use its reasonable
best efforts to have such registration statement declared effective as soon as
practicable. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b) and 430A, as applicable, under the Securities Act
including with respect to the timely filing of documents thereunder, and will
use its reasonable efforts to confirm that any filings made by the Company under
such Rule 424(b) were received in a timely manner by the Commission.
(c) Exchange Act Compliance. During the Prospectus Delivery Period, the
Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act in the manner and within
the time periods required by the Exchange Act.
(d) Amendments and Supplements to the Registration Statement, Prospectus
and Other Securities Act Matters. If, during the Prospectus Delivery Period, any
event or development shall occur or condition exist as a result of which in the
reasonable judgment of the Company or the reasonable opinion of the
Representatives the Disclosure Package or the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein in the
light of the circumstances under which they were made or then prevailing, as the
case may be, not misleading, or if it shall be necessary in the reasonable
judgment of the Company or the reasonable opinion of the Representatives to
amend or supplement the Disclosure Package or the Prospectus, or to file under
the Exchange Act any document incorporated by reference in the Disclosure
Package or the Prospectus, in order to make the statements therein, in the light
of the circumstances under which they were made or then prevailing, as the case
may be, not misleading, or if in the reasonable opinion of the Representatives
it is otherwise necessary to amend or supplement the Registration Statement, the
Disclosure Package or the Prospectus, or to file under the Exchange Act any
document incorporated by reference in the Disclosure Package or the Prospectus,
or to file a new registration statement containing the Prospectus, in order to
comply with law, including in connection with the delivery of the Prospectus,
the Company agrees to (i) notify the Representatives of any such event or
condition and (ii) promptly prepare (subject to Section 3(A)(a) and 3(A)(e)
hereof), file with the Commission (and use its best efforts to have any
amendment to the Registration Statement or any new registration statement to be
declared effective) and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Registration Statement, the Disclosure
Package or the Prospectus, or any new registration statement, necessary in order
to make the statements in the Disclosure Package or the Prospectus as so amended
or supplemented, in the light of the
19
circumstances under which they were made or then prevailing, as the case may be,
not misleading or so that the Registration Statement, the Disclosure Package or
the Prospectus, as amended or supplemented, will comply with the Securities Act
and the rules and regulations thereunder.
(e) Permitted Free Writing Prospectuses. Other than as identified in
Schedule C hereto, the Company represents that it has not made, and agrees that,
unless it obtains the prior written consent of the Representatives, it will not
make, any offer relating to the Common Shares that would constitute an Issuer
Free Writing Prospectus or that would otherwise constitute a "free writing
prospectus" (as defined in Rule 405 of the Securities Act) required to be filed
by the Company with the Commission or retained by the Company under Rule 433 of
the Securities Act; provided that the prior written consent of the
Representatives hereto shall be deemed to have been given in respect of the Free
Writing Prospectuses included in Schedule B hereto. Any such free writing
prospectus consented to by the Representatives is hereinafter referred to as a
"Permitted Free Writing Prospectus". The Company agrees that (i) it has treated
and will treat, as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus, and (ii) it has complied and will comply, as the
case may be, with the requirements of Rules 164 and 433 of the Securities Act
applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.
(f) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish the Representatives, without charge, during the Prospectus
Delivery Period, as many copies of the Prospectus and any amendments and
supplements thereto (including any document incorporated or deemed to be
incorporated by reference therein) and the Disclosure Package as the
Representatives may reasonably request.
(g) Copies of the Registration Statement and the Prospectus. The Company
will furnish to the Representatives and counsel for the Underwriters signed
copies of the Registration Statement (including exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of the most recently amended or supplemented preliminary
prospectus immediately prior to the Applicable Time, the Prospectus and any
supplement thereto and the Disclosure Package as the Representatives may
reasonably request.
(h) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws, insurance securities laws, or Canadian
provincial Securities laws or other foreign laws of those jurisdictions
designated by the Representatives, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as
required for the distribution of the Common Shares. The Company shall not be
required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Representatives promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Common Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification,
20
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(i) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Common Shares sold by it in the manner described under the caption "Use
of Proceeds" in each of the Disclosure Package and the Prospectus.
(j) Transfer Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Shares.
(k) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending [___], 2007 that satisfies the provisions of Section 11(a) of the
Securities Act
(l) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with The Nasdaq National Market all
reports and documents required to be filed in accordance with the rules of The
Nasdaq National Market. Additionally, the Company shall report the use of
proceeds from the issuance of the Common Shares as may be required under Rule
463 under the Securities Act.
(m) Company to Provide Interim Financial Statements. Prior to the Closing
Date, the Company will furnish the Underwriters, as soon as they have been
prepared by or are available to the Company, a copy of any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the Registration
Statement and the Prospectus.
(n) Listing. The Company will use its best efforts to list, subject to
notice of issuance, the Common Shares on The Nasdaq National Market.
(o) Agreement Not to Offer or Sell Additional Securities. During the period
commencing on the date hereof and ending on the 180th day following the date of
the Prospectus, the Company will not, without the prior written consent of the
Representatives (which consent may be withheld at the sole discretion of the
Representatives), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer, or announce the offering of, or file any registration statement
under the Securities Act, other than one or more registration statements on Form
S-8, in respect of, any Common Shares, options or warrants to acquire the Common
Shares or securities exchangeable or exercisable for or convertible into Common
Shares (other than as contemplated by this Agreement with respect to the Common
Shares); provided, however, that the Company may issue its Common Shares or
options to purchase its Common Shares, or Common Shares upon exercise of
options, pursuant to any stock option, stock bonus or other stock plan or
arrangement described in the Prospectus, only if any such option issued by the
Company does not vest during the 180-day period (other than accelerated vesting
in accordance with the terms of forms of award agreement filed as an exhibit to
the Registration Statement). Notwithstanding the foregoing, if (x) during the
last 17 days of the 180-day restricted period the Company issues
21
an earnings release or material news or a material event relating to the Company
occurs or (y) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed by
this section 3(A)(o) shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of
the material news or material event.
(p) Future Reports to the Representatives. During the period of three years
hereafter the Company will furnish to the extent such information is not
available on the Commission's website or the Company's website or make
electronically available to the Representatives at (I) Banc of America
Securities LLC, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: [___] and
(II) ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, 4 World Financial
Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: [____] (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.
(q) No Manipulation of Price. The Company will not take, directly or
indirectly, prior to completion of the distribution of the common shares, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
(r) Existing Lock-Up Agreements. The Company will enforce all existing
agreements between the Company and any of its security holders that prohibit the
sale, transfer, assignment, pledge or hypothecation of any of the Company's
securities in connection with the Company's initial public offering. In
addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such
existing "lock-up" agreements for the duration of the periods contemplated in
such agreements.
B. Covenants of the Selling Shareholders. Each Selling Shareholder further
covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such Selling
Shareholder will not, without the prior written consent of the Representatives
(which consent may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell (including without limitation
any short sale), pledge, transfer, establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of or transfer any Common Shares, options or warrants to acquire Common Shares,
or securities exchangeable or exercisable for or convertible into Common Shares
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under Securities Exchange Act of 1934, as amended) by the
undersigned, or publicly announce the undersigned's intention to do any of the
foregoing, for a period commencing on the date hereof and continuing
22
through the close of trading on the date 180 days after the date of the
Prospectus, other than as expressly provided pursuant to the lock-up agreement
attached hereto as Exhibit C. Notwithstanding the foregoing, if (x) during the
last 17 days of the 180-day restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs, or
(y) prior to the expiration of the 180-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed herein
shall continue to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the occurrence of the material news or
material event.
(b) Delivery of Forms W-8 and W-9. To deliver to the Representatives
prior to the First Closing Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Shareholder is a non-United States
person) or Form W-9 (if the Selling Shareholder is a United States Person).
(c) Notification of Material Changes. During the Prospectus Delivery
Period, such Selling Shareholder will advise the Representatives promptly, and
if requested by the Representatives, will confirm such advice in writing, of any
change in information in the Registration Statement, the Prospectus or any Free
Writing Prospectus or any amendment or supplement thereto relating to such
Selling Shareholder or any new material information relating to the Company or
relating to any matter stated in the Prospectus or any Free Writing Prospectus
or any amendment or supplement thereto which comes to the attention of such
Selling Shareholder.
(d) No Free Writing Prospectuses. Such Selling Shareholder agrees that
it will not prepare or have prepared on its behalf or use or refer to, any Free
Writing Prospectus or Issuer Free Writing Prospectus, and agrees that it will
not distribute any written materials in connection with the offer or sale of the
Securities.
The Representatives, on behalf of the several Underwriters, may, in their
sole discretion, waive in writing the performance by the Company or any Selling
Shareholder of any one or more of the foregoing covenants or extend the time for
their performance. Notwithstanding the foregoing, the Representatives agree not
to consent to any action proposed to be taken by the Company, any Selling
Shareholder or any other holder of the Company's securities that would otherwise
be prohibited by, or to waive compliance by the Company, any Selling Shareholder
or any such other security holder with the provisions of, Section 3A(m) or 3B(a)
above or any lock-up agreement delivered pursuant to Section 5(l) below without
giving each of the other Underwriters at least 17 days prior notice (or such
shorter notice as each of the other Underwriters may deem acceptable to permit
compliance with applicable provisions of NASD Conduct Rule 2711(f) restricting
publication and distribution of research and public appearances by research
analysts before and after the expiration, waiver or termination of a lock-up
agreement).
SECTION 4. Payment of Expenses. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its and the Selling
Shareholders' obligations hereunder and in connection with the transactions
contemplated hereby, including without limitation (i) all expenses incident to
the issuance and delivery of the Common Shares
23
(including all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Common Shares, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Common Shares to the Underwriters, (iv) all fees and expenses of the Company's
counsel, the Selling Shareholders' counsel, independent public or certified
public accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each Issuer Free Writing Prospectus, each
preliminary prospectus and the Prospectus, and all amendments and supplements
thereto, and this Agreement, (vi) all filing fees, attorneys' fees (such
attorneys' fees not to exceed $10,000) and expenses incurred by the Company or
the Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under the state securities or blue sky laws or
the provincial securities laws of Canada, and, if requested by the
Representatives, preparing and printing a "Blue Sky Survey" or memorandum, and
any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the
reasonable fees and expenses of counsel (such fees and expenses of counsel not
to exceed $35,000) for the Underwriters in connection with, the NASD's review
and approval of the Underwriters' participation in the offering and distribution
of the Common Shares, (viii) the fees and expenses associated with listing the
Common Shares on The Nasdaq National Market (ix) all the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the Securities, including without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, and the Company's
proportional share of the cost of aircraft and other transportation chartered in
connection with the road show, (x) other fees, costs and expenses referred to in
Item 13 of Part II of the Registration Statement. Except as provided in this
Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.
The Selling Shareholders further agree with each Underwriter, jointly and
severally, to pay (directly or by reimbursement) all fees and expenses incident
to the performance of their obligations under this Agreement which are not
otherwise specifically provided for herein or in the Shareholders Agreement,
including but not limited to (i) fees and expenses of counsel and other advisors
for such Selling Shareholders, (ii) fees and expenses of the Custodian and (iii)
expenses, and stamp duties, capital duties and stock transfer taxes, if any,
incident to the sale and delivery of the Common Shares to be sold by such
Selling Shareholders to the Underwriters hereunder (which taxes, if any, may be
deducted by the Custodian under the provisions of Section 2 of this Agreement).
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Shareholders, on the other hand.
SECTION 5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall
24
be subject to the accuracy of the representations and warranties on the part of
the Company and the Selling Shareholders set forth in Sections 1(A) and 1(B)
hereof, respectively, as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Optional Common Shares, as of the
First Closing Date or the Second Closing Date, as applicable, as though then
made, to the timely performance by the Company and the Selling Shareholders of
their respective covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) Accountants' Comfort Letter.
On the date hereof, the Representatives shall have received from
PricewaterhouseCoopers LLP (Bermuda), independent public or certified public
accountants for the Company, a letter dated the date hereof addressed to the
Underwriters, in form and substance satisfactory to the Representatives,
containing statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters with respect to the audited and
unaudited financial statements and certain financial information contained in
the Registration Statement and the Prospectus (and the Representatives shall
have received an additional six conformed copies of such accountants' letter for
each of the several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment
to the Registration Statement containing the information required by such
Rule 430A, and such post-effective amendment shall have become effective;
(ii) all material required to be filed by the Company pursuant to
Rule 433(d) under the Securities Act shall have been filed with the
Commission within the applicable time periods prescribed for such filings
under such Rule 433;
(iii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment to the Registration Statement,
shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iv) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the First Closing Date or the
Second Closing Date, as applicable:
(i) in the judgment of the Representatives there shall not have
occurred any Material Adverse Change; and
25
(ii) there shall not have been any change or decrease specified in
the letter or letters referred to in paragraph (a) of Section 5 which is,
in the sole judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or
delivery of the Common Shares as contemplated by the Registration
Statement and the Prospectus; and
(iii) occurred any downgrading, nor shall any notice have been given
of any intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in the
rating accorded any securities of the Company or the financial strength
rating of RAM Re by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(d) Opinion of Bermuda Counsel for the Company. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received the favorable opinion of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Bermuda counsel for
the Company, dated as of such Closing Date, the form of which is attached as
Exhibit A-1 (and the Representatives shall have received an additional [___]
conformed copies of such counsel's legal opinion for each of the several
Underwriters).
(e) Opinion of New York Counsel for the Company. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received the favorable opinion of ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇
counsel for the Company, dated as of such Closing Date, the form of which is
attached as Exhibit A-2 (and the Representatives shall have received an
additional six conformed copies of such counsel's legal opinion for each of the
several Underwriters).
(f) Opinion of Counsel for the Underwriters. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received the favorable opinion of Shearman & Sterling LLP, counsel for the
Underwriters, dated as of such Closing Date, in form and substance satisfactory
to, and addressed to, the Representatives, with respect to the issuance and sale
of the Common Shares, the Registration Statement, the Prospectus (together with
any supplement thereto), the Disclosure Package and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(g) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration Statement,
the Prospectus and any amendment or supplement thereto, any Issuer Free Writing
Prospectus and any amendment or supplement thereto and this Agreement, to the
effect set forth in subsections (b)(i)-(iii) and (c)(iii) of this Section 5, and
further to the effect that:
(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any Material Adverse
Change;
26
(ii) the representations, warranties and covenants of the Company
set forth in Section 1(A) of this Agreement are true and correct with the
same force and effect as though expressly made on and as of such Closing
Date; and
(iii) the Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(h) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date, the Representatives shall have received from
PricewaterhouseCoopers LLP (Bermuda), each independent public or certified
public accountants for the Company, letters dated such date, in form and
substance satisfactory to the Representatives, to the effect that they reaffirm
the statements made in the letters furnished by each of them pursuant to
subsection (a) of this Section 5, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business
days prior to the First Closing Date or Second Closing Date, as the case may be
(and the Representatives shall have received an additional six conformed copies
of each such accountants' letter for each of the several Underwriters).
(i) Opinion of Counsel for the Selling Shareholders. On each of the
First Closing Date and the Second Closing Date, the Representatives shall have
received the favorable opinion of [___], counsel for the Selling Shareholders,
dated as of such Closing Date, the form of which is attached as Exhibit B (and
the Representatives shall have received an additional six conformed copies of
such counsel's legal opinion for each of the several Underwriters). [To be
updated once various selling shareholders' counsels opinions provided]
(j) Selling Shareholders' Certificate. On each of the First Closing Date
and the Second Closing Date, the Representatives shall receive a written
certificate executed by the Attorney-in-Fact of each Selling Shareholder, dated
as of such Closing Date, to the effect that:
(i) the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus
and any amendment or supplement thereto and this Agreement, and that the
representations, warranties and covenants of such Selling Shareholder set
forth in Section 1(B) of this Agreement are true and correct with the same
force and effect as though expressly made by such Selling Shareholder on
and as of such Closing Date; and
(ii) such Selling Shareholder has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to such Closing Date.
(k) Selling Shareholders' Documents. On the date hereof, the Company and
the Selling Shareholders shall have furnished for review by the Representatives
copies of the Powers of Attorney and Custody Agreements executed by each of the
Selling Shareholders and such further information, certificates and documents as
the Representatives may reasonably request.
(l) Lock-Up Agreement from Certain Securityholders of the Company Other
Than Selling Shareholders. On or prior to the date hereof, the Company shall
have furnished to the Representatives an agreement in the form of Exhibit C
hereto from each director and officer of the Company and each beneficial owner
of Common Shares listed on Schedule E (as defined and
27
determined according to Rule 13d-3 under the Exchange Act, except that a one
hundred eighty day period shall be used rather than the sixty day period set
forth therein), and such agreement shall be in full force and effect on each of
the First Closing Date and the Second Closing Date.
(m) Listing of Shares. The Common Shares shall have been listed and
admitted and authorized for quotation on The Nasdaq National Market, and
satisfactory evidence of such actions shall have been provided to the
Representatives.
(n) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, the Representatives and counsel for the
Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Common Shares as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Shareholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5, Section 7, Section 10,
Section 11 or Section 17, or if the sale to the Underwriters of the Common
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Shareholders to
perform any agreement herein or to comply with any provision hereof, the Company
agrees to reimburse the Representatives and the other Underwriters (or such
Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Representatives and the Underwriters in connection
with the proposed purchase and the offering and sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
SECTION 7. Effectiveness of this Agreement. This Agreement shall not
become effective until the later of (i) the execution of this Agreement by the
parties hereto and (ii) notification by the Commission to the Company and the
Representatives of the effectiveness of the Registration Statement under the
Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company or the Selling Shareholders to
any Underwriter, except that the Company and the Selling Shareholders shall be
obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Sections 4 and 6 hereof, (b) of any Underwriter to the Company or
the Selling Shareholders, or (c) of any party hereto to any other party except
that the provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
28
SECTION 8. Indemnification.
(a) Indemnification of the Underwriters by the Company. The Company
agrees to indemnify and hold harmless each Underwriter, its directors, officers,
employees and agents, affiliates and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A, Rule 430B or Rule 430C under
the Securities Act, 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 (ii) upon any untrue statement or alleged untrue statement of
a material fact contained in any Issuer Free Writing Prospectus, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or any
prospectus wrapper material distributed in Canada, or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and to reimburse each Underwriter, its officers, directors,
employees, agents and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by the Representatives)
as such expenses are reasonably incurred by such Underwriter, or its officers,
directors, employees and agents or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by the Representatives expressly for use in the Registration
Statement, any Issuer Free Writing Prospectus, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto). The indemnity agreement set
forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Underwriters by the Selling Shareholders.
Each of the Selling Shareholders, severally and not jointly, agrees to indemnify
and hold harmless each Underwriter, its directors, officers, employees and
agents, affiliates and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any loss, claim, damage, liability or expense, as incurred, to which
such Underwriter or such controlling person may become subject, insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to Rule 430A, Rule 430B or Rule 430C under the Securities
Act, 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
in each case described in clause (i) or (ii), to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder expressly for
use therein; or
29
(ii) upon any untrue statement or alleged untrue statement of a material fact
contained in any Issuer Free Writing Prospectus, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or any prospectus
wrapper material distributed in Canada in connection with the reservation and
sale of Directed Shares to the DSP Participants, 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, in each case described in clause (i) or (ii), to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder
expressly for use therein; and to reimburse each Underwriter, its officers,
directors, employees, agents and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by the
Representatives) as such expenses are reasonably incurred by such Underwriter,
or its officers, directors, employees and agents or such controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Representatives expressly for use in
the Registration Statement, any Issuer Free Writing Prospectus, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) and,
provide further that any liabilities that each Selling Shareholder shall have
under this Section 8(b) shall not exceed the gross proceeds of the Offering
received by such Selling Shareholder. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that the Company and the
Selling Shareholder may otherwise have.
(c) Indemnification of the Company, its Directors and Officers and the
Selling Shareholders. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, each Selling Shareholder and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any loss, claim, damage, liability or expense, as incurred, to
which the Company, or any such director, officer, Selling Shareholder or
controlling person may become subject, insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, and only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Issuer Free Writing Prospectus, 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 and the Selling
Shareholders by the Representatives expressly for use therein; and to reimburse
the Company, or any such director, officer, Selling Shareholder or controlling
person for any legal and other expense reasonably incurred by the Company, or
any such director, officer, Selling Shareholder or controlling person in
connection with investigating, defending, settling,
30
compromising or paying any such loss, claim, damage, liability, expense or
action. Each of the Company and the Selling Shareholders, hereby acknowledges
that the only information that the Underwriters have furnished to the Company
and the Selling Shareholders expressly for use in the Registration Statement,
any Issuer Free Writing Prospectus, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) are the statements under the caption
"Underwriting" in the Prospectus (A) concerning stabilization and passive market
making by the Underwriters, (B) concerning concessions and reallowances, (C)
under the subcaption "Stabilization," and (D) under the subcaption "Online
Offering". The indemnity agreement set forth in this Section 8(c) shall be in
addition to any liabilities that each Underwriter may otherwise have.
(d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof; but the failure
to so notify the indemnifying party (i) will not relieve it from liability under
paragraph (a), (b) or (c) above unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any liability other than the
indemnification obligation provided in paragraph (a), (b) or (c) above. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (other than local counsel),
reasonably approved by the indemnifying party (or by the Representatives in the
case of Section 9), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
31
(e) Settlements. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (i) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding 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.
(f) Indemnification of the QIU. Without limitation and in addition to
its obligation under the other subsections of this Section 8, the Company agrees
to indemnify and hold harmless the QIU and each person, if any, who controls the
QIU within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any loss, claim, damage, liabilities or expense,
as incurred, arising out of or based upon the QIU's acting as a "qualified
independent underwriter" (within the meaning of Rule 2720 to the NASD's Conduct
Rules) in connection with the offering contemplated by this Agreement, and
agrees to reimburse each such indemnified person for any legal or other expense
reasonably incurred by them in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
expense results from the gross negligence or willful misconduct of the QIU.
SECTION 9. Contribution. If the indemnification provided for in Section 8
is for any reason unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders, on the one hand,
and the Underwriters, the QIU or the DSP Underwriter, on the other hand, from
the offering of the Common Shares pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholders, on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein, which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
32
considerations. The relative benefits received by the Company and the Selling
Shareholders, on the one hand, and the Underwriters, the QIU or the DSP
Underwriter, on the other hand, in connection with the offering of the Common
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Common Shares
pursuant to this Agreement (before deducting expenses) received by the Company
and the Selling Shareholders, and the total underwriting discount received by
the Underwriters and the fee to the DSP Underwriter, in each case as set forth
on the front cover page of the Prospectus bear to the aggregate initial public
offering price of the Common Shares as set forth on such cover. The relative
fault of the Company and the Selling Shareholders, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact or any such
inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company or the Selling Shareholders, on the one
hand, or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
33
SECTION 10. Default of One or More of the Several Underwriters. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Common Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. Termination of this Agreement. Prior to the First Closing
Date, this Agreement may be terminated by the Representatives by notice given to
the Company and the Selling Shareholders if at any time (i) trading or quotation
in any of the Company's securities shall have been suspended or limited by the
Commission or by the Nasdaq Stock Market, Inc., or trading in securities
generally on either the Nasdaq Stock Market or the New York Stock Exchange shall
have been suspended or limited, or minimum or maximum prices shall have been
generally established on any of such stock exchanges by the Commission or the
NASD; (ii) a general banking moratorium shall have been declared by any of
federal, New York or California authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States has occurred; or (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions, as
in the judgment of the Representatives is material and adverse and makes it
impracticable or inadvisable to market the Common Shares in the manner and on
the terms described in the Prospectus or to enforce contracts for the sale of
the Common Shares; (iv) since the respective dates as of which information is
given in the Registration Statement, the
34
Prospectus or the Disclosure Package, there shall have occurred any Material
Adverse Change; or (v) the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as in the
judgment of the Representatives may interfere materially with the conduct of the
business and operations of the Company regardless of whether or not such loss
shall have been insured. Any termination pursuant to this Section 11 shall be
without liability on the part of (a) the Company or the Selling Shareholders to
any Underwriter, except that the Company and the Selling Shareholders shall be
obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the Company or the
Selling Shareholders, or (c) of any party hereto to any other party except that
the provisions of Section 8 and Section 9 shall at all times be effective and
shall survive such termination.
SECTION 12. No Advisory or Fiduciary Responsibility. Each of the Company
and the Selling Shareholders acknowledges and agrees that: (i) the purchase and
sale of the Securities pursuant to this Agreement, including the determination
of the public offering price of the Securities and any related discounts and
commissions, is an arm's-length commercial transaction between the Company and
the Selling Shareholders, on the one hand, and the several Underwriters, on the
other hand, and the Company and the Selling Shareholders are capable of
evaluating and understanding and understand and accept the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction each Underwriter is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary of the Company, the Selling
Shareholders or their respective affiliates, stockholders, creditors or
employees or any other party; (iii) no Underwriter has assumed or will assume an
advisory, agency or fiduciary responsibility in favor of the Company or the
Selling Shareholders with respect to any of the transactions contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter has
advised or is currently advising the Company or the Selling Shareholders on
other matters) and no Underwriter has any obligation to the Company or the
Selling Shareholders with respect to the offering contemplated hereby except the
obligations expressly set forth in this Agreement; (iv) the several Underwriters
and their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company and the Selling
Shareholders and that the several Underwriters have no obligation to disclose
any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and
the Company and the Selling Shareholders have consulted their own legal,
accounting, regulatory and tax advisors to the extent they deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company, the Selling Shareholders on the one hand
and the several Underwriters on the other hand, or any of them, with respect to
the subject matter hereof. The Company and the Selling Shareholders hereby waive
and release, to the fullest extent permitted by law, any claims that the Company
and the Selling Shareholders may have against the several Underwriters with
respect to any breach or alleged breach of agency or fiduciary duty.
SECTION 13. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its
35
officers, of the Selling Shareholders and of the several Underwriters set forth
in or made pursuant to this Agreement (i) will remain operative and in full
force and effect, regardless of any (A) investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the QIU, the officers
or employees of any Underwriter or the QIU, or the Company, the officers or
employees of the Company, any person controlling the Company, any Selling
Shareholder or any person controlling such Selling Shareholder, as the case may
be or (B) acceptance of the Common Shares and payment for them hereunder and any
termination of this Agreement.
SECTION 14. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
IF TO THE REPRESENTATIVES:
Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Legal Department
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
4 World Financial Center, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: [ ]
Attention: [ ]
with copies to:
Shearman & Sterling LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
IF TO THE COMPANY:
RAM Holdings Ltd.
RAM Re ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Guest
36
With a copy to:
Leboeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
IF TO THE SELLING SHAREHOLDERS:
The Bank of New York
Escrow Unit, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: [ ]
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to:
Sidley Austin LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
SECTION 15. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of (i) the Company, its directors, any
person who controls the Company within the meaning of the Securities Act and the
Exchange Act and any officer of the Company who signs the Registration
Statement, (ii) the Selling Shareholders, (iii) the Underwriters, the officers,
directors, employees and agents of the Underwriters, and each person, if any,
who controls any Underwriter within the meaning of the Securities Act and the
Exchange Act, (iv) the QIU, the QIU's officers, directors, employees and agents,
and each person, if any, who controls the QIU within the meaning of the
Securities Act and the Exchange Act,] and (v) the respective successors and
assigns of any of the above, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Common Shares from any of the several Underwriters
merely because of such purchase.
SECTION 16. Partial Unenforceability. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
37
SECTION 17. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(a) Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
("Related Proceedings") may be instituted in the federal courts of the United
States of America located in the City and County of New York or the courts of
the State of New York in each case located in the City and County of New York
(collectively, the "Specified Courts"), and each party irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum. Each party not located in the United States
irrevocably appoints CT Corporation System, as its agent to receive service of
process or other legal summons for purposes of any such suit, action or
proceeding that may be instituted in any state or federal court in the City and
County of New York.
(b) Waiver of Immunity. With respect to any Related Proceeding, each party
irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
SECTION 18. Failure of One or More of the Selling Shareholders to Sell and
Deliver Common Shares. If one or more of the Selling Shareholders shall fail to
sell and deliver to the Underwriters the Common Shares to be sold and delivered
by such Selling Shareholders at the First Closing Date pursuant to this
Agreement, then the Underwriters may at their option, by written notice from the
Representatives to the Company and the Selling Shareholders terminate this
Agreement without any liability on the part of any Underwriter or, except as
provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Shareholders. If one or more of the Selling Shareholders shall fail to sell and
deliver to the Underwriters the Common Shares to be sold and delivered by such
Selling Shareholders pursuant to this Agreement at the First Closing Date or the
Second Closing Date, then the Underwriters shall have the right, by written
notice from the Representatives to the Company and the Selling Shareholders, to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
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SECTION 19. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Shareholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the officers or employees of any Underwriter, any person
controlling any Underwriter, the Company, the officers or employees of the
Company, or any person controlling the Company, any Selling Shareholder or any
person controlling such Selling Shareholder, (ii) acceptance of the Common
Shares and payment for them hereunder and (iii) termination of this Agreement.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Selling
Shareholders, the Underwriters, the Underwriters' officers and employees, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Common Shares from any of the several Underwriters merely because of
such purchase.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company and the Custodian the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof,
shall become a binding agreement in accordance with its terms.
Very truly yours,
RAM HOLDINGS LTD.
By:
-----------------------------------
[Title]
[SELLING SHAREHOLDERS]
By:
-----------------------------------
Attorney-in-fact
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in New York, NY as of the date first above written.
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
Acting as Representatives of the
several Underwriters named in the
attached Schedule A
By: Banc of America Securities LLC
By:
---------------------------------------
Managing Director
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By:
---------------------------------------
[ ]
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