Exhibit 1.1
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ENDURANCE SPECIALTY HOLDINGS LTD.
9,600,000 Ordinary Shares
PURCHASE AGREEMENT
Dated: , 2003
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Table of Contents
Page
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PURCHASE AGREEMENT ........................................................... 1
SECTION 1. Representations and Warranties..........................3
(a) Representations and Warranties by the Company..........3
(i) Compliance with Registration Requirements....3
(ii) Independent Accountants......................4
(iii) Financial Statements.........................4
(iv) No Material Adverse Change in Business.......4
(v) Good Standing of the Company.................5
(vi) Good Standing of Subsidiaries................5
(vii) Capitalization...............................5
(viii) Authorization and Execution of Agreement.....6
(ix) Authorization and Description of Securities..6
(x) Absence of Defaults and Conflicts............6
(xi) Financial Assistance.........................7
(xii) Absence of Labor Dispute.....................7
(xiii) Absence of Proceedings.......................7
(xiv) Accuracy of Exhibits.........................7
(xv) Possession of Intellectual Property..........7
(xvi) Absence of Further Requirements..............8
(xvii) Licenses and Permits.........................8
(xviii) Compliance with Insurance Laws...............8
(xix) Statutory Financial and Tax Returns..........9
(xx) Retrocession................................10
(xxi) Tax Liabilities and Reserves................10
(xxii) Bermuda Tax Assurance.......................10
(xxiii) Internal Controls...........................10
(xxiv) Property and Leases.........................10
(xxv) Investment Company Act......................11
(xxvi) Stamp Duty, Excise Tax, Etc.................11
(xxvii) Currency Exchange Control...................11
(xxviii) Reserved Securities.........................12
(xxix) Registration Rights.........................12
(xxx) No Restrictions on Subsequent Transfers.....12
(b) Officer's Certificates................................12
SECTION 2. Sale and Delivery to Underwriters; Closing.............12
(a) Initial Securities....................................12
(b) Option Securities.....................................12
(c) Payment...............................................13
(d) Denominations; Registration...........................13
(e) Appointment of Qualified Independent Underwriter......13
(f) U.K. Selling Restrictions.............................14
SECTION 3. Covenants of the Company...............................14
(a) Compliance with Securities Regulations and Commission
Requests.............................................14
(b) Filing of Amendments..................................14
(c) Delivery of Registration Statements...................14
(d) Delivery of Prospectus................................15
(e) Continued Compliance with Securities Laws.............15
(f) Blue Sky Qualifications...............................15
(g) Rule 158..............................................16
(h) Use of Proceeds.......................................16
(i) Listing...............................................16
(j) Restriction on Sale of Securities.....................16
(k) Reporting Requirements................................16
(l) Compliance with NASD Rules............................16
(m) Compliance with Rule 463..............................17
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SECTION 4. Payment of Expenses....................................17
(a) Expenses..............................................17
(b) Termination of Agreement..............................18
SECTION 5. Conditions of Underwriters' Obligations................18
(a) Effectiveness of Registration Statement...............18
(b) Opinion of Counsel for Company........................18
(c) Opinion of Bermuda Counsel for Company................18
(d) Opinion of United Kingdom Counsel for Company.........18
(e) Opinion of Counsels for Underwriters..................19
(f) Officers' Certificate.................................19
(g) Accountant's Comfort Letter...........................19
(h) Bring-down Comfort Letter.............................19
(i) Approval of Listing...................................19
(j) No Objection..........................................20
(k) Lock-up Agreements....................................20
(l) Delivery of Prospectus................................20
(m) Conditions to Purchase of Option Securities...........20
(i) Officers' Certificate.......................20
(ii) Opinion of Counsel for Company..............20
(iii) Opinion of Counsel for Underwriters.........20
(iv) Bring-down Comfort Letter...................20
(n) Additional Documents..................................21
(o) Termination of Agreement..............................21
SECTION 6. Indemnification........................................21
(a) Indemnification of Underwriters.......................21
(b) Indemnification of Company, Directors and Officers....22
(c) Actions against Parties; Notification.................22
(d) Indemnification for Reserved Securities...............23
(e) Control Persons.......................................23
SECTION 7. Contribution...........................................23
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery...............................................24
SECTION 9. Termination of Agreement...............................24
(a) Termination; General..................................24
(b) Liabilities...........................................25
SECTION 10. Default by One or More of the Underwriters.............25
SECTION 11. Notices................................................26
SECTION 12. Parties................................................26
SECTION 13. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE...26
SECTION 14. Waiver of Immunity.....................................27
SECTION 15. Effect of Headings.....................................27
SCHEDULES
Schedule A - List of Underwriters...............................Sch A-1
Schedule B - Pricing Information................................Sch B-1
Schedule C - List of Persons subject to Lock-up.................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Outside Counsel............A-1
Exhibit B - Form of Opinion of Company's Bermuda Counsel............B-1
Exhibit C - Form of Opinion of Company's United Kingdom Counsel.....C-1
Exhibit D - Form of Lock-up Letter..................................D-1
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ENDURANCE SPECIALTY HOLDINGS LTD.
(a Bermuda holding company)
9,600,000 Ordinary Shares
(Par Value $1.00 Per Share)
PURCHASE AGREEMENT
, 2003
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
X.X. Xxxxxx Securities Inc.
Credit Suisse First Boston LLC
Deutsche Bank Securities Inc.
as Representatives of the several Underwriters
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
000 Xxxxx Xxxxxx
North Tower - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Endurance Specialty Holdings Ltd., an exempted company incorporated in
Bermuda as a holding company (the "Company"), confirms its agreement with
Xxxxxxx, Xxxxx & Co. ("Goldman"), Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Goldman and Xxxxxxx Xxxxx are acting as lead representatives
(in such capacity, the "Lead Representatives"), with respect to the issue and
sale by the Company and the purchase by the Underwriters, acting severally and
not jointly, of the respective numbers of ordinary shares, par value U.S. $1.00
per share, of the Company ("Ordinary Shares") set forth in said Schedule A, and
with respect to the grant by the Company to the Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof to purchase all
or any part of 1,440,000 additional Ordinary Shares to cover over-allotments, if
any. The aforesaid 9,600,000 Ordinary Shares (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the
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1,440,000 Ordinary Shares subject to the option described in Section 2(b) hereof
(the "Option Securities") are hereinafter called, collectively, the
"Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Lead Representatives deem advisable
after this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to 288,000 shares of the
Initial Securities to be purchased by the Underwriters (the "Reserved
Securities") shall be reserved for sale by the Underwriters to eligible
directors, officers and employees of the Company and its subsidiaries, as part
of the distribution of the Securities by the Underwriters, subject to the terms
of this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. ("NASD") and all other
applicable laws, rules and regulations. To the extent that such Reserved
Securities are not orally confirmed for purchase by such eligible directors,
officers and employees by the end of the first business day after the date of
this Agreement, such Reserved Securities may be offered to the public as part of
the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-102026) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus. Promptly after
execution and delivery of this Agreement, the Company will prepare and file a
prospectus with the Registrar of Companies in Bermuda pursuant to the laws of
Bermuda, and either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). The information included in any prospectus used in
connection with the offering and sale of the Securities (the "Form of
Prospectus") or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of Prospectus used before such registration
statement became effective, and any prospectus that omitted, as applicable, the
Rule 430A Information or the Rule 434 Information, that was used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus." Such registration statement, including
the exhibits thereto and schedules thereto at the time it became effective and
including the Rule 430A Information and the Rule 434 Information, as applicable,
is herein called the "Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final Form of Prospectus in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary Prospectus dated 2003 together with the applicable Term Sheet and
all references in this Agreement to the date of such Prospectus shall
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mean the date of the applicable Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus, or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b), hereof and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and any
preliminary prospectus and any supplement thereto or prospectus wrapper
prepared in connection therewith, at their respective times of issuance
and at the Closing Time, complied and will comply in all material
respects with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus and such preliminary prospectus,
as amended or supplemented, if applicable, are distributed in
connection with the offer and sale of Reserved Securities. Neither the
Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectus or any amendments or
supplements thereto were issued and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different", as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to
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the Company in writing by any Underwriter through the Lead
Representatives expressly for use in the Registration Statement or the
Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The consolidated financial
statements included in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly, in all
material respects, the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; except as
otherwise disclosed in the Registration Statement and Prospectus, said
financial statements have been prepared in conformity with United
States generally accepted accounting principles ("U.S. GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly, in all
material respects, in accordance with U.S. GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus and
Registration Statement present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The non-U.S. GAAP ratios and other statistical
data contained in the Registration Statement and the Prospectus were
derived from statutory financial information of Endurance Specialty
Insurance Ltd. ("Endurance Bermuda") prepared in conformity with the
accounting practices required or permitted by applicable Insurance Laws
(as defined below) of Bermuda or the financial statements of the
Company and its consolidated subsidiaries prepared in conformity with
U.S. GAAP, and present fairly the information purported to be shown.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or
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distribution of any kind declared, paid or made by the Company on any
class of its share capital.
(v) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as an exempted company in good
standing under the laws of Bermuda and has the necessary corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign company or corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each of Endurance Bermuda,
Endurance Worldwide Insurance Limited ("Endurance U.K.") and Endurance
Reinsurance Corporation of America ("Endurance U.S.") (each, a
"Designated Subsidiary" and, collectively, the "Designated
Subsidiaries") has been duly incorporated or organized and is validly
existing as a company or corporation in good standing under the laws of
the jurisdiction of its incorporation or organization and has the
necessary corporate power to own, lease and operate its properties and
to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding share capital or capital stock of each such Designated
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of share capital or capital stock of any Designated Subsidiary
was issued in violation of the preemptive or similar rights of any
securityholder of such Designated Subsidiary. Except for Endurance
Worldwide Holdings Limited ("Endurance U.K. Holdings") and Endurance
U.S. Holdings Corp. ("Endurance U.S. Holdings"), both of which are
immaterial and are not "significant subsidiaries" of the Company as
such term is defined in Rule 1-02 of Regulation S-X of the rules and
regulations of the Commission under the 1933 Act, the Designated
Subsidiaries are the only subsidiaries of the Company. Each of
Endurance U.K. Holdings and Endurance U.S. Holdings has been duly
organized and is validly existing as a company or corporation in good
standing under the laws of the jurisdiction of its organization or
incorporation.
(vii) Capitalization. The authorized, issued and outstanding
share capital of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements, warrants or employee benefit plans referred
to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus). Based solely on
the Certified Registers of Members: (A) all of the currently issued and
outstanding shares of share capital of both
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the Company and Endurance Bermuda have been duly and validly authorized
and issued and are fully paid and non-assessable (which term when used
herein shall mean that no further sums are required to be paid by the
holders thereof in connection with the issue of such shares)
(collectively, the "Outstanding Shares"); (B) all of the currently
issued and outstanding shares of Endurance Bermuda are registered
solely in the name of the Company and are free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and (C) none of the Outstanding Shares were issued in violation
of the preemptive or other similar rights of any member of the Company
or Endurance Bermuda. Except as set forth in the Prospectus, there are
no outstanding options, warrants or other rights requiring the issuance
of, and there are no commitments, plans or arrangements to issue, any
shares of share capital of the Company or any of its subsidiaries or
any security convertible into or exchangeable or exercisable for any
shares of share capital of the Company or any of it subsidiaries. The
form of certificates for the Securities conforms to the requirements of
the laws of Bermuda and the New York Stock Exchange ("NYSE").
(viii) Authorization and Execution of Agreement. This
Agreement has been duly authorized, executed and delivered by the
Company.
(ix) Authorization and Description of Securities. The
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement, and, when issued and delivered
by the Company pursuant to this Agreement, against payment of the
consideration set forth herein will be validly issued, fully paid and
non-assessable; the Ordinary Shares conform, in all material respects,
to all statements relating thereto contained in the Prospectus and such
description conforms, in all material respects, to the rights set forth
in the instruments defining the same; no holder of the Securities will
be subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its Designated Subsidiaries is in violation of its charter,
memorandum of association, bye-laws, by-laws or similar incorporation
or organizational documents or in violation or default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
under the material agreements or instruments that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated in
this Agreement, and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its
obligations under this Agreement have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a
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breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant
to, the Agreements and Instruments (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not result in
a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter, memorandum of association,
bye-laws, by-laws or similar organizational documents of the Company or
any subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any subsidiary or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any subsidiary.
(xi) Financial Assistance. On the date hereof and upon the
issuance of the Securities, the Company is and will be in compliance
with Section 39 and/or entitled to one or more of the exclusions
therefrom set forth in Section 39A of the Companies Act 1981 of Bermuda
(the "Companies Act")."
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Designated Subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or any Designated Subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary or the properties or assets thereof, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which would reasonably be expected to result in
a Material Adverse Effect, or which would reasonably be expected to
materially and adversely affect the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, would
not reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described and filed as required.
(xv) Possession of Intellectual Property. The Company and the
Designated Subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent
7
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by them except where the failure to own or possess, or to be
able to acquire such Intellectual Property, would not have a Material
Adverse Effect, and neither the Company nor any of the Designated
Subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect
the interest of the Company or any of its Designated Subsidiaries
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
exemption, qualification or decree of, any court or governmental
authority or agency or any sub-division thereof is necessary or
required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities under this Agreement or the consummation of the transactions
contemplated by this Agreement, except (i) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and state securities or blue sky laws, (ii) such as have
been obtained under the laws and regulations of jurisdictions outside
the United States in which the Reserved Securities are offered, (iii)
such as have been obtained from the Bermuda Monetary Authority and (iv)
the Prospectus will be filed at the Registrar of Companies in Bermuda
pursuant to the laws of Bermuda.
(xvii) Licenses and Permits. Each of the Company and its
subsidiaries possesses all consents, authorizations, approvals, orders,
licenses, certificates, or permits issued by any regulatory agencies or
bodies (collectively, "Permits") which are necessary to conduct the
business now conducted by it as described in the Prospectus, except
where the failure to possess such Permits, individually or in the
aggregate, would not have a Material Adverse Effect; all of such
Permits are valid and in full force and effect, except where the
invalidity of such Permits or the failure to be in full force and
effect, individually or in the aggregate, would not have a Material
Adverse Effect. There is no pending, or to the Company's knowledge,
threatened action, suit, proceeding or investigation against or
involving the Company and its subsidiaries (and the Company knows of no
reasonable basis for any such action, suit, proceeding or
investigation) that individually or in the aggregate would reasonably
be expected to lead to the revocation, modification, termination,
suspension or any other material impairment of the rights of the holder
of any such Permit which revocation, modification, termination,
suspension or other material impairment would have a Material Adverse
Effect.
(xviii) Compliance with Insurance Laws. Except as described in
the Prospectus, each of the Company and its subsidiaries is duly
licensed as a holding company or as an insurer or reinsurer, as the
case may be, under the insurance laws (including laws that relate to
companies that control insurance companies) and the rules, regulations
and
8
interpretations of the insurance regulatory authorities thereunder
(collectively, "Insurance Laws"), of each jurisdiction in which the
conduct of its business as described in the Prospectus requires such
licensing, except for such jurisdictions in which the failure of the
Company and its subsidiaries to be so licensed would not, individually
or in the aggregate, have a Material Adverse Effect. Each of the
Company and its Designated Subsidiaries has made all required filings
under applicable holding company statutes or other Insurance Laws in
each jurisdiction where such filings are required, except for such
jurisdictions in which the failure to make such filings would not,
individually or in the aggregate, have a Material Adverse Effect.
Except as described in the Prospectus, each of the Company and its
Designated Subsidiaries has all other necessary authorizations,
approvals, orders, consents, certificates, permits, registrations and
qualifications of and from all insurance regulatory authorities
necessary to conduct their respective businesses as described in the
Prospectus and all of the foregoing are in full force and effect,
except where the failure to have such authorizations, approvals,
orders, consents, certificates, permits, registrations or
qualifications or their failure to be in full force and effect would
not, individually or in the aggregate, have a Material Adverse Effect.
Except as otherwise described in the Prospectus, none of the Company or
any of its Designated Subsidiaries has received any notification from
any insurance regulatory authority or other governmental authority in
the United States, Bermuda, the United Kingdom or elsewhere to the
effect that any additional authorization, approval, order, consent,
certificate, permit, registration or qualification is needed to be
obtained by either the Company or any of its Designated Subsidiaries,
except where the failure to have such additional authorization,
approval, order, consent, certificate, permit, registration or
qualification would not, individually or in the aggregate, have a
Material Adverse Effect. Except as otherwise described in the
Prospectus, no insurance regulatory authority has issued to the Company
or any Designated Subsidiary any order impairing, restricting or
prohibiting (A) the payment of dividends by the Company or any of its
Designated Subsidiaries, (B) the making of a distribution
on any Designated Subsidiary's capital stock, (C) the repayment to the
Company of any loans or advances to any Designated Subsidiaries from
the Company or (D) the transfer of any Designated Subsidiaries property
or assets to the Company or any other subsidiary of the Company.
(xix) Statutory Financial and Tax Returns. Each of the
Company, Endurance Bermuda, Endurance U.K. and Endurance U.S. has filed
all statutory financial returns, reports, documents and other
information required to be filed pursuant to the applicable Insurance
Laws of Bermuda, the United Kingdom or the State of New York, as the
case may be, and has duly paid all material taxes (including franchise
taxes and similar fees) it is required to have paid under the
applicable Insurance Laws of Bermuda, the United Kingdom or the State
of New York, as the case may be, except where the failure, individually
or in the aggregate, to file such returns, reports, documents or
information or to pay such taxes would not reasonably be expected to
have a Material Adverse Effect; and each of the Company, Endurance
Bermuda, Endurance U.K. and Endurance U.S. maintains its books and
records in accordance with the applicable Insurance Laws of Bermuda,
the United Kingdom or the State of New York, as the case may be, except
where the failure to so maintain its books and records, singly or in
the aggregate, would not have a Material Adverse Effect. Endurance U.K.
does not provide insurance to
9
persons in, nor has it established a branch or place of business in,
any member state of the European Economic Area other than the United
Kingdom.
(xx) Retrocession. Except as disclosed in the Prospectus, none
of the Company nor any of the Designated Subsidiaries is a party to any
retrocession treaties, contracts or arrangements material to the
business or operations of the Company or any of the Designated
Subsidiaries. The retrocession treaties, contract or arrangements
disclosed in the Prospectus are in full force and effect, and none of
the Company nor any Designated Subsidiary is in violation or default in
the performance or observance of any obligation, agreement, covenant or
condition contained therein, except where any such violation or default
would not, individually or in the aggregate, have a Material Adverse
Effect.
(xxi) Tax Liabilities and Reserves. Any tax returns required
to be filed by the Company or any of its subsidiaries in any
jurisdiction have been filed and any taxes, including any withholding
taxes, excise taxes, penalties and interest, assessments and fees and
other charges due or claimed to be due from such entities have been
paid, other than any of those being contested in good faith and for
which adequate reserves have been provided or any of those currently
payable without penalty or interest, except to the extent that the
failure to so file or pay would not result in a Material Adverse
Effect.
(xxii) Bermuda Tax Assurance. The Company and Endurance
Bermuda have received from the Bermuda Minister of Finance an assurance
under The Exempted Undertakings Tax Protection Act, 1966 of Bermuda to
the effect set forth in the Prospectus under the caption "Material Tax
Considerations--Certain Bermuda Tax Considerations", and the Company
has not received any notification to the effect (and is not otherwise
aware) that such assurance may be revoked or otherwise not honored by
the Bermuda government.
(xxiii) Internal Controls. The Company and the Designated
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general, or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxiv) Property and Leases. Neither the Company nor any of its
Designated Subsidiaries hold title to any real property. All of the
leases and subleases under which the Company or any of its Designated
Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any Designated Subsidiary
has any notice of any claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such Designated Subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease, except where the failure to have such leases in full
10
force and effect or the failure to have any such notice of any such
claim would not, individually or in the aggregate, have a Material
Adverse Effect.
(xxv) Investment Company Act. The Company is not and, solely
after giving effect to the offer and sale of the Securities and the
application of the proceeds thereof as described under the caption "Use
of Proceeds" in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(xxvi) Stamp Duty, Excise Tax, Etc. None of the Underwriters
or any subsequent purchasers of the Securities (other than purchasers
resident in Bermuda for Bermuda exchange control purposes) is subject
to any stamp duty, transfer, excise or similar tax imposed in Bermuda
in connection with the issuance, offering or sale of the Securities to
the Underwriters or to any subsequent purchasers.
(xxvii) Currency Exchange Control. There are no currency
exchange control laws or withholding taxes, in each case of Bermuda,
that would be applicable to the payment of dividends (i) on the
Securities by the Company (other than as may apply to residents of
Bermuda for Bermuda exchange control purposes) or (ii) by the any of
the Company's subsidiaries to the Company. The Bermuda Monetary
Authority has designated both the Company and Endurance Bermuda as
non-resident for exchange control purposes and has granted permission
for the issue and free transferability of the Securities being offered
pursuant to the Registration Statement as long as the Securities are
listed on the New York Stock Exchange to and among persons who are
non-residents of Bermuda for exchange control purposes (including
permission for the issue and free transferability of up to 20% of the
shares of the Company to and among persons who are resident of Bermuda
for exchange control purposes), subject to the condition that the
Ordinary Shares of the Company shall be listed on the NYSE. Such
permission has not been revoked and is in full force and effect, and
the Company is not aware of any proceedings planned or threatened for
the revocation of such permission. The Company and Endurance Bermuda
are "exempted companies" under Bermuda law and have not (i) acquired
and do not hold any land for its business in Bermuda, other than that
held by way of lease or tenancy for terms of not more than 50 years,
without the express authorization of the Bermuda Minister of Finance,
(ii) acquired and do not hold land by way of lease or tenancy for terms
of not more than 21 years in order to provide accommodation or
recreational facilities for its officers and employees, without the
express authority of the Minister of Finance of Bermuda, (iii) taken
mortgages on land in Bermuda to secure an amount in excess of $50,000,
without the consent of the Bermuda Minister of Finance, (iv) acquired
any bonds or debentures secured by any land in Bermuda, except bonds or
debentures issued by the government of Bermuda or a public authority of
Bermuda, or (v) conducted their business in a manner that is prohibited
for "exempted companies"
11
under Bermuda law. Neither the Company nor Endurance Bermuda has
received notification from the Bermuda Monetary Authority or any other
Bermuda governmental authority of proceedings relating to the
modification or revocation of its designation as non-resident for
exchange control purposes, its permission to issue and transfer the
Securities, or its status as an "exempted company."
(xxviii) Reserved Securities. The Company has not offered, or
caused the Underwriters to offer, the Reserved Securities to any person
with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or
type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company
or its products.
(xxix) Registration Rights. Except as disclosed in the
Prospectus and the Registration Statement, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 0000 Xxx.
(xxx) No Restrictions on Subsequent Transfers. Except as
described in the Prospectus, there are no restrictions on subsequent
transfers of the Securities under the laws of Bermuda or the United
States.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Lead Representatives or
to counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 1,440,000 Ordinary Shares at
the price per share set forth in Schedule B, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Lead Representatives to the Company
setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery for the
Option Securities (a "Date of Delivery") shall be determined by the Lead
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
12
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Lead Representatives
in their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., or at such other place as shall be
agreed upon by the Lead Representatives and the Company, at 9:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time)
on any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Lead
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Lead
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Lead Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Lead Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Lead Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Either or both of the Lead Representatives, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Lead Representatives may request in writing at
least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Lead Representatives in The City of New York not later than
10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
(e) Appointment of Qualified Independent Underwriter. The Company
hereby confirms its engagement of Xxxxxxx Xxxxx as, and Xxxxxxx Xxxxx hereby
confirms its agreement with the Company to render services as, a "qualified
independent underwriter" within the meaning of Rule 2720 of the Conduct Rules of
the National Association of Securities Dealers, Inc. with respect to the
offering and sale of the Securities. Xxxxxxx Xxxxx, solely in its capacity as
qualified independent underwriter and not otherwise, is referred to herein as
the "Independent Underwriter."
13
(f) U.K. Selling Restrictions. Each Underwriter represents, warrants
and agrees that: (i) it has not offered or sold and, prior to the expiry of a
period of six months from the closing of the offering of the Ordinary Shares,
will not offer or sell any Ordinary Shares to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has only communicated
or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the issue or sale of any
Ordinary Shares in circumstances in which section 21(1) of the FMSA does not
apply to the Company; and (iii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Ordinary Shares in, from or otherwise involving the United
Kingdom.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Lead Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Lead
Representatives notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus,
will furnish the Lead Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Lead Representatives
or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Representatives and counsel for the Underwriters,
without charge, signed copies of
14
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the Lead Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will,
prior to 5:00 p.m. on the business day next succeeding the date of this
Agreement and from time to time, furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters or counsel for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of such counsel, at any such time to amend the Registration Statement or amend
or supplement any Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Lead Representatives may reasonably
designate and to maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign company or corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to
15
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b) Registration
Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its reasonable best efforts to effect
the listing of the Ordinary Shares (including the Securities) on the NYSE.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of the Lead Representatives, (i) directly or indirectly, offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any Ordinary Shares, or any options, rights or warrants to
purchase any Ordinary Shares, or any securities convertible into, exchangeable
or exercisable for or that represent the right to receive Ordinary Shares, or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) engage in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Ordinary Shares, whether any such hedging or transaction
described in clause (i) or (ii) above is to be settled by delivery of Ordinary
Shares or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to the Securities to be sold hereunder. The Company may,
however, grant options to purchase Ordinary Shares and issue Ordinary Shares
upon the conversion of outstanding Class A shares, par value U.S. $1.00 per
share, of the Company ("Class A Shares"), the exercise of warrants for Ordinary
Shares or Class A Shares, or the exercise of outstanding options under the
existing stock option plan (it being understood that any Ordinary Shares so
issued shall be subject to the terms and restrictions of the Lock-up Agreement
as attached hereto as Exhibit E).
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The Lead
Representatives will notify the Company as to which persons will need to be so
restricted. At the request of the Lead Representatives, the Company will direct
the transfer agent to place a stop transfer restriction upon such securities for
such period of time. Should the Company release, or seek to release, from such
restrictions any of the Reserved
16
Securities, the Company agrees to reimburse the Lead Representatives for any
reasonable expenses (including, without limitation, legal expenses) they incur
in connection with such release.
(m) Compliance with Rule 463. The Company will file with the Commission
such reports on the use of proceeds as may be required pursuant to Rule 463 of
the 1933 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any share or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto (such fees and disbursements
of counsel not to exceed $10,000), (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and the
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the cost of printing certificates representing
the Securities, (ix) the fees and expenses of any transfer agent or registrar
for the Securities, (x) the fees and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Securities, including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and a proportional share of the cost of any aircraft chartered in
connection with the road show, (xi) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities, (xii)
the fees and expenses incurred in connection with the preparation and filing of
the registration statement on Form 8-A relating to the Securities and the
listing of the Securities on the NYSE, (xiii) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to directors, officers and
employees of the Company and its subsidiaries and (xiv) the fees and expenses of
the Independent Underwriter; provided, however, except as provided in this
Section and Sections 6 and 9(b) hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
17
(b) Termination of Agreement. If this Agreement is terminated by the
Lead Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Representatives shall have received (i) the favorable opinion, dated as of
Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, outside counsel for
the Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit A hereto and (ii)
the favorable opinion, dated as of the Closing Time, of Xxxx X. Del Col, General
Counsel of the Company, to the effect that the execution and delivery by the
Company of the Purchase Agreement and the consummation by the Company of the
transactions contemplated thereby, including the issuance and sale of the
Securities, will not constitute a violation of, or a breach or default under,
the terms of any of the agreements or contracts filed as an exhibit to the
Registration Statement.
(c) Opinion of Bermuda Counsel for Company. At Closing Time, the Lead
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxx Xxxxxxxx & Xxxxx, special Bermuda counsel for the Company, in
form and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit B hereto.
(d) Opinion of United Kingdom Counsel for Company. At Closing Time, the
Lead Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxx Xxxx, special United Kingdom counsel for the Company, in
form and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit C hereto.
18
(e) Opinion of Counsels for Underwriters. At Closing Time, the Lead
Representatives shall have received the favorable opinion, dated as of Closing
Time, of (i) LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., U.S. counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters with respect to the matters set forth in clauses (iii)
and (iv) and the penultimate paragraph of Exhibit A hereto, and (ii) Xxxxxxx
Xxxx & Xxxxxxx, Bermuda counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters in form
satisfactory to the Underwriters. In giving such opinion LeBoeuf, Lamb, Xxxxxx &
XxxXxx, L.L.P. may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States and the General Corporation Law of the State of Delaware, upon the
opinions of Xxxxxxx Xxxx & Xxxxxxx. Such counsels for the Underwriters may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(f) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Lead Representatives shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company, dated as
of Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to the Company's knowledge, threatened by the
Commission.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Lead Representatives shall have received from Ernst & Young a
letter dated such date, in form and substance satisfactory to the Lead
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Lead
Representatives shall have received from Ernst & Young a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the NYSE, subject only to official notice of
issuance.
19
(j) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the Lead
Representatives shall have received a Lock-up Agreement substantially in the
form of Exhibit D hereto signed by the persons listed on Schedule C hereto.
(l) Delivery of Prospectus. The Company shall have complied with the
provisions of Section 3(d) hereof with respect to the furnishing of the
prospectus on the business day next succeeding the date of this Agreement.
(m) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Lead Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, outside counsel for the
Company, together with the favorable opinion of Xxxx X. Del Col,
General Counsel of the Company, Xxxxxxx Xxxxxxxx & Xxxxx, special
Bermuda counsel for the Company, and Xxxxxx Xxxx, special United
Kingdom counsel for the Company, each in form and substance reasonably
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Sections 5(b), 5(c) and 5(e) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinions of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., U.S. counsel for
the Underwriters, and Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel for the
Underwriters, dated such Date of Delivery, each relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the respective opinion required by Section 5(d)
hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst & Young,
in form and substance satisfactory to the Lead Representatives and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Lead Representatives pursuant
to Section 5(h) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
20
(n) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Lead Representatives and counsel for the Underwriters.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Lead Representatives by notice to the Company at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. (1) The Company will indemnify and
hold harmless each Underwriter as follows:
(i) against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(ii) against any and all losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become
subject, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based (A) the violation
of any applicable laws or regulations of foreign jurisdictions where
Reserved Securities have been offered and (B) any untrue statement or
alleged untrue statement of a material fact included in the supplement
or prospectus wrapper material distributed in Bermuda, the United
States, the United Kingdom and Switzerland in connection with the
reservation and sale of the Reserved Securities to eligible directors,
officers and employees of the Company and its subsidiaries or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case
21
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Lead Representatives expressly for use therein.
(2) In addition to and without limitation of the Company's
obligation to indemnify Xxxxxxx Xxxxx as an Underwriter, the Company also agrees
to indemnify and hold harmless the Independent Underwriter from and against any
and all any and all losses, claims, damages, liabilities and expenses, as
incurred, as a result of the Independent Underwriter's participation as a
"qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc. in
connection with the offering of the Securities.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter will indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement, or alleged untrue
statement or omission, or alleged omission was made in any preliminary
prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Lead Representatives
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Actions against Parties; Notification. Promptly after receipt by an
indemnified party under subsection (a) and (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection to the extent it is not materially prejudiced as a result thereof. In
case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation; provided,
that, if indemnity is sought pursuant to Section 6(a)(2), then, in addition to
the fees and
22
expenses of such counsel for the indemnified parties, the indemnifying party
shall be liable for the reasonable fees and expenses of not more than one
counsel (in addition to any local counsel) separate from its own counsel and
that of the other indemnified parties for the Independent Underwriter in its
capacity as a "qualified independent underwriter" in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances if, in the
reasonable judgment of the Independent Underwriter, there may exist a conflict
of interest between the Independent Underwriter and the other indemnified
parties. Any such separate counsel for the Independent Underwriter shall be
designated in writing by the Independent Underwriter. No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees, promptly upon a
request, in writing to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of eligible directors, officers and employees
of the Company and its subsidiaries to pay for and accept delivery of Reserved
Securities which, by the end of the first business day following the date of
this Agreement, were subject to a properly confirmed agreement to purchase.
(e) Control Persons. The obligations of the Company under this Section
6 shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter or the Independent Underwriter within the meaning of
the Act; and the obligations of the Underwriters under this Section 6 shall be
in addition to any liability which the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
within the meaning of the Act.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 is unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
Section 6, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 6(c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
23
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person, if any, who controls a Underwriter within the meaning of the Act
shall have the same rights to contribution as such Underwriter, and each officer
and director of the Company, and each person, if any, who controls the Company
within the meaning of the Act or shall have the same rights to contribution as
the Company. The Underwriters' obligations in this Section 7 to contribute are
several in proportion to their respective underwriting obligations and not
joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus (exclusive
of any supplement thereto), any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of
24
the Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or in the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Lead Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the NYSE, or if trading generally on the American
Stock Exchange or the NYSE or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (iv) if a banking moratorium has
been declared by either federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Lead Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters reasonably acceptable to
the Company and the Lead Representatives, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth; if, however, the Lead Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
25
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Lead Representatives or the Company shall have
the right to postpone Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for a Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Lead Representatives at Xxxxxxx, Xxxxx &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Registration
Department and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, World
Financial Center, 000 Xxxxx Xxxxxx, Xxxxx Tower - 0xx Xxxxx Xxx Xxxx, Xxx Xxxx
00000, attention: Syndicate Department; and notices to the Company shall be
directed to it at Xxxxx Xxxxx, 0 Xxx-xx-Xxxxx Xxxx, Xxxxxxxx XX 08, Bermuda,
attention: General Counsel.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm, company or corporation, other than
the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm, company or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
EACH OF THE PARTIES HERETO IRREVOCABLY (i) AGREES THAT ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST THE COMPANY BROUGHT BY ANY UNDERWRITER OR BY ANY
PERSON WHO CONTROLS ANY UNDERWRITER ARISING OUT OF OR BASED UPON THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN ANY UNITED STATES
FEDERAL OR STATE COURT IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, STATE
OF NEW YORK (A "NEW YORK COURT"), (ii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH PROCEEDING AND (iii) SUBMITS TO THE EXCLUSIVE
JURISDICTION OF SUCH NEW YORK COURT IN
26
ANY SUCH SUIT, ACTION OR PROCEEDING. THE COMPANY EXPRESSLY CONSENTS TO THE
JURISDICTION OF ANY NEW YORK COURT IN RESPECT OF ANY SUCH ACTION, AND WAIVES ANY
OTHER REQUIREMENTS OF OR OBJECTIONS TO PERSONAL JURISDICTION WITH RESPECT
THERETO.
The Company hereby irrevocably appoints CT Corporation System in New
York City as its agent for service of process in any suit, action or proceeding
described in the preceding paragraph. The Company agrees that service of process
in any such suit, action or proceeding may be made upon it at the office of its
agent. The Company waives, to the fullest extent permitted by law, any other
requirements of or objections to personal jurisdiction with respect thereto. The
Company represents and warrants that its agent has agreed to act as agent for
service of process, and agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect.
SECTION 14. Waiver of Immunity. To the extent that the Company has or
hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, from jurisdiction of any court of from set-off or
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution or otherwise) with respect to itself or
any of its property, it irrevocable waives, to the fullest extent permitted by
law, such immunity in respect of its obligations under this Agreement.
SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
ENDURANCE SPECIALTY HOLDINGS LTD.
By: ________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
X.X. Xxxxxx Securities Inc.
Credit Suisse First Boston LLC
Deutsche Bank Securities Inc.
By: ___________________________________________
(XXXXXXX, XXXXX & CO)
By: XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: ___________________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
28
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
Xxxxxxx, Sachs & Co.................................................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated..................
X.X. Xxxxxx Securities Inc..........................................
Credit Suisse First Boston LLC......................................
Deutsche Bank Securities Inc........................................
Total............................................................... 9,600,000
Sch A - 1
SCHEDULE B
ENDURANCE SPECIALTY HOLDINGS LTD.
9,600,000 Ordinary Shares
(Par Value $1.00 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per ordinary share for the Securities to be paid
by the several Underwriters shall be $ , being an amount equal to the
initial public offering price set forth above less $ per ordinary share;
provided that the purchase price per share for any Option Securities purchased
upon the exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not payable on
the Option Securities.
Sch B - 1
SCHEDULE C
List of Persons and Entities
Subject to Lock-Up
AON Corporation
AON Pension Plan
Capital Z Financial Services Fund II, LP
Capital Z Financial Services Private Fund II, L.P.
CCG Associates-AI, LLC
CCG Associates-QP, LLC
CCG Gp Fund, LLC
CCG Investment Fund-AI, LP
CCG Investments (BVI), LP
Combined Insurance Company of America
Combined Life Assurance Company of Europe Limited
Combined Specialty Insurance Company
DLJ Growth Overseas Partners, C.V.
First Plaza Group Trust
GCP Plan Investors L.P.
GM Capital Partners I, L.P.
London General Insurance Company Limited
LY-Endurance, LLC
Metro Center Investment Pte Ltd.
MLL Investments LLC
Perry European Fund, XX
Xxxxx European Fund, LTD.
Perry Partners International, Inc.
Perry Partners, XX
Xxxxxx Investments Employees' Securities Company I LLC
Xxxxxx Investments Employees' Securities Company II LLC
Xxxxxx Investments Holdings, LLC
Reservoir Capital Master Fund, L.P.
Reservoir Capital Partners, L.P.
Resource Life Insurance Company
Services Financiers CDPQ Inc.
Xxxxxxx X. Xxxx Living Trust
Sterling Life Insurance Company
Teachers Insurance And Annuity Association Of America
Xxxxxx X. Xxx (Alternative) Cayman Fund V, L.P.
Xxxxxx X. Xxx (Alternative) Fund V, L.P.
Xxxxxx X. Xxx (Alternative) Parallel Fund, L.P.
Xxxxxx X. Xxx Investors Limited Partnership
Xxxxxx X. Xxx Nominee Trust
TPG Dutch Parallel III, C.V.
TPG Endurance Investments (Cayman), L.P.
TPG Endurance Partners (Cayman), L.P.
Sch C-1
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxx
Xxxxxxxx X. Xxxxxx
Xxxxxxx X. XxXxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Spass
Xxxxxxx X. Xxxxxx
Xxxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxx X. Del Col
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxx
Xxxxxx Xxxxxx, Xx.
Sch C-2
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(a) Endurance U.S. Holdings has been duly incorporated and is validly
existing in good standing under the laws of the State of Delaware and has the
corporate power and corporate authority to own, lease and operate its properties
and to conduct its business, in each case as described in the Prospectus.
(b) Endurance U.S. has been duly incorporated and is validly existing
in good standing under the laws of the State of New York and has the corporate
power and corporate authority to own, lease and operate its properties and to
conduct its business, in each case as described in the Prospectus.
(c) The Purchase Agreement has been duly executed and delivered by the
Company, to the extent such execution and delivery are governed by the laws of
the State of New York.
(d) The execution and delivery by the Company of the Purchase Agreement
and the consummation by the Company of the transactions contemplated thereby,
including the issuance and sale of the Securities, will not (i) conflict with
the Endurance U.S. Declaration and Charter or the Endurance U.S. By-Laws, (ii)
constitute a violation of, or a breach or default under, the terms of any
Applicable Contract or (iii) violate or conflict with, or result in any
contravention of, any Applicable Law or any Applicable Order. Such counsel need
not express any opinion, however, as to whether the execution, delivery or
performance by the Company of the Purchase Agreement will constitute a violation
of, or a default under, any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or results of
operations of the Company or any of its subsidiaries.
(e) No Governmental Approval, which has not been obtained or taken and
is not in full force and effect, is required to authorize, or is required in
connection with, the execution or delivery of the Purchase Agreement by the
Company or the consummation by the Company of the transactions contemplated
thereby.
(f) To such counsel's knowledge, there are no legal or governmental
proceedings pending in or before any Governmental Authority to which the Company
is a party or to which any property of the Company is subject that are required
to be disclosed in the Prospectus pursuant to Item 103 of Regulation S-K of the
Rules and Regulations that are not so disclosed.
(g) The 5,000,000 shares of common stock, par value U.S.$1.00, of
Endurance U.S. shown by its stock record books as being issued and outstanding
immediately prior to the date hereof have been duly authorized and are validly
issued and are fully paid and nonassessable (except as provided by Section 108
of the New York Insurance Law and Section 630 of the New York Business
Corporation Law), and are free and clear of any preemptive rights or any similar
rights arising under the Endurance U.S. Declaration and Charter or the Endurance
U.S. By-Laws.
A-1
(h) The form of certificate used to evidence the Ordinary Shares
complies in all material respects with the applicable requirements of the New
York Stock Exchange.
(i) Except as described in the Prospectus under "Shares Eligible for
Future Sale--Registration Rights," no holders of Ordinary Shares or other equity
securities of the Company have rights under any Applicable Contract to require
the Company to effect the registration of the resale thereof under the
Securities Act or to require the Company to include such securities in the
securities being registered pursuant to the Registration Statement.
(j) The statements in the Prospectus under the caption "Underwriting,"
insofar as such statements purport to summarize certain provisions of the
Purchase Agreement, fairly summarize such provisions in all material respects.
(k) The statements in the Prospectus under the captions
"Management--Employment Agreements," "Description of Share Capital--Differences
in Corporate Law," "Description of Share Capital--Registration Rights
Agreement," "Certain Indebtedness," "Shares Eligible for Future Sale" and
"Regulatory Matters--U.S. Regulation," insofar as such statements purport to
constitute summaries of certain provisions of applicable law and of certain
provisions of the applicable contracts referred to therein, fairly summarize
such provisions in all material respects.
(l) The statements in the Prospectus under the captions "Shares
Eligible for Future Sale --Rule 144" and "Shares Eligible for Future Sale --Rule
144(k)" and in the last sentence of the paragraph entitled "--Sale of Restricted
Shares" under the caption "Shares Eligible for Future Sale," insofar as such
statements purport to constitute summaries of certain provisions of Rule 144
under the Securities Act, fairly summarize such provisions in all material
respects.
(m) The statements in the Prospectus under the captions "Material Tax
Considerations--Certain United States Federal Income Tax Considerations,"
insofar as such statements purport to constitute summaries of certain provisions
of applicable law referred to therein, fairly summarize such provisions in all
material respects.
(n) To such counsel's knowledge, there are no contracts or other
documents which are required to be filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have not
been filed as required.
(o) The Registration Statement, at the time it became effective, and
the Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act
and the Rules and Regulations, except that in each case we do not express any
opinion as to the financial statements, schedules and other financial data
included therein or excluded therefrom or the exhibits to the Registration
Statement, and, except to the extent expressly stated in paragraphs j, k, l and
m, we do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus.
(p) The Company is not and, solely after giving effect to the offer and
sale of the Securities and the application of the proceeds thereof as described
under the caption "Use of Proceeds" in the Prospectus, will not be an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
A-2
Such counsel has been orally advised by the Commission that the
Registration Statement was declared effective under the Securities Act at
p.m. on , 2003. Such counsel has been orally advised by the Commission
that no stop order suspending the effectiveness of the Registration Statement
has been issued and, to the best of its knowledge, no proceedings for that
purpose have been instituted or threatened by the Commission. The Prospectus
was filed with the Commission in the manner and within the time period required
by Rule 424(b) of the Rules and Regulations.
In addition, such counsel has participated in conferences with
officers and other representatives of the Company, counsel for the Company,
representatives of the independent accountants of the company and the
underwriters and its counsel at which the contents of the Registration Statement
and the Prospectus and related matters were discussed. Although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and have made no independent check or verification
thereof (except to the limited extent referred to in paragraphs j, k, l and m
above), on the basis of the foregoing, no facts have come to such counsel's
attention that have led it to believe that the Registration Statement, at the
time it became effective, contained an 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, as of its
date and as of the date hereof, contained or contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that such counsel expresses no opinion or belief with
respect to the financial statements, schedules and other financial data included
therein or excluded therefrom or the exhibits to the Registration Statement.
A-3
Exhibit B
FORM OF OPINION OF COMPANY'S BERMUDA COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(C)
(a) Each of the Company and Endurance Bermuda is an exempted company
incorporated with limited liability and existing under the laws of Bermuda. The
Company and Endurance Bermuda each possess the capacity to xxx and be sued in
its own name and each is in good standing under the laws of Bermuda. Each of the
Company and Endurance Bermuda has full corporate power and authority and all
permits, licenses and authorisations required by Bermuda law (which remain in
full force and effect) to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus.
(b) Endurance Bermuda is duly registered as a Class 4 insurer under The
Insurance Act 1978 and the regulations promulgated thereunder (together, the
"Insurance Act") and, accordingly, Endurance Bermuda is subject to regulation
and supervision in Bermuda and has Bermuda regulatory authority to conduct the
insurance business as described in the Prospectus; and based solely on the
Endurance Bermuda Certificates of Compliance, Endurance Bermuda has filed with
the appropriate Bermuda governmental authority (including regulatory authority)
all reports, documents or other information required to be filed under the
Insurance Act.
(c) The Company has all requisite corporate power and authority to (a)
execute and file the Registration Statement with the SEC under the Securities
Act, (b) enter into, execute or issue (as the case may be), deliver, and perform
its obligations under the Purchase Agreement and the form of certificate (the
"Certificate") for the Securities, (c) issue the Securities pursuant to the
Purchase Agreement and (d) take all action as may be necessary to complete the
transactions contemplated thereby.
(d) The (a) execution and filing of the Registration Statement with the
SEC under the Securities Act and (b) execution or issuance, delivery and
performance by the Company of the Purchase Agreement and the Certificate and the
transactions contemplated thereby have been duly authorised by all necessary
corporate action on the part of the Company.
(e) The Purchase Agreement has been duly executed and delivered by the
Company and constitutes legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms. The Registration
Statement has been duly executed by or on behalf of the Company.
(f) Except as provided in this paragraph, no consent, approval,
licence, order or authorisation of, filing with, or other act by or in respect
of, any governmental or public authority or court of Bermuda is required to be
obtained by the Company in connection with (a) the authorisation, execution or
filing of the Registration Statement and (b) the execution, delivery or
performance by the Company of the the Purchase Agreement and the Certificate
including, without limitation, the issue of and sale of Securities to the
Underwriters, or to ensure the legality, validity, and admissibility into
evidence, of the the Purchase Agreement and the Certificate. The permission of
the Bermuda Monetary Authority is required and letters of permissions have been
issued for (i) the "issue and free transferability of the ordinary shares in the
Company being offered pursuant to the Registration Statement, as long as the
shares are
B-1
listed on the New York Stock Exchange, to and among persons who are
non-residents of Bermuda for exchange control purposes" and (ii) the "issue and
the free transferability of up to 20% of shares of the Company to and among
persons who are resident of Bermuda for exchange control purposes." Pursuant to
the requirements of Part III of the Companies Xxx 0000 the Company is required
to file with the Registrar of Companies a copy of the Prospectus signed by or on
behalf of all the directors of the Company prior to or as soon as reasonably
practicable after publication of the Prospectus.
(g) The Securities to be sold and transferred to the Underwriters under
the Purchase Agreement have been duly authorised and when delivered to the
Underwriters against payment therefore in accordance with the terms of the
Purchase Agreement will be validly issued, fully paid, non-assessable shares of
the Company and will be free of any pre-emptive or similar rights.
(h) The form of the Certificate conforms with the requirements of
Bermuda law. The Purchase Agreement and the Certificate are in acceptable legal
form under the laws of Bermuda for enforcement thereof in Bermuda.
(i) The execution, delivery and performance by the Company of the
Purchase Agreement and the Certificate and the transactions contemplated thereby
including, without limitation, the issue of the Securities to the Underwriters
do not and will not violate, conflict with or constitute a default under (i) any
requirement of any law or any regulation of Bermuda or (ii) the Company's
Constitutional Documents.
(j) The transactions contemplated by the Purchase Agreement and the
Certificate are not subject to any currency deposit or reserve requirements in
Bermuda. The Company has been designated as "non-resident" for the purposes of
the Exchange Control Xxx 0000 and regulations made thereunder and there is no
restriction or requirement of Bermuda binding on the Company which limits the
availability or transfer of foreign exchange (i.e. monies denominated in
currencies other than Bermuda dollars) for the purposes of the performance by
the Company of its obligations under the Purchase Agreement, the Registration
Statement, the Prospectus and the Certificate.
(k) The financial obligations of the Company under the Purchase
Agreement and the Certificate rank at least pari passu in priority of payment
with all other unsecured and unsubordinated indebtedness (whether actual or
contingent) issued, created or assumed by the Company other than indebtedness
which is preferred by virtue of any provision of Bermuda law of general
application.
(l) The choice of the laws of the State of New York as the proper law
to govern the Purchase Agreement is a valid choice of law under Bermuda law and
such choice of law would be recognised, upheld and applied by the courts of
Bermuda as the proper law of the Purchase Agreement in proceedings brought
before them in relation to the Purchase Agreement, provided that (i) the point
is specifically pleaded; (ii) such choice of law is valid and binding under the
laws of the State of New York; and (iii) recognition would not be contrary to
public policy as that term is understood under Bermuda law.
(m) The submission by the Company to the exclusive jurisdiction of any
United States federal or state court in the borough of Manhattan, the City of
New York, State of New York pursuant to the Purchase Agreement is not contrary
to Bermuda law and would be recognised by the courts of Bermuda as a legal,
valid and binding submission to the jurisdiction of any United States federal or
state court in
B-2
the borough of Manhattan, the City of New York, State of New York, if such
submission is accepted by such courts and is legal, valid and binding under the
laws of the State of New York;
(n) The appointment by the Company of CT Corporation System as agent
for the receipt of any service of process in respect of any United States
federal or state court in the borough of Manhattan, the City of New York, State
of New York, in connection with any matter arising out of or in connection with
the Purchase Agreement is a valid and effective appointment, if such appointment
is valid and binding under the laws of the State of New York and if no other
procedural requirements are necessary in order to validate such appointment.
(o) A final and conclusive judgment of a competent foreign court
against the Company based upon the Purchase Agreement (other than a court of
jurisdiction to which The Judgments (Reciprocal Enforcement) Act, 1958 applies,
and it does not apply to the courts of the State of New York) under which a sum
of money is payable (not being a sum payable in respect of taxes or other
charges of a like nature, in respect of a fine or other penalty, or in respect
of multiple damages as defined in The Protection of Trading Interests Act 1981)
may be the subject of enforcement proceedings in the Supreme Court of Bermuda
under the common law doctrine of obligation by action on the debt evidenced by
the judgment of such competent foreign court. A final opinion as to the
availability of this remedy should be sought when the facts surrounding the
foreign court's judgment are known, but, on general principles, we would expect
such proceedings to be successful provided that: (i) the court which gave the
judgment was competent to hear the action in accordance with private
international law principles as applied in Bermuda; and (ii) the judgment is not
contrary to public policy in Bermuda, has not been obtained by fraud or in
proceedings contrary to natural justice and is not based on an error in Bermuda
law. Enforcement of such a judgment against assets in Bermuda may involve the
conversion of the judgment debt into Bermuda dollars, but the Bermuda Monetary
Authority has indicated that its present policy is to give the consents
necessary to enable recovery in the currency of the obligation.
(p) According to the records maintained in the Register of Companies at
the office of the Registrar of Companies as revealed by the Company Searches the
current address of the registered office of each of the Company and Endurance
Bermuda is 00 Xxxxx Xxxxxx, Xxxxxxxx XX 12, Bermuda.
(q) Neither the Company nor any of its assets or property enjoys, under
Bermuda law, immunity on the grounds of sovereignty from any legal or other
proceedings whatsoever or from enforcement, execution or attachment in respect
of its obligations under the Purchase Agreement and the Certificate.
(r) Based solely upon the Company Searches and the Litigation Searches:
(i) no litigation, arbitration or administrative or other
proceeding of or before any arbitrator or governmental
authority of Bermuda is pending against or affecting the
Company or Endurance Bermuda or against or affecting any
of either of their respective properties, rights,
revenues or assets; and
(ii) no notice to the Registrar of Companies of the passing of
a resolution of members or creditors of either of the
Company or Endurance Bermuda to wind up
B-3
said company, or the appointment of a liquidator or receiver
has been given. No petition to wind up either of the Company
or Endurance Bermuda, or application to reorganise either
company's affairs pursuant to a Scheme of Arrangement, or
application for the appointment of a receiver has been filed
with the Supreme Court.
(s) Each of the Company and Endurance Bermuda has received an assurance
from the Ministry of Finance granting an exemption, until 28 March 2016, from
the imposition of tax under any applicable Bermuda law computed on profits or
income or computed on any capital asset, gain or appreciation, or any tax in the
nature of estate duty or inheritance tax, provided that such exemption shall not
prevent the application of any such tax or duty to such persons as are
ordinarily resident in Bermuda and shall not prevent the application of any tax
payable in accordance with the provisions of the Land Tax Xxx 0000 or otherwise
payable in relation to land in Bermuda leased to the Company or Endurance
Bermuda. There are no Bermuda taxes, stamp or documentary taxes, duties or
similar charges now due, or which could in the future become due, in connection
with the execution, delivery, performance, filing, registration or enforcement
of the Subject Documents or the transactions contemplated thereby, or in
connection with the admissibility in evidence thereof and the Company is not
required by any Bermuda law or regulation to make any deductions or withholdings
in Bermuda from any payment it may make thereunder.
(t) In order to ensure the legality, validity, enforceability or
admissibility in evidence of the Prospectus or the Purchase Agreement and the
Certificate, it is not necessary that any document be filed, recorded or
enrolled with any Bermuda regulatory authority or that any stamp duties,
registration or similar tax or charge be paid in Bermuda.
(u) Charges over the assets of Bermuda companies (other than real
property in Bermuda or a ship or aircraft registered in Bermuda) wherever
situated, and charges on assets situated in Bermuda (other than real property in
Bermuda or a ship or aircraft registered in Bermuda) which are granted by or to
companies incorporated outside Bermuda, are capable of being registered in
Bermuda in the office of the Registrar of Companies pursuant to the provisions
of Part V of the Companies Xxx 0000 (the "Act"). Registration under the Act is
the only method of registration of charges over the assets of Bermuda companies
in Bermuda except charges over real property in Bermuda or ships or aircraft
registered in Bermuda. Registration under the Act is not compulsory and does not
affect the validity or enforceability of a charge and there is no time limit
within which registration of a charge must be effected. However, in the event
that questions of priority fall to be determined by reference to Bermuda law,
any charge registered pursuant to the Act will take priority over any other
charge which is registered subsequently in regard to the same assets, and over
all other charges created over such assets after 1 July, 1983, which are not
registered.
(v) Such counsel has searched the Registrar of Charges maintained by
the Registrar of Companies in Bermuda against the name of the Company and
Endurance Bermuda. This search has disclosed no charges over the shares or any
of the assets of the Company or Endurance Bermuda. Registration of charges is
not mandatory and charges may exist over the shares of the Company and Endurance
Bermuda without having been registered.
(w) The statements contained (A) in the Prospectus under the captions
referred to in Schedule I hereto, and (B) in the Registration Statement in Item
14, insofar as they purport to describe the
B-4
provisions of the Company's Constitutional Documents or the laws of Bermuda
referred to therein, are accurate and correct in all material respects.
(x) Under Bermuda law, the Underwriters will not be deemed to be
resident, domiciled, carrying on any commercial activity in Bermuda or subject
to any taxation in Bermuda by reason only of the entry into, performance or
enforcement of the Purchase Agreement and the Certificate to the extent they are
parties or the transactions contemplated thereby. It is not necessary under
Bermuda law that the Underwriters be authorised, licensed, qualified or
otherwise entitled to carry on business in Bermuda for their execution,
delivery, performance or enforcement of the Purchase Agreement and the
Certificate.
(y) The authorised, issued and outstanding share capital of the Company
is as set forth in the Prospectus in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus). Based solely
on the Registers of Shareholders and the Resolutions: (a) all of the issued
shares in the capital of each of the Company and Endurance Bermuda have been
duly and validly authorised and issued and are fully paid and non-assessable
(collectively, the "Outstanding Shares"); (b) all of the issued shares of
Endurance Bermuda are registered solely in the name of the Company; (c) none of
the Outstanding Shares were issued in violation of the pre-emptive or other
similar rights of any member of the Company or Endurance Bermuda. The authorised
share capital of the Company and the Securities conform as to legal matters to
the description thereof contained in the Prospectus.
(z) Each of the Employment Agreements, the Warrants and the Stock
Option Plan have been duly authorised, executed, issued or adopted (as the case
may be) and delivered by the Company (and, in the case of the Shareholders'
Agreement, Endurance Bermuda) and each constitutes the valid and binding
obligations of the Company or Endurance Bermuda, as applicable, enforceable
against the Company or Endurance Bermuda, as applicable, in accordance with
their respective terms.
(aa) Each of the Endurance Holdings Bye-Laws and the Endurance Bermuda
Bye-laws are valid, and binding and enforceable in accordance with their
respective terms. Under Section 16 of the Companies Xxx 0000 of Bermuda, each of
the Bye-Laws of the Company and Endurance Bermuda shall bind the Company and
Endurance Bermuda and each of their respective shareholders to the same extent
as if such Bye-Laws had been signed and sealed by the Company and Endurance
Bermuda, respectively, and each such shareholder as covenants on the part of
each party to observe all of the provisions thereof.
(bb) The consummation of the transactions contemplated by the Purchase
Agreement (including but not limited to any actions taken pursuant to the
indemnification and contribution provisions contained in the Purchase Agreement)
will not, subject to Section 39A(2A) of the Companies Xxx 0000, constitute
unlawful financial assistance by the Company under Bermuda law.
(cc) Registered holders of fully paid shares of the Company will bear
no personal liability for debts or obligations of the Company, under the laws of
Bermuda, as a result of their status as shareholders of the Company.
B-5
Schedule I to Bermuda Counsel's Opinion
(a) Risk Factors - Risks Relating to Our Business
(i) Our holding company structure and certain regulatory and other
constraints affect our ability to pay dividends and make other payments.
(ii) Our business could be adversely affected by Bermuda employment
restrictions.
(iii) The cost of reinsurance security arrangements may materially
impact our margins.
(iv) The regulatory system under which we operate, and potential
changes thereto, could have a material adverse effect on our business.
(b) Risk Factors - Risks Related to Ownership of Our Ordinary Shares
(i) There are provisions in our charter documents that may reduce or
increase the voting rights of our ordinary shares.
(ii) Provisions of Endurance Holdings' bye-laws may restrict the
ability to transfer shares of Endurance Holdings.
(iii) A shareholder may be required to sell its shares of Endurance
Holdings.
(iv) A shareholder may be required to indemnify us for any tax
liabilities that results from the acts of that shareholder.
(v) There are regulatory limitations on the ownership and transfer of
our ordinary shares
(vi) U.S. persons who own our ordinary shares may have more difficulty
in protecting their interests than U.S. persons who are shareholders of a U.S.
corporation.
(vii) Anti-takeover provisions in our bye-laws could impede an attempt
to replace or remove our directors, which could diminish the value of our
ordinary shares.
(viii) It may be difficult to enforce service of process and
enforcement of judgments against us and our officers and directors.
(c) Risks Related to Taxation -We may become subject to taxes in Bermuda
after March 28, 2016, which may have a material adverse effect on our financial
condition.
(d) Dividend Policy
(e) Management's Discussion and Analysis of Financial Condition and Results
of Operations - Liquidity
B-6
(f) Regulatory Matters - Bermuda
(g) Principal Shareholders - Second Paragraph of Footnote (1) to
Shareholder table
(h) Description of Share Capital
(i) Material Tax Considerations - Certain Bermuda Tax Considerations
(j) Enforceability of Civil Liabilities under United States Federal
Securities Laws and Other Matters.
X-0
Xxxxxxx X
XXXX XX XXXXXXX XX XXXXXXX'X XXXXXX XXXXXXX COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
(a) Endurance Holdings was duly incorporated under the Companies Xxx
0000 as a private limited company on 10 April 2002 and, in accordance with its
memorandum and articles of association, has the corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus.
(b) Endurance UK was duly incorporated under the Companies Xxx 0000 as
a private limited company on 10 April 2002 and, in accordance with its
memorandum and articles of association, has the corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus.
(c) All of the issued shares of Endurance UK have been validly issued
from the authorised share capital of Endurance UK and are fully paid for.
(d) All of the issued shares of Endurance Holdings have been validly
issued from the authorised share capital of Endurance Holdings and are fully
paid for.
(e) Endurance UK is duly authorised by the FSA to conduct its business
as described in the Prospectus.
(f) The information contained in the Prospectus under the heading
"Regulatory Matters - UK Regulation" insofar as such information constitutes a
summary of the legal matters, documents or proceedings governed by English law,
fairly presents the information with respect to such legal matters, documents or
proceedings and fairly summarises the matters referred to therein.
(g) The execution, delivery and performance of the Purchase Agreement
by the Company will not result in any violation of the provisions of the
memorandum and articles of association of Endurance Holdings and/or Endurance UK
or any applicable English laws or statutes or any rule of the United Kingdom's
Financial Services Authority.
C-1
Exhibit D
FORM OF LOCK-UP LETTER PURSUANT TO SECTION 3(k)
Lock-Up Agreement
__________, 2003
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
C/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
C/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
000 Xxxxx Xxxxxx
Xxxxx Tower -- 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Endurance Specialty Holdings Ltd. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Xxxxxxx, Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, X.X. Xxxxxx Securities Inc., Credit Suisse
First Boston Corporation and Deutsche Bank Securities Inc., as representatives
(the "Representatives"), propose to enter into a purchase agreement (the
"Purchase Agreement") on behalf of the several Underwriters named in Schedule I
to such agreement (collectively, the "Underwriters"), with Endurance Specialty
Holdings Ltd., a Bermuda domiciled holding company (the "Company"), providing
for a public offering (the "Public Offering") of ordinary shares, par value
$1.00 per share, of the Company (the "Ordinary Shares") pursuant to a
Registration Statement on Form S-1 filed with the Securities and Exchange
Commission (the "SEC") on December 20, 2002 and as may be amended from time to
time.
In consideration of the agreement by the Underwriters to offer and sell
the Ordinary Shares, and of other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the undersigned agrees that,
during the period beginning from the date of the final prospectus covering the
Public Offering of the Ordinary Shares and continuing to and including the date
180 days after the date of such prospectus, the undersigned will not, without
D-1
the prior written consent of Xxxxxxx, Xxxxx & Co. and Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, directly or indirectly, offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of any Ordinary Shares, or any options, rights or warrants to purchase
any Ordinary Shares, or any securities convertible into, exchangeable or
exercisable for or that represent the right to receive Ordinary Shares, whether
now owned or hereinafter acquired by the undersigned (including holding as a
custodian) or with respect to which the undersigned has or hereafter acquires
beneficial ownership within the rules and regulations of the SEC (collectively
the "Undersigned's Ordinary Shares"). The Company may, however, grant options to
purchase Ordinary Shares and issue Ordinary Shares upon the conversion of
outstanding class A shares, par value $1.00 per share, of the Company ("Class A
Shares"), the exercise of warrants for Ordinary Shares or Class A Shares, or the
exercise of outstanding options under the existing stock option plan (it being
understood that any Ordinary Shares so issued to the undersigned shall be also
subject to the terms and restrictions of this Lock-Up Agreement).
The foregoing restrictions are expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Ordinary Shares even if such Ordinary Shares
would be disposed of by someone other than the undersigned. Such prohibited
hedging or other transactions would include without limitation any short sale or
any purchase, sale or grant of any right (including without limitation any put
or call option) with respect to any of the Undersigned's Ordinary Shares or with
respect to any security that includes, relates to, or derives any significant
part of its value from such Ordinary Shares.
Notwithstanding the foregoing: (a) if the undersigned is a partnership,
the partnership may transfer any Ordinary Shares (or any securities convertible
into, exercisable for, or exchangeable for Ordinary Shares) to a partner of such
partnership; (b) if the undersigned is an individual, he or she may transfer
Ordinary Shares (or any securities convertible into, exercisable for, or
exchangeable for Ordinary Shares) by gift, will, or intestate succession to his
or her immediate family or to a trust the beneficiaries of which are exclusively
the undersigned and/or a member or members of his or her immediate family (for
purposes of this paragraph, "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the transferor); and (c) the
undersigned may transfer any Ordinary Shares (or any securities convertible
into, exercisable for, or exchangeable for Ordinary Shares) to an affiliate (as
such term is defined in Rule 144(a) of the regulations under the Securities Act
of 1933) of the undersigned; provided, however, that in any such case it shall
be a condition to the transfer that (i) each transferee execute an agreement
stating that the transferee is receiving and holding the Ordinary Shares (or any
securities convertible into, exercisable for, or exchangeable for Ordinary
Shares) subject to the provisions of this Lock-Up Agreement, and there shall be
no further transfer of such Ordinary Shares (or any securities convertible into,
exercisable for, or exchangeable for Ordinary Shares) except in accordance with
this Lock-Up Agreement, (ii) that each transferee certifies in writing to the
Representatives that such transferee is in compliance with the terms of this
Lock-Up Agreement as if such transferee had been bound by this Lock-Up Agreement
from the original date of this Lock-Up Agreement and (iii) no filing by any
party (transferee or transferor) under Section 16(a) of or Regulation 13D-G
under the Securities Exchange Act of 1934 shall be required or shall be made
voluntarily in connection with such transfer or distribution.
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The undersigned now has, and, except with respect to any of the
Undersigned Ordinary Shares transferred in accordance with the terms of this
Lock-Up Agreement, for the duration of this Lock-Up Agreement will have, good
and marketable title to the Undersigned's Ordinary Shares, free and clear of all
liens, encumbrances, and claims whatsoever. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the Undersigned's Ordinary Shares
except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
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Exact Name of Shareholder
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Authorized Signature
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Title
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