Exhibit 1.1
5,000,000 Ordinary Shares
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
FORM OF UNDERWRITING AGREEMENT
_________, 2002
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Scottish Annuity & Life Holdings, Ltd., an exempted company
limited by shares organized and existing under the laws of the Cayman Islands
(the "Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 5,000,000 shares (the "Firm Shares") of its
ordinary shares, par value US$0.01 per share (the "Ordinary Shares") and for the
sole purpose of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional 750,000 shares
(the "Additional Shares") of Ordinary Shares. The Firm Shares and any Additional
Shares purchased by the Underwriters are referred to herein as the "Shares." The
Shares are more fully described in the Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-83696), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares which registration statement, as so amended (including
post-effective amendments, if any), has been declared effective by the
Commission and copies of which have heretofore been delivered to the
Underwriters. The registration statement, as amended at the time it
became effective, including the exhibits and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Securities Act, is hereinafter referred to as the "Registration
Statement." If the Company has filed or is required pursuant to the terms hereof
to file a registration statement pursuant to Rule 462(b) under the Securities
Act registering additional shares of Ordinary Shares (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which
became effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. No stop order
suspending the effectiveness of either the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, threatened by the Commission. The Company,
if required by the Securities Act and rules and regulations of the Commission
(together, the "Rules and Regulations"), proposes to file the Prospectus with
the Commission pursuant to Rule 424(b) of the Rules and Regulations. The
Prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations, or, if the Prospectus is not to be
filed with the Commission pursuant to Rule 424(b), the Prospectus in the form
included as part of the Registration Statement at the time the Registration
Statement became effective, is hereinafter referred to as the "Prospectus,"
except that if any revised prospectus or prospectus supplement shall be provided
to the Underwriters by the Company for use in connection with the offering and
sale of the Shares (the "Offering") which differs from the Prospectus (whether
or not such revised prospectus or prospectus supplement is required to be filed
by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to the
Underwriters for such use. Any preliminary prospectus or prospectus subject to
completion included in the Registration Statement or filed with the Commission
pursuant to Rule 424 under the Securities Act is hereafter called a "Preliminary
Prospectus." Any reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") on or before the effective date of the Registration Statement,
the date of such Preliminary Prospectus or the date of the Prospectus, as the
case may be, and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include (i) the
filing of any document under the Exchange Act after the effective date of the
Registration Statement, the date of such Preliminary Prospectus or the date of
the Prospectus, as the case may be, which is incorporated therein by reference
and (ii) any such document so filed. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, the Preliminary
Prospectus and the Prospectus, or any amendments or supplements to any of the
foregoing, shall be deemed to include any copy
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thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇").
(b) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission, when any document
filed under the Exchange Act was or is filed and at the Closing Date and the
Additional Closing Date, if any (as hereinafter respectively defined), the
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Securities Act and the Rules and Regulations and
did not and will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (i) in the case of the Registration Statement, not
misleading and (ii) in the case of the Prospectus or any related Preliminary
Prospectus in light of the circumstances under which they were made, not
misleading. When any related Preliminary Prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Rules and Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Securities Act and the Rules and
Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein in light of the circumstances under which they were
made not misleading. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through you specifically for use therein ("Underwriters'
Information"). The parties acknowledge and agree that the Underwriters'
Information consists solely of the material included in paragraphs 3, 12, 13 and
14 under the caption "Underwriting" in the Prospectus.
(c) Ernst & Young LLP, who have certified the financial
statements and supporting schedules of the Company and World-Wide Holdings
Limited included or incorporated in the Registration Statement, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, the Company has not paid any
dividends on
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its Ordinary Shares and there has been no material adverse change or any
development involving a prospective material adverse change on (i) the business,
prospects, properties, operations, condition (financial or other), stockholders'
equity or results of operations of the Company and each subsidiary of the
Company (each, a "Subsidiary" and together, the "Subsidiaries"), taken as a
whole; (ii) the Ordinary Shares of the Company; (iii) the Offering; or (iv) the
consummation of the transactions contemplated by this Agreement or the Company's
performance of its obligations hereunder (a "Material Adverse Change" or
"Material Adverse Effect"), whether or not arising from transactions in the
ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor any of the Subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, or entered into any transactions which are
material to the Company and the Subsidiaries taken as a whole, except for
liabilities or obligations which are reflected in the Registration Statement and
the Prospectus.
(e) This Agreement and the transactions contemplated herein
have been duly and validly authorized by the Company and this Agreement has been
duly and validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
(i) conflict with or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement, instrument, franchise, license or permit to which
the Company or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or their respective properties or assets may be bound or
(ii) violate or conflict with any provision of the memorandum of association,
articles of association, certificate or articles of incorporation, charter,
by-laws or other organizational documents of the Company or any of the
Subsidiaries or any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties, operations or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required to be made or obtained by the
Company for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, by the Registration
Statement and by the Prospectus, including the issuance, sale and delivery of
the Shares to be issued, sold and delivered by the Company hereunder, except (A)
the registration under the Securities Act of the Shares and (B) such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses and permits as may be required under state securities, Blue Sky or
insurance securities
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laws or the rules of the National Association of Securities Dealers, Inc. in
connection with the purchase and distribution of the Shares by the Underwriters.
(g) The Company has the authorized capitalization set forth in
the Prospectus and all of the issued Ordinary Shares of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and
were not issued in violation of or subject to any preemptive or similar rights
that entitle or will entitle any person to acquire any Shares from the Company
upon issuance or sale by the Company of Shares in the Offering, except for such
rights as may have been fully satisfied or waived prior to the effectiveness of
the Registration Statement; the Shares to be delivered on the Closing Date and
the Additional Closing Date, if any (as hereinafter respectively defined), have
been duly and validly authorized and, when delivered by the Company in
accordance with this Agreement, will be duly and validly issued, fully paid and
non-assessable and will not have been issued in violation of or subject to any
preemptive or similar rights that entitle or will entitle any person to acquire
any Shares from the Company upon issuance thereof by the Company; and all of the
issued shares of capital stock of each of its Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; the Ordinary Shares, the Firm Shares and the
Additional Shares conform to the descriptions thereof contained or incorporated
by reference in the Registration Statement and the Prospectus.
(h) The only subsidiaries (as defined in Rule 405 of the
Securities Act) of the Company are those listed on Schedule III attached hereto.
Each of the Company and the Subsidiaries has been duly organized and is validly
existing as a corporation or a company limited by shares in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not in the aggregate have a Material
Adverse Effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and the Subsidiaries taken as a
whole. Each of the Company and the Subsidiaries has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits (collectively, the
"Consents") of and from all public, regulatory or governmental agencies and
bodies, to own, lease and operate its properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus, with such exceptions as would not have, individually or in the
aggregate a Material Adverse Effect. No Consent contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
(i) Each of the Company and the Subsidiaries which is engaged
in the business of insurance or reinsurance (each, an "Insurance Subsidiary" and
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together, the "Insurance Subsidiaries") holds such insurance license,
certificates and permits from governmental authorities (including, without
limitation, from the insurance regulatory agencies of the various jurisdictions
where it conducts business) (the "Insurance Licenses") as are necessary to the
conduct of its business as described in the Prospectus; the Company and each
Insurance Subsidiary have fulfilled and performed all obligations necessary to
maintain the Insurance Licenses; there is no pending or, to the knowledge of the
Company after due inquiry, threatened action, suit, proceeding or investigation
that could reasonably be expected to result in the revocation, termination or
suspension of any Insurance License; and no insurance regulatory agency or body
has issued, or to our knowledge, commenced any proceeding for the issuance of,
any order or decree impairing, restricting or prohibiting the payment of
dividends or the making of any loan by any Subsidiary to its parent, which would
have, individually or in the aggregate, a Material Adverse Effect.
(j) All reinsurance treaties and arrangements to which the
Company or any Subsidiary is a party as a cedant are in full force and effect;
neither the Company nor any Subsidiary is in material violation of or in
material default in the performance, observance or fulfillment of any
obligation, agreement, covenant or condition contained therein; neither the
Company nor any Subsidiary has received any notice from any of the other parties
to such treaties or arrangements that such other party intends not to perform
such treaty; and, to the best knowledge of the Company and the Subsidiaries, the
Company and the Subsidiaries have no reason to believe that any of the other
parties to such treaties or arrangements will be unable to perform such treaty
or arrangement except to the extent adequately and properly reserved for in the
consolidated financial statements of the Company included in the Prospectus.
(k) The 2001 statutory annual statements of each of the
Insurance Subsidiaries required to prepare such statements and the statutory
balance sheets and income statements included in such statutory annual
statements together with related schedules and notes, have been prepared, in all
material respects, in conformity with statutory accounting principles or
practices required or permitted by the appropriate insurance department of the
jurisdiction of domicile of each such Insurance Subsidiary, and such statutory
accounting practices have been applied on a consistent basis throughout the
periods involved, except as may otherwise be indicated therein or in the notes
thereto, and present fairly, in all material respects, the statutory financial
position of the Insurance Subsidiaries as of the dates thereof, and the
statutory basis results of operations of the Insurance Subsidiaries for the
periods covered thereby.
(l) The Company and the Insurance Subsidiaries have made no
material changes in their insurance reserving practices since December 31, 2000,
except where such change in such insurance reserving practices would not
reasonably be expected to have a Material Adverse Effect.
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(m) The Company is not aware of any threatened or pending
downgrading of any Insurance Subsidiary's financial strength rating from A.M.
Best Company, Inc., Standard & Poor's Rating Services, Inc., ▇▇▇▇▇'▇ Investor
Services or Fitch Ratings (collectively, the "Rating Agencies").
(n) Except as described in the Prospectus, there is no legal
or governmental proceeding, including routine litigation, to which the Company
or any of the Subsidiaries is a party or of which any property of the Company or
any of the Subsidiaries is the subject which, individually or in the aggregate,
if determined adversely to the Company or any of the Subsidiaries, is reasonably
likely to have a Material Adverse Effect, and to the best of the Company's
knowledge, no such proceeding is threatened or contemplated by governmental
authorities or threatened or contemplated by others.
(o) Neither the Company nor its Subsidiaries nor to the
Company's knowledge, any of its affiliates has taken, nor will any of them take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Ordinary Shares to facilitate
the sale or resale of the Shares.
(p) Except for the Subsidiaries or as otherwise set forth in
the Prospectus, the Company owns no capital stock, ordinary shares or other
beneficial interest, directly or indirectly, in any corporation, partnership,
joint venture or other business entity.
(q) (i) The financial statements of the Company, including the
notes thereto, and supporting schedules included or incorporated by reference in
the Registration Statement and the Prospectus present fairly in all material
respects the financial position of the Company and its consolidated subsidiaries
and the other entities for which financial statements are included in the
Registration Statement and the Prospectus as of the dates indicated and
condition and results of operations for the periods specified; except as
otherwise stated in the Registration Statement, said financial statements have
been prepared in conformity with U.S. generally accepted accounting principles
("GAAP") in all material respects applied on a consistent basis throughout the
periods involved; and the supporting schedules included in the Registration
Statement present fairly in all material respects the information required to be
stated therein. The other financial and statistical information and data
relating to the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus present fairly in all material
respects the information included therein and have been prepared on a basis
consistent with that of the financial statements included or incorporated by
reference in the Registration Statement and the Prospectus and the books and
records of the respective entities presented therein.
(ii) The financial statements of World-Wide Holdings Limited,
including the notes thereto, and supporting schedules included or incorporated
by
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reference in the Registration Statement and the Prospectus present fairly in all
material respects the financial position of World-Wide Holdings Limited and its
consolidated subsidiaries and the other entities for which financial statements
are included in the Registration Statement and the Prospectus as of the dates
indicated and condition and results of operations for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with GAAP applied on a consistent
basis throughout the periods involved; and the supporting schedules included in
the Registration Statement present fairly in all material respects the
information required to be stated therein. The other financial and statistical
information and data relating to World-Wide Holdings Limited and its
consolidated subsidiaries included in the Registration Statement and the
Prospectus present fairly in all material respects the information included
therein and have been prepared on a basis consistent with that of the financial
statements included or incorporated by reference in the Registration Statement
and the Prospectus and the books and records of the respective entities
presented therein.
(r) The pro forma and as adjusted financial information
included in the Prospectus has been properly compiled, and prepared in
accordance with the applicable requirements of the Securities Act and the Rules
and Regulations and includes all adjustments necessary to present fairly the pro
forma combined financial position of the Company and World-Wide Holdings Limited
and their respective subsidiaries at the respective dates indicated and the
results of their operations for the respective periods specified. There are no
historical or pro forma financial statements that are required to be included in
the Registration Statement and the Prospectus in accordance with Regulation S-X
that have not been included as so required.
(s) Except as disclosed in the Prospectus, no holder of
securities of the Company has any rights to the registration of securities of
the Company because of the filing of the Registration Statement or otherwise in
connection with the sale of the Shares contemplated hereby, and any such rights
so disclosed have been effectively waived by the holders thereof.
(t) The Company is not, and upon consummation of the
transactions contemplated hereby, and at all times up to and including the
application of net proceeds as described in the Prospectus, will not be, subject
to registration as an "investment company" under the Investment Company Act of
1940.
(u) Any real property and buildings held under lease or
sublease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and the Subsidiaries. Neither the Company nor any of
the Subsidiaries has received any notice of any claim adverse to their ownership
of any real or personal property or of any
8
claim against the continued possession of any real property, whether owned or
held under lease or sublease by the Company or any of the Subsidiaries.
(v) The Company and each of the Subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by each of them and have paid or made provision for the
payment of all taxes, assessments, governmental or other similar charges,
including without limitation, all sales and use taxes and all taxes which the
Company and each of the Subsidiaries are obligated to withhold from amounts
owing to employees, creditors and third parties, with respect to the periods
covered by such tax returns (whether or not such amounts are shown as due on any
tax return), except in any case where the failure to file any such return or to
make any such provision, individually or in the aggregate, would not have a
Material Adverse Effect. No deficiency assessment with respect to a proposed
adjustment of the Company's or any of the Subsidiaries' federal, state, or other
taxes is pending or, to the best of the Company's knowledge, threatened. There
is no tax lien, whether imposed by any federal, state, or other taxing
authority, outstanding against the assets, properties or business of the Company
or any of the Subsidiaries.
(w) As of the date hereof and on the Closing Date, the Company
and its Subsidiaries intend to operate in such a manner that they will not (1)
engage in certain nontraditional insurance or reinsurance activities that do not
involve a sufficient amount of risk transfer or (2) maintain financial reserves
in excess of the reasonable needs of the insurance business of the Company and
its Subsidiaries, thereby causing the insurance company exception to the passive
foreign investment company rules described in Section 1297 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code") not to apply to
the Company or its Subsidiaries.
(x) The Ordinary Shares are registered pursuant to Section
12(b) of the Exchange Act and the outstanding Ordinary Shares (including the
Shares) are listed on the New York Stock Exchange (the "NYSE"), and the Company
has taken no action designed to, or likely to have the effect of, terminating
the registration of the Ordinary Shares under the Exchange Act or de-listing the
Ordinary Shares from the NYSE, nor has the Company received any notification
that the Commission or the NYSE is contemplating terminating such registration
or listing.
(y) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(z) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all respects with the requirements
of the Exchange Act and the rules and regulations of the Commission under the
Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement and any amendments thereto
become effective and at the Closing Date, will not contain an untrue statement
of a material fact or omit to state a material
9
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(aa) There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described in
the Prospectus or filed as exhibits to the Registration Statement or the
Prospectus by the Securities Act or by the Rules and Regulations and which have
not been so described or filed.
(bb) Neither the Company nor any of the Subsidiaries (i) is in
violation of its memorandum of association, articles of association, certificate
or articles of incorporation, charter or by-laws, (ii) is in default (and no
event has occurred which, with notice or lapse of time or both, would constitute
such a default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) is in violation in
any respect of any statute or any judgment, decree, order, rule or regulation of
any court or governmental or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their properties or assets,
except in the case of (iii), any violation or default that would not have a
Material Adverse Effect on the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company and the
Subsidiaries taken as a whole.
(cc) Each of the Company and the Subsidiaries owns or
possesses adequate right to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement and Prospectus and have no reason to
believe that the conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with, any such right of
others, which claim, if the subject of an unfavorable decision, ruling or
judgment, could reasonably be expected to result in a Material Adverse Effect.
To the best of the Company's knowledge, all material technical information
developed by and belonging to the Company which has not been patented has been
kept confidential. Neither the Company nor any of its Subsidiaries has granted
or assigned to any other person or entity any right to manufacture, have
manufactured, assemble or sell the current products and services of the Company
or those products and services described in the Registration Statement and
Prospectus.
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(dd) No labor disturbance by the employees of the Company or
any of the Subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to have a Material Adverse Effect.
(ee) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Code, or "accumulated funding deficiency" (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan of
the Company or any of its Subsidiaries which could have a Material Adverse
Effect; each employee benefit plan of the Company or any of its Subsidiaries is
in compliance in all material respects with applicable law; including ERISA and
the Code; the Company has not incurred and does not expect to incur liability
under Title IV of ERISA with respect to the termination of, or withdrawal from
any "pension plan" (as defined in ERISA); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could cause the loss of
such qualification.
(ff) The statistical and market-related data included in the
Prospectus are based on or derived from sources which are reliable and accurate.
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters and the Underwriters
severally agree to purchase from the Company, at a purchase price per share of
US$_______, the number of Firm Shares set forth opposite the respective names of
the Underwriters in Schedule I hereto plus any additional number of Shares which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ("Underwriters'
Counsel") or at such other place as shall be agreed upon by the Underwriters in
Schedule I hereto and the Company, at 10:00 A.M., New York City time on the
third or fourth business day (as permitted under Rule 15c6-1 under the Exchange
Act) (unless postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth business day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the public offering price of the Shares), or such
other time not later than ten business days after such date as shall be agreed
upon by
11
Bear, ▇▇▇▇▇▇▇ & Co. Inc. and the Company (such time and date of payment and
delivery being herein called the "Closing Date").
(c) Payment for the Firm Shares shall be made to or upon the
order of the Company of the purchase price by wire transfer in Federal (same
day) funds to the Company upon delivery of certificates for the Shares to you
through the facilities of The Depository Trust Company for the respective
accounts of the several Underwriters against receipt therefor signed by you.
Certificates for the Shares to be delivered to you shall be registered in such
name or names and shall be in such denominations as you may request at least one
business day before the Closing Date. The Company will permit you to examine and
package such certificates for delivery at least one full business day prior to
the Closing Date.
(d) In addition, the Company hereby grants to the Underwriters
the option to purchase up to 750,000 Additional Shares at the same purchase
price per share to be paid by the Underwriters to the Company for the Firm
Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time and from time to time, in whole or in part, on or
before the thirtieth day following the date of the Prospectus, by written notice
by you to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time, as reasonably determined by you, when the Additional Shares are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); PROVIDED, HOWEVER, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been exercised nor
later than the eighth full business day after the date on which the option shall
have been exercised (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Certificates for the Additional Shares
shall be registered in such name or names and in such authorized denominations
as you may request in writing at least two full business days prior to the
Additional Closing Date. The Company will permit you to examine and package such
certificates for delivery at least one full business day prior to the Additional
Closing Date.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same ratio to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number
increased as set forth in Section 9 hereof) bears to the total number of Firm
Shares, subject, however, to such adjustments to eliminate any fractional shares
as Bear, ▇▇▇▇▇▇▇ & Co. Inc. in its sole discretion shall make.
Payment for the Additional Shares shall be made to or upon the
order of the Company of the purchase price by wire transfer in Federal (same
day) funds to the Company at the offices of Underwriters' Counsel, or such other
location as may be
12
mutually acceptable upon delivery of the certificates for the Additional Shares
to you for the respective accounts of the Underwriters.
3. OFFERING. Upon your authorization of the release of the
Firm Shares, the Underwriters propose to offer the Shares for sale to the public
upon the terms and conditions set forth in the Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees
with each of the Underwriters that:
(a) The Registration Statement and any amendments thereto have
become effective, and if Rule 430A is used or the filing of the Prospectus is
otherwise required under Rule 424(b), the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) within
the prescribed time period and will provide evidence satisfactory to you of such
timely filing.
The Company will notify you immediately (and, if requested by
you, will confirm such notice in writing) (i) when the Registration Statement
and any amendments thereto become effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (iii) of the Company's
intention to file or prepare any amendments to the Registration Statement
(including pursuant to rule 462(b)), the term sheet or any supplement, revision
or amendment to the Registration Statement or the Prospectus, (iv) of the
mailing or the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the Prospectus, (v) 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 the
initiation, or the threatening, of any proceedings therefor, it being understood
that the Company shall make every effort to avoid the issuance of any such stop
order, (vi) of the receipt of any comments from the Commission, and (vii) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Commission shall propose
or enter a stop order at any time, the Company will make every reasonable effort
to prevent the issuance of any such stop order and, if issued, to obtain the
lifting of such order as soon as possible. The Company will not file any
amendment to the Registration Statement or any amendment of or supplement to the
Prospectus (including the prospectus required to be filed pursuant to Rule
424(b)) that differs from the Prospectus on file at the time of the
effectiveness of the Registration Statement before or after the effective date
of the Registration Statement, or file any document under the Exchange Act if
such document would be deemed to be incorporated by reference into the
Prospectus to which you shall object in writing after being timely furnished in
advance a copy thereof.
(b) The Company shall comply with the Securities Act and the
Exchange Act to permit completion of the distribution as contemplated in this
13
Agreement, Registration Statement and Prospectus. If at any time when a
prospectus relating to the Shares is required to be delivered under the
Securities Act or the Exchange Act in connection with the sales of Shares, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the
Securities Act or the Rules and Regulations, or to file under the Exchange Act
so as to comply therewith any document incorporated by reference in the
Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare and file
with the Commission, subject to the second paragraph of Section 4(a) hereof, an
appropriate amendment or supplement (in form and substance satisfactory to you)
which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to each of the
Underwriters and Underwriters' Counsel a signed copy of the Registration
Statement, including all consents and exhibits filed therewith and all documents
incorporated by reference therein and all amendments thereto, and the Company
will promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents
incorporated by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, as you may reasonably request. Prior to
10:00 A.M., New York time, on the business day next succeeding the date of this
Agreement and from time to time thereafter the Company will furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request.
(d) The Company consents to the use and delivery of the
Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 5(b) of the Securities Act. The Company shall also furnish to each of
the Underwriters copies of the Final Prospectus as requested by any of the
Underwriters.
(e) The Company will use its best efforts, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
14
(f) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than fifteen months after the end of the Company's fiscal quarter in which
the effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act) falls, an earnings statement of the Company and the
Subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).
(g) During the period of 90 days from the date of the
Prospectus, the Company will not, directly or indirectly, without your prior
written consent, issue, sell, offer or agree to sell, grant any option for the
sale of, pledge, make any short sale or maintain any short position, establish
or maintain a "put equivalent position" (within the meaning of Rule 16-a-1(h)
under the Exchange Act ), enter into any swap, derivative transaction or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Ordinary Shares (whether any such transaction
is to be settled by delivery of Ordinary Shares, other securities, cash or other
consideration) or otherwise dispose of, any Ordinary Shares (or any securities
convertible into, exercisable for or exchangeable for Ordinary Shares) or
interest therein of the Company or of any of the Subsidiaries, and the Company
will obtain the undertaking of each of its officers and directors and such of
its shareholders as have been heretofore designated by you and listed on
Schedule II attached hereto not to engage in any of the aforementioned
transactions on their own behalf, other than the Company's sale of Shares
hereunder and the Company's issuance of Ordinary Shares upon (i) the exercise of
warrants outstanding on the date hereof; (ii) the exercise of currently
outstanding options; and (iii) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans in effect
on the date hereof.
(h) During the period of three years from the effective date
of the Registration Statement, the Company will furnish to you copies of all
reports or other communications (financial or other) furnished to security
holders, and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the Company
is listed; and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and the Subsidiaries are consolidated in reports
furnished to its security holders generally or to the Commission).
(i) The Company will apply the net proceeds it receives from
the sale of the Shares as set forth under the caption "Use of Proceeds" in the
Prospectus.
(j) The Company will use its best efforts to list the Shares
on the NYSE.
15
(k) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the Exchange
Act and the rules and regulations thereunder.
5. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of the obligations of the Company hereunder, including the
following: (i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the
Securities Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
duplicating and binding any Agreement among Underwriters, this Agreement, the
blue sky memoranda, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and delivery
of the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
4(e) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
blue sky survey; (iv) all fees and expenses in connection with listing the
Shares on the NYSE; (v) all travel expenses of the Company's officers and
employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers of the Shares; (vi)
any stock transfer taxes incurred in connection with this Agreement or the
Offering; and (vii) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares. The Company also will pay or cause to be paid:
(i) the cost of preparing stock certificates; (ii) the cost and charges of any
transfer agent or registrar; and (iii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 5. It is understood, however, that
except as provided in this Section, and Sections 7 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6 "Closing Date"
shall refer to the Closing Date for the Firm Shares and any Additional Closing
Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or
16
to Underwriters' Counsel pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Registration Statement shall have become effective and
all necessary approvals from the NYSE shall have been received not later than,
if pricing pursuant to Rule 430A, 5:30 P.M., New York time, on the date of this
Agreement or at such later time and date as shall have been consented to in
writing by you; if the Company shall have elected to rely upon Rule 430A of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof and a form of the
Prospectus containing information relating to the description of the Shares and
the method of distribution and similar matters shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period; and, at or
prior to the Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall have been
issued and no proceedings therefor shall have been initiated or threatened by
the Commission.
(b) At the Closing Date, you shall have received the favorable
written opinion of (i) ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇.▇., ▇▇▇▇▇▇ ▇▇▇▇▇▇
counsel for the Company, (ii) ▇▇▇▇ ▇▇▇▇▇▇▇, Esq., General Counsel of the Company
and (iii) ▇▇▇▇▇▇ and ▇▇▇▇▇▇, Cayman Islands counsel for the Company, each dated
the Closing Date and addressed to the Underwriters in the forms attached hereto
as Annexes I(A), I(B) and II, respectively.
(c) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date with respect to the issuance and sale of
the Shares, the Registration Statement and the Prospectus and such other related
matters as you may require, and the Company shall have furnished to
Underwriters' Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) At the Closing Date, you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date all agreements,
conditions and obligations of the Company to be performed or complied with
hereunder on or prior thereto have been duly performed or complied with, (iv)
except (A) as disclosed in the Registration Statement and Prospectus and (B) for
such losses or interferences as would not result, individually or in the
aggregate, in a Material Adverse Effect, the Company and the Subsidiaries have
not
17
sustained any material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or governmental
proceeding, and (v) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus there has not been any
Material Adverse Change in the capital stock or Ordinary Shares of the Company
or any of the Subsidiaries or any change, or any development involving a
prospective change, in the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiaries taken as a whole, except in each case as described in or
contemplated by the Prospectus.
(e) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from Ernst & Young LLP,
independent public accountants for the Company and World-Wide Holdings Limited,
dated, respectively, as of the date of this Agreement and as of the Closing Date
addressed to the Underwriters and in form and substance satisfactory to the
Underwriters and Underwriters' counsel.
(f) At the time of this Agreement and at the Closing Date, you
shall have received a letter, from Ernst & Young LLP dated as of the Closing
Date addressed to the Underwriters and in form and substance satisfactory to
you, stating that nothing caused them to believe that the audited pro forma
financial information of the Company included in the Registration Statement does
not comply as to form with the applicable accounting requirements of Rule 11-02
of Regulation S-X promulgated under the Securities Act or that the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of such statements.
(g) You shall have also received from Ernst & Young LLP, a
letter stating that the Company's system of internal accounting controls taken
as a whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation to the
financial statements of the Company and the Subsidiaries.
(h) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or Ordinary Shares of the Company or any of the Subsidiaries or any
change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business, properties
or prospects of the Company and the Subsidiaries taken as a whole, including,
without limitation, the occurrence of a fire, flood, explosion or other calamity
at any of the properties owned or leased by the Company or any of its
Subsidiaries, the effect of which, in any such case described above, is, in the
judgment of
18
the Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Prospectus (exclusive of any
supplement).
(i) You shall have received a lock-up agreement from each
person who is a director or officer of the Company and each shareholder as shall
have been heretofore designated by you and listed on Schedule II hereto
substantially in the form attached hereto as Annex III.
(j) At the Closing Date, the Shares shall have been approved
for listing on the NYSE.
(k) The Company shall have complied with the provisions of
Section 4(c) hereof with respect to the furnishing of prospectuses.
(l) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
(m) None of Company's Insurance Subsidiaries shall have been
downgraded by any of the Rating Agencies nor have been put on credit watch with
negative implications (or similar action) by any of the Rating Agencies.
(n) At the Closing Date, the National Association of
Securities Dealers, Inc. shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing or by
telephone. Any such telephone notice shall be confirmed promptly thereafter in
writing.
7. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in
19
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Shares, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that
the Company will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with the
information furnished to the Company and referred to in the last sentence of
Section 1(b); PROVIDED, FURTHER, that the foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter who failed to deliver a Prospectus (as then amended or supplemented,
provided by the Company to the several Underwriters in the requisite quantity
and on a timely basis to permit proper delivery on or prior to the Closing Date)
to the person asserting any losses, claims, damages and liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured,
as determined by a court of competent jurisdiction in a decision not subject to
further appeal, in such Prospectus and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have including under this Agreement.
(b) Each Underwriter severally, and not jointly, shall
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim, and any and all
amounts paid in settlement of any claim or litigation), jointly or severally, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged
20
untrue statement of a material fact contained in the Registration Statement for
the registration of the Shares, as originally filed or any amendment thereof, or
any related preliminary prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with the information furnished to the Company and referred to
in the last sentence of Section 1(b); provided, however, that in no case shall
any Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of any claims or the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the claim or the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve the indemnifying party from any liability which it may have under
this Section 7 to the extent that it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that such
indemnifying party may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, an
indemnifying party may participate, at its own expense in the defense of such
action, and to the extent it may elect 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, that counsel to the
indemnifying party shall not (except with the written consent of the indemnified
party) also be counsel to the indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
(iii) the indemnifying party does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and
21
expenses shall be borne by the indemnifying parties. No indemnifying party
shall, without the prior written consent of the indemnified parties, effect any
settlement or compromise of, or consent to the entry of judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could have been sought under Section 7 or 8
hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless (i) such settlement, compromise or consent (A) includes an
unconditional release of the indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (B) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of the indemnified party and (ii) the indemnifying party reaffirms
its indemnification obligations pursuant to this Agreement.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company and one
or more of the Underwriters may be subject, in such proportions as are
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportions as are appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Underwriters
shall be deemed to be in the same proportion as (x) the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and (y) the underwriting discount received by
the respective Underwriters, respectively, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company and
of the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
22
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 8 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares are underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 8 or
otherwise. The obligations of the Underwriters to contribute pursuant to this
Section 8 are several in proportion to the respective number of Shares purchased
by each of the Underwriters hereunder and not joint.
9. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting
23
Underwriters in proportion to the respective proportions which the numbers of
Firm Shares set forth opposite their respective names in Schedule I hereto bear
to the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Sections 5, 7(a) and 8 hereof) or the Underwriters, but nothing
in this Agreement shall relieve a defaulting Underwriter or Underwriters of its
or their liability, if any, to the other Underwriters and the Company for
damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the Underwriters,
and the Company contained in this Agreement or in certificates of officers of
the Company or any Subsidiary submitted hereto or thereto, including the
agreements contained in Section 5, the indemnity agreements contained in Section
7 and the contribution agreements contained in Section 8, shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person thereof or by or on behalf
of the Company, any of its officers and directors or any controlling person
thereof, and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Section 1 and the agreements
24
contained in Sections 5, 7, 8, 10, 11(d) and 15 hereof shall survive the
termination of this Agreement, including termination pursuant to Section 9 or 11
hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later of
when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York City time, on the fifth
full business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company by notifying you or
by you notifying the Company. Notwithstanding the foregoing, the provisions of
this Section 11 and of Sections 1, 5, 7, 8, 10, 11 and 15 hereof shall at all
times be in full force and effect.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Date or to terminate the obligations of the
Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if (A) any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, the market for the
Company's securities or securities in general; or (B) if trading on the NYSE,
the Nasdaq Stock Market (the "Nasdaq") or the American Stock Exchange shall have
been suspended, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges for prices for securities shall have been required, on the
NYSE, the Nasdaq or the American Stock Exchange by the NYSE, the Nasdaq or the
American Stock Exchange or by order of the Commission or any other governmental
authority having jurisdiction; or (C) if a banking moratorium has been declared
by any state or federal authority or if any material disruption in commercial
banking or securities settlement or clearance services shall have occurred; or
(D) any downgrading shall have occurred in the Company's corporate credit rating
or the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization" as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act or if any
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities; or (E) (i) if there shall have occurred any outbreak
or escalation of hostilities or acts of terrorism involving the United States or
there is a declaration of a national emergency or war by the United States or
(ii) if there shall have been any other calamity or crisis or any change in
political, financial or economic conditions if the effect of any such event in
(A) or (E) in your judgment makes it impracticable or inadvisable to proceed
with the offering, sale and delivery of the Firm Shares or the Additional
Shares, as the case may be, on the terms and in the manner contemplated by the
Prospectus.
25
(c) Any notice of termination pursuant to this Section 11
shall be in writing.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b)), or if the sale of the
Shares provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth herein is not satisfied or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will reimburse
the Underwriters for all out-of-pocket expenses (including the fees and expenses
of their counsel), incurred by the Underwriters in connection herewith. If this
Agreement shall be terminated pursuant to Section 11(b) hereof, then no party
shall have any liability hereunder except for the Company's obligation, pursuant
to Section 5 hereof, to pay all out-of-pocket expenses of the Underwriters
(including the fees and expenses of their counsel) incurred in connection with
this Agreement.
12. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to such Underwriter c/o Bear, ▇▇▇▇▇▇▇ & Co.
Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity Capital
Markets, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) if sent to the Company, shall be mailed, delivered, or
faxed and confirmed in writing to the Company at ▇.▇. ▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, 4 Par-la-Ville Road, Hamiltom HM12, Bermuda, Attention: ▇▇▇▇
▇▇▇▇▇▇▇, Esq., with a copy to LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 7
shall be delivered or sent by mail or facsimile transmission to such
Underwriter at its address set forth in its acceptance facsimile to you,
which address will be supplied to any other party hereto by you upon request.
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
13. PARTIES. This Agreement shall insure solely to the benefit
of, and shall be binding upon, the Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Sections 7 and 8 hereof, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, and
officers and
26
directors and their heirs and legal representatives, and it is not for the
benefit of any other person, firm or corporation. The term "successors and
assigns" shall not include a purchaser, in its capacity as such, of Shares from
any of the Underwriters.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
15. SUBMISSION TO JURISDICTION AND SERVICE OF PROCESS. (a) The
Company hereto consents to the jurisdiction of and venue in Federal and state
courts located in the Borough of Manhattan, City and State of New York, over any
suit, action or proceeding with respect to this Agreement or any transaction
contemplated hereby (an "Action"). The Company irrevocably and unconditionally
waives any objection to the laying of venue of any Action in any Federal or
state court located in the Borough of Manhattan, City and State of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Action brought in any such court has been
brought in an inconvenient forum. Nothing contained in the preceding sentences
or elsewhere in this Agreement will preclude any party from enforcing any
judgment or order in any jurisdiction where the other party owns any assets or
property.
(b) The Company agrees that service of all writs, process and
summonses in any suit, action or proceeding brought in connection with this
Agreement against the Company in any court of the State of New York or any
United States Federal court, in each case, sitting in the Borough of Manhattan,
City and State of New York, may be made upon CT Corporation System at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, whom the Company irrevocably appoints as its
authorized agent for service of process. The Company represents and warrants
that CT Corporation System has agreed to act as the Company's agent for service
of process. The Company agrees that such appointment shall be irrevocable until
the irrevocable appointment by the Company of a successor in The City of New
York as its authorized agent for such purpose and the acceptance of such
appointment by such successor. The Company further agrees to take any and all
action, including the filing of any and all documents and instruments that may
be necessary to continue such appointment in full force and effect as aforesaid.
If CT Corporation System shall cease to act as the agent for service of process
for the Company, the Company shall appoint without delay, another such agent and
provide prompt written notice to Bear, ▇▇▇▇▇▇▇ & Co. Inc. of such appointment.
16. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which may be delivered by facsimile and shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
17. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
27
18. TIME IS OF THE ESSENCE. Time shall be of the essence of
this Agreement. As used herein, the term "business day" shall mean any day when
the Commission's office in Washington, D.C. is open for business.
[signature page follows]
28
If the foregoing correctly sets forth the understanding
between you and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us. It is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
By:
---------------------------------------------
Name:
Title:
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
---------------------------------
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
29
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
Bear, ▇▇▇▇▇▇▇ & Co. Inc. ........................ _______________
▇▇▇▇▇▇ ▇▇▇▇▇▇ Securities Inc..................... _______________
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ Inc. ........................... _______________
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc..................... _______________
Total:................................. ===============
I-1
SCHEDULE II
NAMES OF STOCKHOLDERS SUBJECT TO THE LOCK-UP PROVISION
[LIST TO BE CONFIRMED BY THE COMPANY]
Pacific Life Insurance Company
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇
J. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Lord ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Soulieana Limited
Audubon Asset Limited
Maverick Fund USA, Ltd.
Maverick Fund II, Ltd.
Maverick Fund, LDC
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Aundyr Trust Company Limited
Roman Arch Fund, L.P. (Prudential)
Roman Arch Fund II, L.P. (Prudential)
II-1
SCHEDULE III
LIST OF SUBSIDIARIES
Scottish Annuity & Life Insurance Company (Cayman) Ltd.
Scottish Annuity & Life Holdings (Bermuda) Limited
Scottish Annuity & Life Insurance Company (Bermuda) Limited
Scottish Holdings (Barbados), Limited
Scottish Holdings (U.S.), Inc.
Scottish Annuity & Life International Insurance Company (Bermuda) Ltd.
Scottish Re (U.S.), Inc.
Scottish Re Intermediaries (Canada) Limited
Scottish Re (Dublin) Limited
Tartan Wealth Management, Inc.
The Scottish Annuity Company (Cayman) Ltd.
World-Wide Holdings Limited
World-Wide Reassurance Company Limited
World-Wide Corporate Capital Limited
World-Wide Insurance PCC Limited
III-1
ANNEX I(A)
FORM OF OPINION OF COMPANY'S U.S. COUNSEL
(i) Scottish Re (U.S.), Inc., a Delaware corporation (the
"Delaware Subsidiary"), is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation with all
requisite corporate power to own its properties and conduct its
business as described in the Prospectus.
(ii) The Ordinary Shares currently outstanding are listed, and the
Shares to be sold under the Underwriting Agreement to the Underwriters
have been approved for listing, on the NYSE, subject to notice of
issuance.
(iii) The issuance and sale of the Shares by the Company, the
execution, delivery, and performance of the Underwriting Agreement,
compliance by the Company with all provisions of the Underwriting
Agreement and the consummation of the transactions contemplated hereby
by the Company do not and will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of the Subsidiaries pursuant to, any agreement or instrument that is
expressed to be governed by New York law and filed (or incorporated by
reference) as an exhibit to the Registration Statement.
(iv) No consent, approval, authorization, order, registration,
filing, qualification, license or permit pursuant to U.S. Federal law,
the Delaware General Corporation Law or the Delaware Insurance Code
with any U.S. Federal or Delaware court or any U.S. Federal or Delaware
public, governmental, or regulatory agency or body having jurisdiction
over the Company or any of the Subsidiaries or any of their respective
properties or assets is required for the issuance, sale and delivery of
the Shares, the execution, delivery and performance of the Underwriting
Agreement or the consummation of the transactions contemplated hereby,
except for (1) such as may be required under state securities or Blue
Sky or insurance securities laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion), (2) such as have been made or
obtained under the Securities Act and (3) such as are required by the
National Association of Securities Dealers, Inc. (as to which such
counsel need express no opinion).
(v) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or
incorporated by reference therein, as to which no opinion need be
rendered) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations. To
the actual knowledge of the attorneys at this firm who have been
involved in the preparation
30
of the Registration Statement, all documents required by the Rules and
Regulations to be filed in connection with, incorporated by reference,
or described in the Registration Statement have been so filed,
incorporated by reference or described. The documents filed under the
Exchange Act and incorporated by reference in the Registration
Statement and the Prospectus or any amendment thereof or supplement
thereto (other than the financial statements and schedules and other
financial data included or incorporated by reference therein, as to
which no opinion need be rendered) when they were filed with the
Commission (or at the time they were amended, if applicable) complied
as to form in all material respects with the Exchange Act and the Rules
and Regulations of the Commission thereunder.
(vi) The statements in the Prospectus under the captions (A) "Risks
Related to Taxation - Certain tax risks may affect our business", (B)
"Risks Related to Taxation - We may be subject to U.S. federal income
taxation", (C) "Risks Related to Taxation - U.S. persons who own our
ordinary shares may be subject to U.S. federal income taxation on our
undistributed earnings and may recognize ordinary income upon
disposition of our ordinary shares", (D) "Risks Related to Taxation -
U.S. tax-exempt organizations who own our ordinary shares may recognize
unrelated business taxable income", (E) "Risks Related to Taxation -
Change in U.S. tax laws may be retroactive and could subject us and/or
U.S. persons who own our ordinary shares to U.S. income taxation on our
undistributed earnings", (F) "Risks Related To This Offering - Our
Articles of Association and applicable insurance laws make it difficult
to effect a change of control; a large shareholder may have significant
influence over potential change in control transactions", (G) "Risks
Related To This Offering - Investors may have difficulties in suing or
enforcing judgments against us in the United States", (H) "Business -
Regulation" (other than statements appearing under the subcaptions,
"Bermuda", "Cayman Islands", "Ireland", "United Kingdom" and "New
Jurisdictions"), (I) the first three paragraphs of "Tax Matters", (J)
"Tax Matters - Taxation of Scottish Holdings and its Subsidiaries -
United States" and (K) "Tax Matters - Taxation of Shareholders - United
States - Taxation of U.S. Shareholders", insofar as such statements
constitute a summary of the U.S. Federal or Delaware legal matters
referred to therein relating to the Delaware General Corporation Law or
the Delaware Insurance Code, fairly present the information called for
with respect to such legal matters.
(vii) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(viii) The Registration Statement is effective under the Securities
Act, and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof has been issued and no proceedings
therefor have been initiated or threatened by the
31
Commission. All filings required by Rule 424(b) and Rule 430A of the
Rules and Regulations with respect to the Registration Statement have
been made.
(ix) To the actual knowledge of the attorneys at this firm who have
been involved in the preparation of the Registration Statement, no
contract or agreement is required to be filed as an exhibit to the
Registration Statement that is not so filed.
In addition, such opinion shall also contain a statement that such counsel has
participated in conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company and the
Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement, at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b)), or in the event of any amendment
thereof made prior to the Closing Date, as of the date of such amendment,
contained or incorporated by reference any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus (including
the documents incorporated by reference therein), as of its date (or in the
event of any amendment thereof or supplement thereto made prior to the Closing
Date as of the date of such amendment or supplement) and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and schedules and
other financial data included or incorporated by reference therein).
ANNEX I(B)
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
--------------------------------------------
(i) Scottish Re (U.S.), Inc., a Delaware corporation (the
"Delaware Subsidiary"), has been duly organized and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation with all requisite corporate power and other necessary
authority to own its properties and conduct its business as described
in the Prospectus.
(ii) All of the issued shares of the Delaware Subsidiary have been
duly and validly authorized and issued and are fully paid and
non-assessable.
(iii) The Underwriting Agreement has been duly and validly
authorized, executed and delivered by the Company.
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending with any U.S. Federal or any Delaware governmental agency or
body acting pursuant to the Delaware General Corporation Law or
Delaware Insurance Code to which the Company or any of the Subsidiaries
is a party or of which any property of the Company or any of the
Subsidiaries is the subject which, if determined adversely to the
Company or any of the Subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(v) The issuance and sale of the Shares by the Company, the
execution, delivery, and performance of the Underwriting Agreement,
compliance by the Company with all provisions of the Underwriting
Agreement and the consummation of the transactions contemplated hereby
by the Company do not and will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of the Subsidiaries pursuant to, any agreement or instrument filed (or
incorporated by reference) as an exhibit to the Registration Statement.
(vi) No consent, approval, authorization, order, registration,
filing, qualification, license or permit pursuant to U.S. Federal law,
the Delaware General Corporation Law or the Delaware Insurance Code
with any U.S. Federal or state court or any U.S. Federal or state
public, governmental, or regulatory agency or body having jurisdiction
over the Company or any of the Subsidiaries or any of their respective
properties or assets is required for the issuance, sale and delivery of
the Shares, the execution, delivery and performance of the Underwriting
Agreement or the consummation of the transactions contemplated
32
hereby, except for (1) such as may be required under state securities
or Blue Sky or insurance securities laws in connection with the
purchase and distribution of the Shares by the Underwriters (as to
which such counsel need express no opinion), (2) such as have been made
or obtained under the Securities Act and (3) such as are required by
the National Association of Securities Dealers, Inc. (as to which such
counsel need express no opinion).
(vii) The Delaware Subsidiary holds such Insurance Licenses,
certificates and permits from governmental authorities which are
necessary to the conduct of its business as described in the
Prospectus; to the best knowledge of such counsel, there is no pending
or threatened action, suit, proceeding or threatened action, suit,
proceeding or investigation that could reasonably be expected to result
in the revocation, termination or suspension of any Insurance License;
and to the knowledge of such counsel, no Delaware insurance regulatory
agency or body has issued, or commenced any proceeding for the issuance
of, any order or decree impairing, restricting or prohibiting the
payment of dividends by the Delaware Subsidiary to its parent.
In addition, such opinion shall also contain a statement that such counsel has
participated in conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company and the
Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement, at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b)), or in the event of any amendment
thereof made prior to the Closing Date, as of the date of such amendment,
contained or incorporated by reference any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus (including
the documents incorporated by reference therein), as of its date (or in the
event of any amendment thereof or supplement thereto made prior to the Closing
Date as of the date of such amendment or supplement) and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and schedules and
other financial data included or incorporated by reference therein).
ANNEX II
FORM OF OPINION OF COMPANY'S CAYMAN ISLAND COUNSEL
--------------------------------------------------
(i) The Company has been duly organized and is validly existing as
an exempted company limited by shares in good standing under the laws
of its jurisdiction of incorporation with full power and corporate and
all other necessary authority to own its properties and conduct its
business as described in the Prospectus.
(ii) The Company has an authorized capitalization as set forth in
the Registration Statement and the Prospectus. All of the issued shares
of Ordinary Shares of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable; and the Ordinary Shares,
the Firm Shares and the Additional Shares conform to the descriptions
thereof contained in the Registration Statement and the Prospectus. The
Shares to be delivered on the Closing Date have been duly and validly
authorized and, when delivered by the Company against payment therefor
in accordance with the Underwriting Agreement, will be duly and validly
issued, fully paid and non-assessable.
(iii) The Company has full right, power and authority to execute and
deliver the Underwriting Agreement and to issue the Shares and to
perform its obligations under the Underwriting Agreement, and all
corporate action required to be taken for the due and proper
authorization, execution and delivery of the Underwriting Agreement and
the issuance of the Shares and the consummation of the transactions
contemplated by the Underwriting Agreement and as described in the
Prospectus have been duly and validly taken.
(iv) The Underwriting Agreement has been duly and validly
authorized, executed and delivered by the Company.
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
with any Cayman Islands governmental agency or body pending to which
the Company or any of the Subsidiaries is a party or of which any
property of the Company or any of the Subsidiaries is the subject
which, if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(vi) The issuance and sale of the Shares by the Company, the
execution, delivery, and performance of the Underwriting Agreement,
compliance by the Company with all provisions of the Underwriting
Agreement and the consummation of the transactions contemplated hereby
by the Company do not and will not (A) conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
(or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
33
Company pursuant to, any indenture, mortgage, deed of trust, loan
agreement or any other agreement, instrument, franchise, license or
permit known to such counsel to which the Company is a party or by
which any of the Company or its properties or assets is subject or may
be bound or (B) violate or conflict with any provision of the
memorandum of association, articles of association, articles or
certificate of incorporation, charter or by-laws of the Company, or, to
the best knowledge of such counsel, any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or any
of its properties or assets.
(vii) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any Cayman Islands
court or any Cayman Islands public, governmental, or regulatory agency
or body having jurisdiction over the Company or any of its properties
or assets is required for the issuance, sale and delivery of the
Shares, the execution, delivery and performance of the Underwriting
Agreement or the consummation of the transactions contemplated hereby,
except for (1) such as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters (as to which such counsel need express no opinion),
(2) such as have been made or obtained under the Securities Act and (3)
such as are required by the National Association of Securities Dealers,
Inc.
(viii) The statements under the captions "Prospectus Summary", "Risk
Factors", "Business" and "Tax Matters" in the Prospectus and Items 14
and 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of Cayman Islands legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings.
(ix) The Company has the power insofar as Cayman Islands law is
concerned to (A) submit, and pursuant to the Underwriting Agreement has
legally, validly, effectively and irrevocably submitted, to the
jurisdiction of any Federal or state court in the State of New York,
County of New York, (B) waive, and pursuant to the Underwriting
Agreement has legally, validly, effectively and irrevocably waived, any
objection to the laying of venue in any court in the State of New York,
County of New York and (C) agree, and pursuant to the Underwriting
Agreement has legally, validly, effectively and irrevocably agreed, not
to make any pleading or claim that any action, suit or proceeding
commenced pursuant to Section 15 of the Underwriting Agreement in any
Federal or state court in the State of New York, County of New York has
been brought in an inconvenient forum. The Company has the power to
designate, appoint and empower and pursuant to the Underwriting
Agreement has legally, validly, effectively and irrevocably designated,
appointed and empowered an agent for service of process in the
Underwriting Agreement in any Federal or state court in the State of
New York, County of New York as provided in Section 15 of the
Underwriting Agreement.
(x) A final and conclusive judgment in personam of the courts of
the United States or the State of New York, as the case may be, in
respect of the Underwriting Agreement would be recognized and enforced
by the courts of the Cayman Islands.
(xi) It is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of the Underwriting
Agreement that it or any other instrument relating thereto be
notarized, filed, recorded, registered or enrolled in any court, public
office, register or elsewhere in the Cayman Islands.
(xii) It is not necessary under the laws of the Cayman Islands that
an Underwriter be authorized, licensed or qualified to carry on
business in the Cayman Islands for their entry into, execution,
delivery, performance or enforcement of the Underwriting Agreement.
(xiii) The Underwriters will not become subject to any income,
franchise or other tax imposed by a governmental authority of the
Cayman Islands solely by reason of the transactions contemplated by the
Underwriting Agreement, and the execution, delivery and performance of
the Underwriting Agreement, and the transactions contemplated thereby
will not require the payment of any registration charge or stamp or
similar tax imposed by any governmental authority of the Cayman
Islands.
ANNEX III
_______________ __, 2002
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Equity Capital Markets
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD. LOCK-UP AGREEMENT
--------------------------------------------------------
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by Scottish Annuity & Life Holdings, Ltd., an exempted
company limited by shares organized and existing under the laws of the Cayman
Islands (the "Company"), of 5,000,000 shares of its ordinary shares, US$0.01 par
value (the "Ordinary Shares").
In order to induce you to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, ▇▇▇▇▇▇▇ & Co.
Inc. ("Bear ▇▇▇▇▇▇▇"), during the period from the date hereof until ninety (90)
days from the date of the final prospectus for the Offering (the "Lock-Up
Period"), the undersigned (a) will not, directly or indirectly, offer, sell,
agree to offer or sell, solicit offers to purchase, grant any call option or
purchase any put option with respect to, pledge, borrow or otherwise dispose of
any Relevant Security (as defined below), (b) will not establish or increase any
"put equivalent position" or liquidate or decrease any "call equivalent
position" with respect to any Relevant Security (in each case within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder), or (c) will not otherwise enter into
any swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any of the economic consequence of ownership of a
Relevant Security, whether or not such transaction is to be settled by delivery
of Relevant Securities, other securities, cash or other consideration. As used
herein "Relevant Security" means the Ordinary Shares, any other equity security
of the Company or any of its subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Ordinary Share or other such equity
security.
The undersigned hereby authorizes the Company during the Lock-Up Period
to cause any transfer agent for the Relevant Securities to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities
35
for which the undersigned is the beneficial but not the record holder, agrees
during the Lock-Up Period to cause the record holder to cause the relevant
transfer agent to decline to transfer, and to note stop transfer restrictions on
the stock register and other records relating to, such Relevant Securities. The
undersigned hereby further agrees that, without the prior written consent of
Bear ▇▇▇▇▇▇▇, during the Lock-Up Period the undersigned (x) will not file or
participate in the filing with the Securities and Exchange Commission of any
registration statement, or circulate or participate in the circulation of any
preliminary or final prospectus or other disclosure document with respect to any
proposed offering or sale of a Relevant Security and (y) will not exercise any
rights the undersigned may have to require registration with the Securities and
Exchange Commission of any proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
[signature page follows]
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. Delivery of a signed copy of this letter
by telecopier or facsimile transmission shall be effective as delivery of the
original hereof.
Very truly yours,
By:
---------------------------------
Print Name:
-------------------------