EXHIBIT 1.1
EXECUTION COPY
XL CAPITAL LTD
CLASS A ORDINARY SHARES
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UNDERWRITING AGREEMENT
December 6, 2005
Xxxxxxx, Xxxxx & Co.
Citigroup Global Markets Inc.
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XL Capital Ltd, a Cayman Islands exempted limited company (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 33,846,000 shares (the "Firm Securities") and, at the election of the
Underwriters on the terms described in Section 2 below, up to 5,076,900
additional shares (the "Optional Securities") of the Company's Class A Ordinary
Shares, par value $0.01 per share ("Stock") (the Firm Securities and the
Optional Securities that the Underwriters elect to purchase pursuant to Section
2 hereof being collectively called the "Securities"). Any references in this
Agreement to "you" relate to Xxxxxxx, Xxxxx & Co. and Citigroup Global Markets
Inc. as representatives of the several Underwriters named in Schedule I hereto.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) An "automatic shelf registration statement" as defined under
Rule 405 under the Securities Act of 1933, as amended (the "Act"), on Form
S-3 (File No. 333-130036) in respect of the Securities has been filed with
the Securities and Exchange Commission (the "Commission") not earlier than
three years prior to the date hereof; such registration statement, and any
post-effective amendment thereto, became effective on filing; and no stop
order suspending the effectiveness of such registration statement or any
part thereof has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission, and no notice of objection of
the Commission to the use of such registration statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act
has been received by the Company (the base prospectus filed as part of
such registration statement, in the form in which it has most
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recently been filed with the Commission on or prior to the date of this
Agreement, is hereinafter called the "Basic Prospectus"; any preliminary
prospectus (including any preliminary prospectus supplement) relating to
the Securities filed with the Commission pursuant to Rule 424(b) under the
Act is hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statement, including all exhibits thereto but excluding
Form T-1 and including any prospectus supplement relating to the
Securities that is filed with the Commission and deemed by virtue of Rule
430B to be part of such registration statement, each as amended at the
time such part of the registration statement became effective, are
hereinafter collectively called the "Registration Statement"; the Basic
Prospectus, as amended and supplemented immediately prior to the
Applicable Time (as defined in Section 1(c) hereof), is hereinafter called
the "Pricing Prospectus"; the form of the final prospectus relating to the
Securities filed with the Commission pursuant to Rule 424(b) under the Act
in accordance with Section 5(a) hereof is hereinafter called the
"Prospectus"; any reference herein to the Basic Prospectus, the Pricing
Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of the
respective prospectus; any reference to any amendment or supplement to the
Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any post-effective amendment to the
Registration Statement, any prospectus supplement relating to the
Securities filed with the Commission pursuant to Rule 424(b) under the Act
and any documents filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference therein, in
each case after the date of the Basic Prospectus, such Preliminary
Prospectus, or the Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement;
and any "issuer free writing prospectus" as defined in Rule 433 under the
Act relating to the Securities is hereinafter called an "Issuer Free
Writing Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder, and did 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, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein;
(c) For the purposes of this Agreement, the "Applicable Time" is
6:00 pm (Eastern time) on the date of this Agreement; the Pricing
Prospectus as supplemented by the final term sheet prepared and filed
pursuant to Section 5(a) hereof, taken together (collectively, the
"Pricing Disclosure Package") as of the Applicable Time, did not include
any untrue statement of a material fact or omit to
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state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and each Issuer Free Writing Prospectus listed on Schedule
II(a) hereto does not conflict with the information contained in the
Registration Statement, the Pricing Prospectus or the Prospectus and each
such Issuer Free Writing Prospectus, as supplemented by and taken together
with the Pricing Disclosure Package as of the Applicable Time, did not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to statements or omissions made in an Issuer Free Writing Prospectus in
reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for
use therein;
(d) The documents incorporated by reference in the Pricing
Prospectus and the Prospectus, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder 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 no
such documents were filed with the Commission since the Commission's close
of business on the business day immediately prior to the date of this
Agreement and prior to the execution of this Agreement, except as set
forth on Schedule II(b) hereto;
(e) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus will conform, in all material respects to the requirements
of the Act and the rules and regulations of the Commission thereunder and
do not and will not, as of the applicable effective date as to each part
of the Registration Statement and as of the applicable filing date as to
the Prospectus and any amendment or supplement thereto, 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 in the Registration
Statement not misleading and the statements in the Prospectus in the light
of the circumstances under which they were made not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein;
(f) Neither the Company nor any of its Significant Subsidiaries
(as defined below) has sustained since the date of the latest audited
financial statements included or incorporated by reference in the Pricing
Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity,
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whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Pricing Prospectus, which loss or interference would
have a Material Adverse Effect (as defined below), or would reasonably be
expected to have a prospective Material Adverse Effect; and, since the
respective dates as of which information is given in the Registration
Statement and the Pricing Prospectus, there has not been any change in the
capital stock (other than changes resulting from the exercise of stock
options or the conversions of warrants or capital stock which were
outstanding as of such date, or from the exercise of options granted after
such date in the ordinary course of business or from repurchases of
capital stock) or long-term debt of the Company or any of its Significant
Subsidiaries or any material adverse change, or any development that would
reasonably be expected to involve a prospective material adverse change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
Significant Subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Pricing Prospectus;
(g) The Company has been duly incorporated and is validly existing
as an exempted limited company in good standing under the laws of the
Cayman Islands, with full power and authority to own its properties and
conduct its business as described in the Pricing Prospectus and has been
duly qualified as a foreign company for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, except where such failure to be so qualified in any such
jurisdiction or to have any such power or authority would not have a
material adverse effect on the current or future condition (financial or
other), business, properties or results of operations of the Company and
its Subsidiaries taken as a whole or the transactions contemplated by this
Agreement (a "Material Adverse Effect"); and each Significant Subsidiary
of the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
(h) The Company had, on September 30, 2005, an authorized
capitalization as set forth in the Pricing Prospectus under the caption
"Actual" under the heading "Capitalization", and all of the issued shares
of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and conform to the
description of the Stock contained in the Pricing Disclosure Package and
the Prospectus;
(i) The Securities have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable and will conform
to the description of the Securities contained in the Pricing Disclosure
Package and the Prospectus; the stockholders of the Company have no
preemptive or similar rights with respect to the Securities and no
shareholder consents are required in connection with the Company's
issuance and sale of the Securities;
(j) This Agreement has been duly authorized, executed and
delivered by the Company;
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(k) The Stock is listed on the New York Stock Exchange (the
"Exchange");
(l) The issue and sale of the Securities, the execution and
delivery of this Agreement and the compliance by the Company with all of
the provisions of this Agreement and the consummation of the transactions
contemplated herein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its Significant
Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Significant Subsidiaries is subject, nor will such
action result in any violation of the provisions of the Articles of
Association or the Memorandum of Association (or similar organizational
documents) of the Company or any of its Significant Subsidiaries or any
statute or any order, rule or regulation of any court or governmental
agency or body (a "Governmental Agency") having jurisdiction over the
Company or any of its Significant Subsidiaries or any of its respective
properties except in each case (other than with respect to such Articles
of Association or Memorandum of Association (or similar organizational
documents)) for such conflicts, violations, breaches or defaults which
would not result in a Material Adverse Effect;
(m) No consent, approval, authorization, order, filing,
registration or qualification of or with any Governmental Agency (a
"Governmental Authorization") is required for the issue and sale by the
Company of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, except such as have been, or
will have been prior to the first Time of Delivery, obtained under the Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by the
Underwriters;
(n) All of the issued share capital of each Significant Subsidiary
of the Company which is a corporation has been duly and validly authorized
and issued, is fully paid and non-assessable and (except for (i) a 15%
ownership interest in XL Financial Assurance Ltd. owned by a third party
and (ii) directors' qualifying shares) is owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or claims
(for purposes of this Agreement, "Subsidiary" means, as applied to any
person, any corporation, limited or general partnership, trust,
association or other business entity of which an aggregate of greater than
50% of the outstanding Voting Shares of such person is, at any time,
directly or indirectly, owned by such person and/or one or more
subsidiaries of such person and "Significant Subsidiary" shall have the
meaning of "significant subsidiary" as set forth in Regulation S-X under
the Act; for purposes of the definition of " Subsidiary," "Voting Shares"
means, with respect to any corporation, the capital stock having the
general voting power under ordinary circumstances to elect at least a
majority of the board of directors (irrespective of whether or not at the
time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency));
(o) Prior to the date hereof, neither the Company nor, to the
Company's knowledge, any of its affiliates has taken any action which is
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designed to or which has constituted or which might have been expected to
cause or result in stabilization or manipulation of the price of any
security of the Company in connection with the offering of the Securities
in violation of the Exchange Act;
(p) Other than as set forth or incorporated by reference in the
Pricing Prospectus prior to the date hereof, or as encountered in the
ordinary course of business in the Company's claims activities, there are
no legal or governmental actions, suits or proceedings pending to which
the Company or any of its Significant Subsidiaries is a party or of which
any property of the Company or any of its Significant Subsidiaries is the
subject, which would individually or in the aggregate reasonably be
expected to have a Material Adverse Effect on the operations of the
Company and its Significant Subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(q) The financial statements of the Company and its consolidated
Subsidiaries incorporated by reference in the Pricing Prospectus and the
Prospectus present fairly the financial position of the Company and its
consolidated Subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and except as otherwise
disclosed in the Pricing Prospectus, such financial statements have been
prepared in conformity with generally accepted accounting principles in
the United States applied on a consistent basis;
(r) The Company and its Significant Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any written notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect;
(s) Neither the Company nor any of its Significant Subsidiaries is
in violation of its Articles of Association or Memorandum of Association
(or similar organizational documents) or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, except for such defaults which would
not result in a Material Adverse Effect;
(t) The statements set forth in the Pricing Prospectus and the
Prospectus under the captions "Description of XL Capital Ordinary Shares"
insofar as they purport to constitute a summary of the terms of the Stock
and the other transaction documents described therein, and the statements
set forth under the caption "Certain Tax Consequences" in the Pricing
Prospectus and the Prospectus, insofar as they purport to describe the
provisions of the laws referred to therein, are accurate, complete and
fair in all material respects;
(u) The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
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(v) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its Subsidiaries, and have audited
the Company's internal control over financial reporting and management's
assessment thereof, are an independent registered public accounting firm
as required by the Act and the rules and regulations of the Commission
thereunder;
(w) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters to the Cayman Islands or any political
subdivision or taxing authority thereof or therein in connection with (A)
the issuance, sale and delivery by the Company to or for the respective
accounts of the Underwriters of the Securities or (B) the sale or delivery
outside the Cayman Islands by the Underwriters of the Securities to the
initial purchasers thereof, other than as described in the opinion of
Xxxxxxx Xxxxxxxx Xxxxxx delivered pursuant to Section 8(d) of this
Agreement;
(x) (A) (i) At the time of filing the Registration Statement, (ii)
at the time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13
or 15(d) of the Exchange Act or form of prospectus), and (iii) at the time
the Company or any person acting on its behalf (within the meaning, for
this clause only, of Rule 163(c) under the Act) made any offer relating to
the Securities in reliance on the exemption of Rule 163 under the Act, the
Company was a "well-known seasoned issuer" as defined in Rule 405 under
the Act; and (B) at the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) under the Act) of the
Securities, the Company was not an "ineligible issuer" as defined in Rule
405 under the Act;
(y) The Company and its Subsidiaries maintain a system of
"internal control over financial reporting" (as such term is defined in
Rule 13a-15(f) under the Exchange Act). The Company's and its
Subsidiaries' internal control over financial reporting is effective and
the Company and its Subsidiaries are not aware of any material weaknesses
in its internal control over financial reporting;
(z) The Company and its Subsidiaries maintain "disclosure controls
and procedures" (as such term is defined in Rule 13a-15(e) under the
Exchange Act); such disclosure controls and procedures are effective;
(aa) The Registration Statement, the Prospectus, the Pricing
Disclosure Package, any Preliminary Prospectus and any other materials
prepared by or with the consent of the Company for distribution to the
Participants in connection with the Directed Share Program comply, and any
further amendments or supplements thereto will comply, with any applicable
laws or regulations of foreign jurisdictions in which the Prospectus, the
Pricing Disclosure Package, any Preliminary Prospectus, as amended or
supplemented, if applicable, and any other materials prepared by or with
the consent of the Company for distribution to the Participants in
connection with the Directed Share Program are distributed in connection
with the Directed Share Program, and no authorization, approval, consent,
license, order, registration or qualification of or
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with any government, governmental instrumentality or court, other than
such as have been obtained, is necessary under the securities laws and
regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States. The Company has not offered, or caused
the Underwriters to offer, Securities to any person pursuant to the
Directed Share Program with the specific intent to unlawfully influence
(i) a customer or supplier of the Company to alter the customer's or
supplier's level or type of business with the Company, or (ii) a trade
journalist or publication to write or publish favorable information about
the Company or its products; and
(bb) Except for the materials attached hereto in Annex I, the
Company has not provided or consented to the distribution of any written
materials to the Participants in connection with the Directed Share
Program. The Company will not issue any such materials to the Participants
without the prior written consent of Xxxxxxx, Sachs & Co. and Citigroup
Global Markets Inc.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $63.05, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Securities as provided below, the Company agrees to issue and sell to
each of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional
Securities as to which such election shall have been exercised (to be adjusted
by you so as to eliminate fractional shares) determined by multiplying such
number of Optional Securities by a fraction, the numerator of which is the
maximum number of Optional Securities which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Securities that
all of the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase
at their election up to 5,076,900 Optional Securities, at the purchase price per
share set forth in the paragraph above, for the sole purpose of covering sales
of shares in excess of the number of Firm Securities, provided that the purchase
price per Optional Share shall be reduced by an amount per share equal to any
dividends or distributions, if any, declared by the Company and payable on the
Firm Securities but not payable on the Optional Securities. Any such election to
purchase Optional Securities may be exercised only by written notice from
Xxxxxxx, Xxxxx & Co. to the Company, given within a period of 30 calendar days
after the date of this Agreement, setting forth the aggregate number of Optional
Securities to be purchased and the date on which such Optional Securities are to
be delivered, as determined by Xxxxxxx, Sachs & Co. but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless you and
the Company otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
As part of the offering contemplated by this Agreement, the
Underwriters have agreed to reserve out of the Securities set forth opposite
your name on Schedule I to this Agreement, up to $2,000,000 of shares of Stock,
for sale to the Company's officers, and directors (collectively,
"Participants"), as set forth in the Prospectus under
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the heading "Underwriting" (the "Directed Share Program"). The Securities to be
sold by the Underwriters pursuant to the Directed Share Program (the "Directed
Shares") will be sold by the Underwriters pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for purchase by
any Participants by 7:30 a.m. New York City time on the business day following
the date on which this Agreement is executed will be offered to the public by
the Underwriters as set forth in the Prospectus.
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with The Depository
Trust Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company to Xxxxxxx, Sachs & Co. at least twenty-four hours in advance, by
causing DTC to credit the Securities to the account of Xxxxxxx, Xxxxx & Co. at
DTC. The Company will, upon request by Xxxxxxx, Sachs & Co., cause the
certificates representing the Securities to be made available to Xxxxxxx, Xxxxx
& Co. for checking at least twenty-four hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City
time, on December 9, 2005 or such other time and date as Xxxxxxx, Sachs & Co.
and the Company may agree upon in writing, and, with respect to the Optional
Securities, 9:30 a.m., New York City time, on the date specified by Xxxxxxx,
Xxxxx & Co. in the written notice given by Xxxxxxx, Sachs & Co. of the
Underwriters' election to purchase such Optional Securities, or such other time
and date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing. Such
time and date for delivery of the Firm Securities is herein called the "First
Time of Delivery", such time and date for delivery of the Optional Securities,
if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of Delivery by or
on behalf of the parties hereto pursuant to Section 8 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 8(n) hereof, will be delivered at the offices
of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be held at the
Closing Location at 4:30 p.m., New York City time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this
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Agreement; to make no further amendment or any supplement to the Registration
Statement, the Basic Prospectus or the Prospectus prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any amendment or supplement to the Prospectus has been filed and to
furnish you with copies thereof; to prepare a final term sheet containing a
description of the Securities, in a form approved by you and to file such term
sheet pursuant to Rule 433(d) under the Act within the time required by such
Rule; to file promptly all other material required to be filed by the Company
with the Commission pursuant to Rule 433(d) under the Act; to file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus (or in lieu thereof, the notice referred to
in Rule 173(a) under the Act) is required in connection with the offering or
sale of the Securities; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission prior to the completion of the
distribution of the Securities contemplated by this Agreement (the date of which
shall be confirmed to the Company by you) of any stop order or of any order
preventing or suspending the use of any preliminary prospectus or other
prospectus in respect of the Securities, of any notice of objection of the
Commission to the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Act, of the suspension of
the qualification of the Securities for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission prior to the completion of the distribution of the
Securities contemplated by this Agreement for the amending or supplementing of
the Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any preliminary prospectus or other prospectus or
suspending any such qualification, to promptly use its best efforts to obtain
the withdrawal of such order; and in the event of the issuance of any such
notice of objection, promptly to amend the Registration Statement in such manner
as may be required to permit offers and sales of the Securities;
(b) If required by Rule 430B(h) under the Act in connection with
the offering of the Securities contemplated by this Agreement, to prepare a form
of prospectus in a form approved by you and to file such form of prospectus
pursuant to Rule 424(b) under the Act not later than may be required by Rule
424(b) under the Act; and to make no further amendment or supplement to such
form of prospectus which shall be disapproved by you promptly after reasonable
notice thereof;
(c) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may reasonably request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(d) If by the third anniversary (the "Renewal Deadline") of the
initial effective date of the Registration Statement, any of the Securities
remain unsold by the Underwriters, the Company will file, if it has not already
done so and is eligible to do so, a new automatic shelf registration statement
relating to the Securities, in a form
-10-
satisfactory to you. If at the Renewal Deadline the Company is no longer
eligible to file an automatic shelf registration statement and the distribution
of the Securities contemplated by this Agreement has not yet been completed, the
Company will, if it has not already done so, file a new shelf registration
statement relating to the Securities, in a form satisfactory to you and will use
its best efforts to cause such registration statement to be declared effective
within 180 days after the Renewal Deadline. The Company will take all other
action necessary or appropriate to permit the public offering and sale of the
Securities to continue as contemplated in the expired registration statement
relating to the Securities. References herein to the Registration Statement
shall include such new automatic shelf registration statement or such new shelf
registration statement, as the case may be.
(e) Prior to 3:00 p.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with written and electronic copies of the Prospectus
in New York City in such quantities as you may reasonably request, and, if the
delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the offering
or sale of the Securities and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act or
the Exchange Act, to notify you and upon your request to file such document and
to prepare and furnish without charge to each Underwriter and to any dealer in
securities as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance; and in
case any Underwriter is required to deliver a prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) under the Act) in connection with sales of
any of the Securities at any time nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many written and electronic copies as
you may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act; you will inform the Company when the Underwriters'
obligation to deliver a prospectus has expired.
(f) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its Subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(g) During the period beginning from the date hereof and
continuing to and including the date 60 days after the date of the Prospectus,
not to offer, sell, contract to sell, pledge, hedge, grant any option to
purchase, make any short sale or otherwise dispose, except as provided
hereunder, of any Stock or any securities of the Company that are substantially
similar to the Securities, including, but not limited to, any options or
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warrants to purchase shares of Stock or any securities that are convertible into
or exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than (i) pursuant to employee stock
option plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement and (ii)
the dividend reinvestment and stock purchase plan that the Company expects to
establish), without your prior written consent;
(h) To pay the required Commission filing fees relating to the
Securities within the time required by Rule 456(b)(1) under the Act without
regard to the proviso therein and otherwise in accordance with Rules 456(b) and
457(r) under the Act;
(i) To use its best efforts to list, subject to notice of
issuance, the Securities on the Exchange;
(j) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Pricing
Prospectus and Prospectus under the caption "Use of Proceeds";
(k) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's corporate
logo for use on the website, if any, operated by such Underwriter for the
purpose of facilitating the on-line offering of the Securities (the "License");
PROVIDED, HOWEVER, that the License shall be used solely for the purpose
described above, is granted without any fee and may not be assigned or
transferred; and
(l) To comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
6.
(a) (i) The Company represents and agrees that, other than the
final term sheet prepared and filed pursuant to Section 5(a) hereof, without the
prior consent of Xxxxxxx, Xxxxx & Co. and Citigroup Global Markets Inc., it has
not made and will not make any offer relating to the Securities that would
constitute a "free writing prospectus" as defined in Rule 405 under the Act;
(ii) each Underwriter represents and agrees that, other than one or more term
sheets relating to the Securities containing customary information and conveyed
to the purchasers of the Units, without the prior consent of the Company,
Xxxxxxx, Sachs & Co. and Citigroup Global Markets Inc. (as to both form and
content), it has not made and will not make any offer relating to the Securities
that would constitute a free writing prospectus; (iii) any such free writing
prospectus, the use and content of which have been consented to by the Company
and Xxxxxxx, Xxxxx & Co. and Citigroup Global Markets Inc. (including the final
term sheet prepared and filed pursuant to Section 5(a) hereof) is listed on
Schedule II (a) hereto;
(b) The Company has complied and will comply with the requirements
of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission or retention where required and
legending; and
(c) The Company agrees that if at any time following issuance of
an Issuer Free Writing Prospectus any event occurred or occurs as a result of
which such Issuer Free Writing Prospectus would conflict with the information in
the Registration
-12-
Statement, the Pricing Prospectus or the Prospectus or would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances then
prevailing, not misleading, the Company will give prompt notice thereof to
Xxxxxxx, Sachs & Co. and Citigroup Global Markets Inc. and, if requested by
Xxxxxxx, Xxxxx & Co. or Citigroup Global Markets Inc., will prepare and furnish
without charge to each Underwriter an Issuer Free Writing Prospectus or other
document which will correct such conflict, statement or omission; provided,
however, that this covenant shall not apply to any statements or omissions in an
Issuer Free Writing Prospectus made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein.
7. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and the
issuance and sale of the Securities and all other expenses in connection with
the preparation, printing and filing of the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus and
the Prospectus and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the Blue
Sky and Legal Investment Memoranda and closing documents (including any
compilations thereof); (iii) all expenses in connection with the qualification
of the Securities for offering and sale under state securities laws as provided
in Section 5(c) hereof, including the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any filing fees
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, any required reviews by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (v) the cost of
preparing the Securities; (vi) the fees and expenses of any transfer agent or
registrar or dividend disbursing agent; (vii) all expenses and taxes arising as
a result of the issuance, sale and delivery of the Securities, of the sale and
delivery outside of the Cayman Islands of the Securities by the Underwriters to
the initial purchasers thereof in the manner contemplated under this Agreement,
including, in any such case, any Cayman Islands income, capital gains,
withholding, transfer or other tax asserted against an Underwriter by reason of
the purchase and sale of the Securities pursuant to this Agreement; (viii) any
cost incurred in connection with listing the Securities on the Exchange; and
(ix) all other costs and expenses incident to the performance of the Company's
obligations hereunder which are not otherwise specifically provided for in this
Section; provided, however, that , upon the First Time of Delivery, the
Underwriters shall reimburse the Company for up to $1.25 million of the
Company's expenses in respect of the foregoing. It is understood, however, that,
except as provided in this Section, and Sections 9, 12 and 24 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Securities
to be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company
-13-
shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act within the applicable time period
prescribed for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; the final term sheet contemplated by
Section 5(a) hereof, and any other material required to be filed by the Company
pursuant to Rule 433(d) under the Act shall have been filed with the Commission
within the applicable time periods prescribed for such filings by Rule 433; no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission and no notice of objection
of the Commission to the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Act shall have been
received; no stop order suspending or preventing the use of the Prospectus or
any Issuer Free Writing Prospectus shall have been initiated or threatened by
the Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(b) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
shall have furnished to you their written opinion or opinions and letter, dated
such Time of Delivery, in form and substance reasonably satisfactory to you, in
the form attached hereto in Annex II-1 and Annex II-2, respectively, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxx Xxxxxx & Xxxxxxx LLP, United States counsel for the
Company, shall have furnished to you their written opinion or opinions and
letter, dated such Time of Delivery, in form and substance reasonably
satisfactory to you, in the form attached hereto in Annex III-1 and Annex III-2,
respectively;
(d) Xxxxxxx Xxxxxxxx Xxxxxx, Cayman Islands counsel for the
Company, shall have furnished to you their written opinion or opinions, dated
such Time of Delivery, in form and substance reasonably satisfactory to you, in
the form attached hereto in Annex IV;
(e) Xxxxxxx X. Xxxx, Executive Vice President and General Counsel
to the Company, shall have furnished to you his written opinion or opinions,
dated such Time of Delivery, in form and substance reasonably satisfactory to
you, in the form attached hereto in Annex V;
(f) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent to
the date of this Agreement but prior to the last Time of Delivery and also at
each Time of Delivery, PricewaterhouseCoopers LLP, the independent registered
public accounting firm of the Company, who have certified the financial
statements of the Company and its Subsidiaries and have audited the Company's
internal control over financial reporting and management's assessment thereof
included or incorporated by reference in the Registration Statement, shall have
furnished to you a "comfort" letter or letters, dated the respective dates of
delivery thereof, in form and substance reasonably satisfactory to you;
-14-
(g) (i) Neither the Company nor any of its Significant
Subsidiaries shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Pricing Prospectus any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Pricing Prospectus, and (ii) since the respective dates as
of which information is given in the Pricing Prospectus, there shall not have
been any change in the capital stock (other than changes resulting from the
exercise of options or the conversion of warrants or capital stock which were
outstanding as of such date, or from the exercise of options granted after such
date in the ordinary course of business or from repurchases of capital stock) or
long-term debt of the Company or any of its Significant Subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its Significant Subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Pricing Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in your
judgment so material and adverse as to make it impractical or inadvisable to
proceed with the public offering or the delivery of the Securities on the terms
and in the manner contemplated in the Prospectus;
(h) On or after the Applicable Time (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or the Company's
financial strength or claims paying ability by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) other than any announcements
made prior to the date of this Agreement, no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or the
Company's financial strength or claims paying ability;
(i) On or after the date of the Applicable Time there shall not
have occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the Exchange; (iii) a
general moratorium on commercial banking activities in New York, the Cayman
Islands or Bermuda declared by the relevant authority or a material disruption
in commercial banking or securities settlement or clearance services in the
United States or any other relevant jurisdiction; (iv) the outbreak or
escalation of hostilities involving the United States, the Cayman Islands or
Bermuda or the declaration by the United States, the Cayman Islands or Bermuda
of a national emergency or war, if the effect of any such event specified in
this clause (iv) in your judgment is so material and adverse as to make it
impractical or inadvisable to proceed with the public offering or the delivery
of the Securities being delivered at such Time of Delivery on the terms and in
the manner contemplated in the Prospectus; (v) a change or development involving
a prospective change in the Cayman Islands or Bermuda taxation affecting the
Company, the Securities or the transfer thereof or the imposition of exchange
controls by the United States, Bermuda or the Cayman Islands; or (vi) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or currency exchange rates or
controls in the United States, the Cayman Islands, Bermuda or elsewhere, if the
effect of any such event specified in this clause (vi) in your judgment is so
material and adverse as to make it impractical or inadvisable to proceed with
the public offering or the delivery of the Securities being delivered at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus;
-15-
(j) The Securities shall have been duly listed, subject to notice
of issuance, on the Exchange;
(k) The Company shall have complied with the provisions of Section
5(e) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement;
(l) You shall have received letters, dated the date of this
Agreement, from the Chairman of the Board and the Chief Executive Officer of the
Company whereby each such person agrees, for the period commencing on the date
of the date of this Agreement and ending 60 days after the date of this
Agreement, not to offer, sell, contract to sell, pledge, hedge, grant any option
to purchase, make any short sale or otherwise dispose of any Stock or any
securities of the Company that are substantially similar to the Securities,
including but not limited to any options or warrants to purchase shares of Stock
or any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities, or publicly announce any intention to do so (other than (i) pursuant
to Rule 10b5-1 programs, if any, for such person existing on the date of the
Prospectus, (ii) (so long as such person does not thereby transfer any of such
person's Stock to any third person) in connection with the entry by such person
into arrangements with the Company intended solely to provide for the extension,
renewal or reloading of options to purchase Stock or the issuance of new options
to purchase Stock to such person, (iii) at any time after the date on which such
person ceases to be a director or officer of the Company, (iv) in an amount not
greater than 10% of the number of shares of Stock owned by such person on the
date of this Agreement), (v) as a bona fide gift or gifts, provided that the
donee or donees thereof agree to be bound in writing by the restrictions set
forth in this subsection (l), or as charitable donations, (vi) to any trust for
the direct or indirect benefit of such person or the immediate family of such
person, provided that the trustee of the trust agrees to be bound in writing by
the restrictions set forth in this subsection (l), and provided further that any
such transfer shall not involve a disposition for value, and (vii) for bona fide
tax planning purposes, without your prior written consent;
(m) The Company shall have furnished or caused to be furnished to
you at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a), (g) and
(h) of this Section and as to such other matters as you may reasonably request;
and
(n) Prior to each Time of Delivery, the Company shall have
furnished to you such further information, certificates and documents as you may
reasonably request.
9. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus, the Pricing Prospectus, the Prospectus, or any amendment
or supplement thereto, any Issuer Free Writing Prospectus or any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Act, or arise out of or are based upon the omission or alleged
-16-
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 expenses of one counsel (in addition to any local
counsel) engaged reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Basic Prospectus, the
Pricing Prospectus, any Preliminary Prospectus, the Prospectus, or any amendment
or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) 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 the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus, the Pricing Prospectus, the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, 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 the Registration Statement, the Basic Prospectus, any Preliminary Prospectus,
the Pricing Prospectus, the Prospectus or any such amendment or supplement
thereto, or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Xxxxxxx, Sachs & Co. 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, including the reasonable fees and expenses of one counsel
(in addition to any applicable local counsel).
(c) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims damages or liabilities (or actions in respect
thereof) (i) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any of the materials prepared
by or with the consent of the Company for distribution to the Participants in
connection with the Directed Share Program, the prospectus wrapper material
prepared by or with the consent of the Company for distribution in foreign
jurisdictions in connection with the Directed Share Program attached to the
Prospectus or any Preliminary Prospectus, 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, when considered in
conjunction with the Prospectus or any applicable Preliminary Prospectus, not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of the securities that were, immediately following the date of this
Agreement, subject to a properly confirmed agreement to purchase; or (iii)
related to or arising out of, or in connection with, the Directed Share Program,
and in each case, will reimburse each Underwriter for any legal expenses of
-17-
one counsel (in addition to local counsel), which shall be the same counsel
engaged pursuant to subsection (a) above (unless such counsel advises the
Underwriters that it cannot act as counsel in connection with both this
subsection (c) and subsection (a)) if any such counsel is engaged pursuant to
subsection (a) above (but which otherwise may be separate counsel), 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 to the extent that any such loss, claim, damage or
liability, in the case of clause (i) arises out of or is based upon an untrue
statement or an alleged untrue statement or omission or alleged omission made in
such material in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein and, in the case of clause (iii), is finally
judicially determined to have resulted primarily from the gross negligence or
willful misconduct of the Underwriters.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) 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. 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 (except as set forth below).
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action, or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. 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
(1) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (2) does not include a
statement
-18-
as to or an admission of fault, culpability or a failure to act, by or on behalf
of any indemnified party.
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, 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
subsection (d) 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 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 contribution pursuant to this subsection (e) 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 subsection (e). 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
subsection (e) 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 subsection (e),
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. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company under this Section 9 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 within the meaning of the Act; and the obligations of the
Underwriters under this Section 9 shall be in addition to any liability which
the respective Underwriters may otherwise have and
-19-
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.
10. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties
satisfactory to the Company to purchase such Securities on the terms contained
herein. If within thirty-six hours after such default by any Underwriter you do
not arrange for the purchase of such Securities, then the Company shall be
entitled to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to you to purchase such Securities on such
terms. In the event that, within the respective prescribed periods, you notify
the Company that you have so arranged for the purchase of such Securities, or
the Company notifies you that it has so arranged for the purchase of such
Securities, you or the Company shall have the right to postpone such Time of
Delivery for a period of not more than seven days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees to
file promptly any amendments or supplements to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased does not exceed one eleventh of the
aggregate number of all the Securities to be purchased at such Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Firm or Optional Securities which such Underwriter agreed to purchase
hereunder) of the Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased exceeds one eleventh of the aggregate
number of all the Securities to be purchased at such Time of Delivery, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Securities of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Company to sell the Optional Securities) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 7 hereof and the indemnity and contribution agreements in Section 9
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this
-20-
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
12. If this Agreement shall be terminated pursuant to Section 10 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 7, 9 and 24 hereof; but, if for any other reason, any
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out of pocket
expenses approved in writing by you, including reasonable fees and disbursements
of counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Securities not so delivered, but the
Company shall then be under no further liability to any Underwriter except as
provided in Sections 7, 9 and 24 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 9(e) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 9 and 11 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
15. The Company 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 the federal district court
for the Southern District of New York and the New York County 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 courts in any such suit,
action or proceeding. The Company has appointed CT Corporation System, New York,
New York, as its authorized agent (the "Authorized Agent") upon whom process may
be served in any such action arising out of or based on this Agreement or the
transactions contemplated hereby which may be instituted in the
-00-
xxxxxxx xxxxxxxx xxxxx for the Southern District of New York and the New York
County Court by any Underwriter or by any person who controls any Underwriter,
expressly consents to the jurisdiction of any such court in respect of any such
action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable. The
Company represents and warrants that the Authorized Agent has agreed to act as
such 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 as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.
16. Time shall be of the essence in this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business. "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
17. The Company acknowledges and agrees that (i) the purchase and sale
of the Securities pursuant to this Agreement is an arm's-length commercial
transaction between the Company, on the one hand, and the several Underwriters,
on the other, (ii) in connection therewith and with the process leading to such
transaction each Underwriter is acting solely as a principal and not as the
agent or fiduciary of the Company, (iii) no Underwriter has assumed an advisory
or fiduciary responsibility in favor of the Company with respect to the offering
contemplated hereby or (except with respect to advisory responsibility, as
provided in the letter dated November 14, 2005 from the Xxxxxxx, Sachs & Co. to
the Company and the letter dated November 17, 2005 from Citigroup Global Markets
Inc. to the Company) the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company on other matters)
or any other obligation to the Company except the obligations expressly set
forth in this Agreement and (iv) the Company has consulted its own legal and
financial advisors to the extent it deemed appropriate. The Company agrees that
it will not claim that the Underwriters, or any of them, has rendered advisory
services of any nature or respect, or owes a fiduciary or similar duty to the
Company, in connection with such transaction or (except with respect to advisory
services, as provided in the letter dated November 14, 2005 from Xxxxxxx, Xxxxx
& Co. to the Company and the letter dated November 17, 2005 from Citigroup
Global Markets Inc. to the Company) the process leading thereto.
18. For the avoidance of doubt and anything in this Agreement to the
contrary notwithstanding, all references in this Agreement to the Pricing
Disclosure Package as of the Applicable Time shall be deemed to include the
final term sheet relating to the Shares dated December 6, 2005 and filed with
the Commission on December 7, 2005.
19. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of
them, with respect to the subject matter hereof; provided that the letter dated
December 2, 2005 shall remain in full force and effect.
20. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
-22-
21. The Company and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
22. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
23. Notwithstanding anything herein to the contrary, the Company is
authorized to disclose to any persons the U.S. federal and state income tax
treatment and tax structure of the potential transaction and all materials of
any kind (including tax opinions and other tax analyses) provided to the Company
relating to that treatment and structure, without the Underwriters' imposing any
limitation of any kind. However, any information relating to the tax treatment
and tax structure shall remain confidential (and the foregoing sentence shall
not apply) to the extent necessary to enable any person to comply with
securities laws. For this purpose, "tax structure" is limited to any facts that
may be relevant to that treatment.
24. In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any variation
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of judgment currency actually received by such
Underwriter. The foregoing indemnity shall constitute a separate and independent
obligation of the Company and shall continue in full force and effect
notwithstanding any such judgment or order aforesaid. The term "rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of or conversion into United States dollars.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
-23-
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of you plus one for each counsel
counterparts hereof, and upon the acceptance hereof by you, on behalf of each of
the Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Underwriters and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
XL Capital Ltd
By: /s/ Xxxxxxx Xxxxxx Xxxxx
------------------------
Name: Xxxxxxx Xxxxxx Xxxxx
Title: Senior Vice President and Chief
Corporate Legal Officer
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
By: /s/ Xxxxxxx, Xxxxx & Co.
-------------------------------------
(Xxxxxxx, Sachs & Co.)
Citigroup Global Markets Inc.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
On behalf of each of the Underwriters
-24-
SCHEDULE I
NUMBER OF OPTIONAL
SECURITIES TO BE
TOTAL NUMBER OF FIRM PURCHASED IF
SECURITIES TO BE MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- -------------------- ------------------
Xxxxxxx, Xxxxx & Co..................... 10,153,800 1,523,075
Citigroup Global Markets Inc............ 6,769,200 1,015,385
X.X. Xxxxxx Securities Inc.............. 2,115,376 317,306
Xxxxxx Brothers Inc..................... 2,115,376 317,306
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated.... 2,115,376 317,306
Wachovia Capital Markets, LLC........... 2,115,376 317,306
ABN AMRO Rothschild LLC................. 609,228 91,384
Banc of America Securities LLC.......... 609,228 91,384
Barclays Capital Inc.................... 609,228 91,384
Calyon Securities (USA) Inc............. 609,228 91,384
Deutsche Bank Securities Inc............ 609,228 91,384
HSBC Securities (USA) Inc............... 609,228 91,384
ING Financial Markets LLC............... 609,228 91,384
KeyBanc Capital Markets, a Division
of McDonald Investments Inc........... 609,228 91,384
Lazard Capital Markets Inc.............. 609,228 91,384
UBS Securities LLC...................... 609,228 91,384
Bear, Xxxxxxx & Co...................... 296,152 44,422
BNP Paribas Securities Corp............. 296,152 44,422
BNY Capital Markets, Inc................ 296,152 44,422
Comerica Securities, Inc................ 296,152 44,422
Xxxxxxx & Partners Securities, LLC...... 296,152 44,422
Mizuho International plc................ 296,152 44,422
PNC Capital Markets LLC................. 296,152 44,422
Scotia Capital (USA) Inc................ 296,152 44,422
------------ -----------
Total................................. 33,846,000 5,076,900
============ ===========
SCHEDULE II
(a) Issuer Free Writing Prospectuses not included in the Pricing Disclosure
Package:
None
(b) Additional Documents Incorporated by Reference:
Current Report on Form 8-K dated December 6, 2005
ANNEX I
WRITTEN MATERIALS PROVIDED TO PARTICIPANTS IN DIRECTED SHARE PROGRAM
o Memorandum to Directors and Executive Management Board Members that are
Potential Participants in the XL Capital Ltd Directed Equity Program, from
Xxxxxxx Xxxxx regarding General Information about the Director and Executive
Management Board Member Participation in the XL Capital Ltd Equity Units and
Ordinary Shares Offerings, dated December 2, 2005
o Registration Statement.
o Pricing Prospectus.
o Final term sheet.
o Prospectus.
ANNEX II-1
XXXXXXX XXXXXXX & XXXXXXXX LLP FORM OF OPINION
----------------------------------------------
ANNEX II-2
XXXXXXX XXXXXXX & XXXXXXXX LLP FORM OF NEGATIVE ASSURANCE LETTER
----------------------------------------------------------------
ANNEX III-1
XXXXXX XXXXXX & XXXXXXX LLP FORM OF OPINION
-------------------------------------------
ANNEX III-2
XXXXXX XXXXXX & XXXXXXX LLP FORM OF NEGATIVE ASSURANCE LETTER
-------------------------------------------------------------
ANNEX IV
XXXXXXX XXXXXXXX XXXXXX FORM OF OPINION
---------------------------------------
ANNEX V
XL CAPITAL LTD FORM OF OPINION
------------------------------
