EXHIBIT 1.2
October 31, 2005
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
IPC Holdings, Ltd., a Bermuda company (the "COMPANY"), proposes to
issue and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") for whom you are acting as representatives (the "MANAGERS")
9,000,000 of its 7.25% series A mandatory convertible preferred shares, $.01 par
value per share (the "SHARES"), mandatorily convertible into its common shares,
$.01 par value per share. The common shares, $.01 par value per share, of the
Company are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares and the Common Stock issuable upon conversion of the Shares on Form S-3,
Registration No. 333-128905. The registration statement as amended to the date
of this Agreement is referred to as the "REGISTRATION STATEMENT"; the prospectus
included therein at the time the Registration Statement became effective, is
referred to as the "BASIC PROSPECTUS"; the Basic Prospectus, as supplemented by
the prospectus supplement dated October 31, 2005 (the "PROSPECTUS SUPPLEMENT"),
relating to the Shares, in the form first used to confirm sales of the Shares is
hereinafter referred to as the "PROSPECTUS"; provided, that all references to
the "Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), prior to the execution of this
Agreement. If the Company has filed an abbreviated registration statement (the
"RULE 462 REGISTRATION STATEMENT") to register additional shares of Common Stock
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement.
1. Representations and Warranties. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act; the Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement is in
effect, and
no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any 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, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iii) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph 1(b) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; and the
documents incorporated by reference in the Prospectus, at the time they
were, or hereafter are, filed with the Commission, complied and, at any
time when a prospectus relating the Shares and the Common Stock issuable
upon conversion of the Shares is required to be delivered under the
Securities Act in connection with sales by any Underwriter or dealer, will
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
(c) The Company has been duly incorporated, is validly existing as an
exempted company in good standing under the laws of Bermuda, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and the Subsidiaries (as defined below), taken as a whole.
(d) (i) IPCRe Limited (formerly International Property Catastrophe
Reinsurance Company, Ltd.), a Bermuda company ("IPCRE"), has been duly
incorporated, is validly existing as an exempted company in good standing
under the laws of Bermuda, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and the Subsidiaries, taken as
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a whole; all of the issued shares of capital of IPCRe have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(ii) IPCRe Europe Limited, an Irish company ("IPCRE EUROPE"
and, together with IPCRe, the "DESIGNATED SUBSIDIARIES"), has been duly
incorporated, is validly existing as a company in good standing under
the laws of Ireland, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and the Subsidiaries,
taken as a whole; all of the issued shares of capital of IPCRe Europe
have been fully paid and non-assessable and are owned directly by
IPCRe, free and clear of all liens, encumbrances, equities or claims.
(iii) IPCRe Underwriting Services Limited, a Bermuda company
("IPCUSL" and, together with IPCRe and IPCRe Europe, the
"SUBSIDIARIES"), has been duly incorporated, is validly existing as a
company in good standing under the laws of Bermuda, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and the Subsidiaries, taken as a whole; all of the issued
shares of capital of IPCUSL have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(iv) Except as described in the Prospectus, there are no
material restrictions, whether direct or indirect, under any provision
of applicable law, under the memorandum of association or bye-laws or
other organizational document of any subsidiary of the Company, under
any agreement or other instrument binding upon the Company or IPCRe or
any of their properties, or under any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or IPCRe, on the ability of any subsidiary of the Company: (i) to pay
any dividends to the Company; (ii) to make any other distribution on
such subsidiary's capital stock; (iii) to repay to the Company any
loans or advances to such subsidiary from the Company; or (iv) to
transfer any of
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such subsidiary's property or assets to the Company or any other
subsidiary of the Company.
(e) The Company and the Designated Subsidiaries do not own any real
property. Each of the Company and IPCRe has good and marketable title to
all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made
of such property by the Company and IPCRe; and any real property and
buildings held under lease by the Company and IPCRe are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to
be made of such property and buildings by the Company and IPCRe.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) Neither the Company nor IPCRe is in violation of its memorandum of
association or bye-laws or other organizational document or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any material contract, lease or other agreement or
instrument to which it or either of them is a party or by which it or
either of them or their properties may be bound.
(h) The authorized capital of the Company conforms as to legal matters
to the description thereof contained in the Prospectus.
(i) The shares of Common Stock initially issuable upon conversion of
the Shares have been duly and validly authorized and reserved for issuance,
and when issued and delivered upon conversion, will be duly and validly
issued, fully paid and non-assessable.
(j) The Shares have been duly authorized and, when issued, delivered
and paid for in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights. The form of
certificates for the Shares conforms to the requirements of the laws of
Bermuda.
(k) The consolidated financial statements of the Company and its
consolidated subsidiaries (together with related notes) included in the
Registration Statement and Prospectus comply as to form in all material
respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder and present fairly the
financial position of the Company as at the dates indicated and the results
of its operations and the statements of its cash flows for the periods
specified; such financial statements have been prepared
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in conformity with United States generally accepted accounting principles
applied on a consistent basis during the periods involved, except as
disclosed therein; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. The consolidated balance sheets of the Company and its
subsidiaries as of December 31, 2004, 2003 and 2002 and the related
consolidated statements of income and comprehensive income, changes in
shareholders' equity and cash flows for the years ended December 31, 2004,
2003 and 2002 have been audited by KPMG. The selected financial data set
forth under the caption "Selected Consolidated Financial Data" in the
Prospectus and Registration Statement fairly present, on the basis stated
in the Prospectus and the Registration Statement, the information included
therein. All statutory financial statements of IPCRe where required to be
prepared in accordance with the insurance laws of Bermuda and the rules and
regulations promulgated thereunder, from which certain ratios and other
statistical data contained in the Registration Statement and the Prospectus
have been derived, have for each relevant period been prepared in
conformity in all material respects with the requirements of such insurance
laws and such rules and regulations and present fairly the information
purported to be shown. Statutory financial statements of IPCRe and IPCRe
Europe are not required to be prepared pursuant to the insurance laws of
any jurisdiction other than Bermuda and Ireland, respectively.
(l) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of: (i) applicable law, (ii) the memorandum of association or
bye-laws of the Company or either of the Designated Subsidiaries, (iii) any
agreement or other instrument binding upon the Company or IPCRe except to
the extent such contravention would not have a material adverse effect on
(a) the Company and the Subsidiaries, taken as a whole or (b) the Company's
ability to consummate the transactions contemplated by this Agreement, or
(iv) any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or IPCRe, except to the extent
such contravention would not have a material adverse effect on (a) the
Company and the Subsidiaries, taken as a whole or (b) the Company's ability
to consummate the transactions contemplated by this Agreement; and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
of obligations under this Agreement, except registrations and filings under
the Securities Act (as mentioned in Section 1(a)) and under the Exchange
Act, and such as may be required by the securities or Blue Sky or insurance
securities laws of the various states in connection with the offer and sale
of the Shares, as may be required in such jurisdictions outside the U.S.
where the Underwriters choose to market the Shares and such as may be
required and have been obtained from the Bermuda Monetary Authority.
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(m) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement). Subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus: (i) neither the Company nor IPCRe has
incurred any material loss or interference with its own business operations
(excluding losses suffered by cedents covered by reinsurance policies of
IPCRe) 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, or any other liability or obligation, direct or
contingent, that is material to the Company and the Subsidiaries, taken as
a whole; and (ii) there has not been any material change in the capital,
shareholders' equity, statutory surplus or reserves (including any such
change in the loss and loss adjustment expense reserves) of the Company or
IPCRe.
(n) No relationship, direct or indirect, or agreement, arrangement or
understanding (including, without limitation, any voting agreement), exists
between or among the Company or either of the Designated Subsidiaries and
any other party, which is required by the Securities Act to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed as required.
(o) There are no legal or governmental proceedings pending or, to the
Company's knowledge, threatened to which the Company or either of the
Designated Subsidiaries is a party or to which any of the properties of the
Company or either of the Designated Subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(p) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator of competent
jurisdiction involving the Company or its Designated Subsidiaries or to the
knowledge of the Company, or its or their property is pending or, to the
knowledge of the Company, threatened that (i) would reasonably be expected
to have a material adverse effect on the Company's ability to consummate
the transactions contemplated by this Agreement or (ii) would reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Company and its
Subsidiaries, taken as a whole, except as set forth in or contemplated in
the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
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(q) Each preliminary 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 Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(r) IPCRe is duly registered by the Bermuda Minister of Finance as a
Class 4 insurer under the Bermuda Insurance Act 1978, as amended, and any
applicable rules and regulations thereunder. IPCRe is not required to be
licensed or admitted as an insurer in, or otherwise to comply with the
insurance laws (including laws that relate to companies that control
insurance companies) and the rules, regulations and interpretations of the
insurance regulatory authorities thereunder (collectively, "INSURANCE
LAWS") of, any jurisdiction other than Bermuda in order to conduct its
business as described in the Prospectus. IPCRe Europe operates as a
reinsurer under the laws of Ireland and is not required to be licensed
under such laws. IPCUSL is registered in Bermuda and licensed as an
insurance agent.
(s) The Company and IPCRe possess 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 operated by them as described in the
Prospectus, except where the failure to possess such Permits would not have
a material adverse effect on the Company and the Subsidiaries, taken as a
whole; all of such Permits are in full force and effect, except where the
failure to be in full force and effect would not have a material adverse
effect on the Company and the Subsidiaries, taken as a whole; there is no
pending or, to the knowledge of the Company, contemplated or threatened
action, suit, proceeding, investigation or event against or involving the
Company or IPCRe (and the Company knows of no reasonable basis for any such
action, suit, proceeding, investigation or event) that could lead to the
revocation, modification, termination, suspension or any other material
impairment of the rights of the holder of any such Permit which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business or operations
of the Company and the Subsidiaries, taken as a whole; neither the Company
nor IPCRe has received any notification from any insurance authority,
commission or other insurance regulatory body to the effect that any
additional Permit from such authority, commission or body is needed to be
obtained by the Company or IPCRe or that the Company or IPCRe is not in
compliance with any applicable Insurance Laws; and no insurance regulatory
agency or body has issued any order or decree impairing, restricting or
prohibiting the payment of any dividends by the Company or IPCRe or the
continuation of the business of the Company or IPCRe as currently
conducted.
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(t) Each of the Company and IPCRe has filed all reports, information
statements and other documents as required to be filed pursuant to Bermuda
law, and has duly paid all taxes (including franchise taxes and similar
fees) it is required to have paid under Bermuda law, except where the
failure to file such statements or reports or pay such taxes would not have
a material adverse effect on the condition, financial or otherwise, or on
the earnings, business or operations of the Company and the Subsidiaries,
taken as a whole; and each of the Company and IPCRe maintains its books and
records in accordance with the Bermuda Insurance Act (as defined below),
except where the failure to so maintain its books and records would not
have a material adverse effect on the condition, financial or otherwise, or
on the earnings, business or operations of the Company and the
Subsidiaries, taken as a whole.
(u) IPCRe is in compliance with the applicable requirements of the
Bermuda Insurance Act 1978, as amended, and any applicable rules and
regulations thereunder (collectively, the "BERMUDA INSURANCE ACT"), except
where the failure to comply would not have a material adverse effect on the
Company and the Subsidiaries, taken as a whole; and, subject to the
disclosures in the Prospectus, each of the Company and IPCRe is in
compliance with the insurance laws and regulations of other jurisdictions
which are applicable to the Company or IPCRe, as the case may be, except
where the failure to comply would not have a material adverse effect on the
Company and the Subsidiaries, taken as a whole.
(v) All liability, casualty, directors and officers liability, surety
bonds and other similar insurance contracts that insure the business,
properties, operations or affairs of the Company and IPCRe or affect or
relate to the ownership, use or operations of the Company's or IPCRe's
assets or properties are in full force and effect and, to the knowledge of
the Company and IPCRe, are with financially sound and reputable insurers
and in accordance with normal industry practice.
(w) Neither the Underwriters nor any subsequent purchasers of the
Shares is subject to any stamp duty, excise or similar tax imposed in
Bermuda in connection with the offering, sale or purchase of the Shares.
(x) Any tax returns required to be filed by the Company or IPCRe in
any jurisdiction have been filed, and any material taxes, including any
withholding 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.
(y) The Company and IPCRe have received from the Bermuda Minister of
Finance an assurance under The Exempted Undertakings Tax
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Protection Act, 1966 of Bermuda as described in the Prospectus under the
caption "Bermuda Taxation," and neither the Company nor IPCRe has received
any notification to the effect (or is otherwise aware) that such assurance
may be revoked or otherwise not honored by the Bermuda government.
(z) 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 Shares by the Company (other than to residents of
Bermuda for Bermuda exchange control purposes); or (ii) by IPCRe to the
Company.
(aa) Neither the Company nor either of the Designated Subsidiaries has
taken or will take, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares pursuant to the distribution contemplated by
this Agreement, and other than as permitted by the Securities Act or the
applicable rules and regulations of the Commission thereunder, the Company
and the Designated Subsidiaries have not distributed and will not
distribute, prior to the later to occur of: (i) the Closing Date or the
Option Closing Date (as described below); and (ii) completion of the
distribution of the Shares, any prospectus or other offering material in
connection with the offering and sale of the Shares.
(bb) KPMG, who certified the financial statements and supporting
schedules included in the Registration Statement, is the independent
registered public accounting firm with respect to the Company as required
by the Securities Act.
(cc) The Company and IPCRe maintain "disclosure controls and
procedures" (as defined in Rule 13a-15(e) under the Exchange Act) and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in all material
respects in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with United States generally accepted
accounting principles and with statutory accounting principles, as the case
may be, and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(dd) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
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(ee) The Company and IPCRe (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(ff) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement.
(gg) The Company and IPCRe have not taken, directly or indirectly, any
action designed to or that would be reasonably expected to cause or result
in the Company and/or IPCRe being treated as: (i) engaged in a trade or
business within the United States for purposes of the Internal Revenue Code
of 1986, as amended (the "CODE"); or (ii) a Passive Foreign Investment
Company within the meaning of Section 1297 of the Code (i) and the Company,
to its knowledge, is not, and upon the consummation of the transactions
described hereby and the application of the proceeds as described in the
Registration Statement under the Caption "Use of Proceeds" will not become,
a Passive Foreign Investment Company within the meaning of Section 1297 of
the Code.
2. Agreements to Sell and Purchase. (a) The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Shares set forth in Schedule I hereto opposite
its name at $26.25 a share (the "PURCHASE PRICE").
(b) The Company hereby agrees that, without the prior written consent
of Managers on behalf of the Underwriters, it will not, during the period ending
60 days after the date of the Prospectus: (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock;
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above
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is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise or (iii) file any registration statement with the Commission
relating to the offering of any shares of Common Stock or any securities
convertible into or exerciseable for Common Stock. The foregoing sentence shall
not apply to (A) the sale of the Shares hereunder, or (B) the issuance of shares
of Common Stock pursuant to terms of the Shares, or (C) the issuance by the
Company of shares of Common Stock upon the exercise of an option outstanding
under the Company's existing stock option plan, the vesting of any restricted
stock unit outstanding under the Company's existing stock incentive plan or the
issuance of new options or restricted stock units thereunder or any warrant or
the conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing prior to the date hereof or (D) the
concurrent sale of 3,341,000 common shares (plus up to an additional 334,000
common shares to the extent the over allotment option is exercised) to American
International Group, Inc.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after this Agreement has become effective as in your judgment
is advisable. The Company is further advised by you that the Shares are to be
offered to the public initially at $26.25 a share (the "PUBLIC OFFERING PRICE")
and to certain dealers selected by you at a price that represents a concession
not in excess of $0.4725 a share under the Public Offering Price.
4. Payment and Delivery. (a) Payment for the Shares shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on November 4, 2005 or at such
other time on the same or such other date, as the Managers shall designate in
their sole discretion in writing. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
(b) Certificates for the Shares shall be in definitive form and
registered in such names and in such denominations as you shall request in
writing not later than one full business day prior to the Closing Date. The
certificates evidencing the Shares shall be delivered to you on the Closing Date
for the respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The several obligations
of the Underwriters to purchase and pay for the Shares on the Closing Date are
subject, in the discretion of the Underwriters, to the condition that all
representations and warranties and other statements of the Company in this
Agreement are, at and as of the date of this Agreement and the Closing Date,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and to the following
conditions:
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(a) The Prospectus as amended or supplemented in relation to
the Shares shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Securities Act and in accordance
with Section 6(b) hereof; no stop order suspending the effectiveness of
the Registration Statement shall have been issued or shall be pending
or, to the knowledge of the Company, shall be 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 the Underwriter.
(b) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded to the Company or any of its Designated
Subsidiaries or any of their securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated
in the Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(a) and 5(b) above
and to the effect that: (i) the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date; and (ii) the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
(d) The Underwriters shall have received on the Closing Date
an opinion (which opinion may be rendered in reliance upon the
appropriate opinions of Xxxxxxx Xxxx & Xxxxxxx as to Bermuda law) of
Xxxxxxxx & Xxxxxxxx LLP, U.S. counsel to the Company, dated the Closing
Date, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by the Company;
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(ii) the execution and delivery by the
Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene
any provision of (A) United States Federal or New
York law (provided, however, that such counsel need
express no opinion with respect to United States
Federal or state securities laws, antifraud laws and
fraudulent transfer laws), (B) to such counsel's
knowledge, any agreement or other instrument binding
upon the Company or IPCRe that is material to the
Company and the Subsidiaries, taken as a whole, or
(C) to such counsel's knowledge, any judgment, order
or decree of any governmental body, agency or court
having jurisdiction over the Company or IPCRe; and no
consent, approval, authorization or order of, or
qualification with, any United States Federal or New
York governmental body or agency is required for the
performance by the Company of its obligations under
this Agreement, except such as may be required by the
Securities Act, the Exchange Act and the securities
or Blue Sky or insurance securities laws of New York;
(iii) a registration statement with respect
to the Shares and the Common Stock issuable upon
conversion of the Shares has been declared effective
under the Securities Act and the Shares have been
registered under the Exchange Act; and based upon
oral information from a representative of NASDAQ, the
Common Stock issuable upon conversion of the Shares
have been approved for quotation by the Nasdaq
National Market System, subject to official notice of
issuance;
(iv) to such counsel's knowledge, such
counsel does not know of any legal or governmental
proceedings pending or threatened to which the
Company or IPCRe is a party or to which any of the
properties of the Company or IPCRe is subject that
are required to be described in the Registration
Statement or the Prospectus and are not so described
or of contracts or other documents that are required
to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the
Registration Statement that are not described or
filed or incorporated by reference as required;
(v) to such counsel's knowledge, neither the
Company nor IPCRe has received any notification from
any insurance authority, commission or other
insurance regulatory body to the effect that any
license from such authority, commission or body is
needed to be obtained by the Company or IPCRe or that
the Company or IPCRe is not in compliance with any
applicable Insurance Laws;
(vi) the discussion of United States tax
matters set forth under the headings "Certain United
States Federal Tax Considerations for Holders of
Common Shares" and "Certain United States Federal
Income
-13-
Tax Considerations for Holders of Series A Mandatory
Convertible Preferred Shares" in the Prospectus
fairly and accurately reflects such counsel's opinion
as to such tax laws (subject to the qualifications
and assumptions set forth in such discussion);
(vii) under the laws of the State of New
York relating to submission to jurisdiction, the
Company has validly submitted to the non-exclusive
jurisdiction of 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"), has
validly waived any objection to the venue of a
proceeding in any such New York Court and has validly
appointed CT Corporation System, as its authorized
agent, for the purpose and to the extent described in
Section 10 of this Agreement and assuming: (A) the
validity of such actions under Bermuda law; and (B)
the due authorization, execution and delivery of this
Agreement by or on behalf of the Underwriters; and
(C) that the Registration Statement and the
Prospectus do not contain any material misstatements
or omissions;
(viii) the Company is not now, and after
giving effect to the offering and the sale of the
Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an
"investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(ix) such counsel: (A) is of the opinion
that the Registration Statement and Prospectus
(except for financial statements and schedules and
other financial and statistical data included or
incorporated by reference therein as to which such
counsel need not express any opinion) comply as to
form in all material respects with the Securities Act
and the applicable rules and regulations of the
Commission thereunder; (B) has no reason to believe
that (except for financial statements and schedules
and other financial and statistical data as to which
such counsel need not express any belief) the
Registration Statement or the Prospectus as of the
date of the Prospectus Supplement contained any
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; and (C) has no reason to believe that
(except for financial statements and schedules and
other financial and statistical data as to which such
counsel need not express any belief) the Prospectus
as of the date of the Prospectus Supplement or as of
the Closing Date contained or contains any untrue
statement of a material fact or omitted or omits 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;
-14-
(x) the statements in the Prospectus under
the caption "Certain Relationships And Related
Transactions" insofar as such statements constitute
summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal
matters, documents and proceedings and fairly
summarize the matters referred to therein; and the
statements in the Prospectus under the captions "Plan
of Distribution" and "Underwriting" insofar as such
statements constitute a summary of this Agreement
fairly present the information called for with
respect to such document and fairly summarize the
documents referred to therein.
(xi) the documents incorporated by reference
in the Prospectus pursuant to Item 12 of Form S-3
under the Securities Act (other than the financial
statements, supporting schedules and other financial
information included or incorporated by reference
therein, as to which no opinion need to be rendered),
at the time they were filed (or at the time they were
amended, if applicable) with the Commission complied
as to form in all material respects with the
requirements of the Exchange Act and the rules and
regulations thereunder; and
(xii) the issue and sale of the Shares and
the issuance of Common Stock upon conversion of the
Shares, the execution, delivery and performance of
this Agreement and the consummation of the
transactions contemplated herein will not conflict
with or constitute a breach of, or default under, the
Amended and Restated Administrative Services
Agreement, the Investment Management Agreement, the
Investment Sub-Advisory Agreement and the Custodial
Agreement, all as described in the Prospectus.
(e) The Underwriters shall have received on the
Closing Date an opinion (which opinion may be rendered in
reliance on the appropriate opinions of Xxxxxxxx & Xxxxxxxx
LLP as to New York law) of Xxxxxxx Xxxx & Xxxxxxx, special
Bermuda counsel to the Company, dated the Closing Date, to the
effect that:
(i) each of the Company, IPCRe and IPCUSL
has been duly incorporated and is validly existing
under the laws of Bermuda in good standing (meaning
solely that each company has not failed to make any
filing with any Bermuda governmental authority or to
pay any Bermuda government fee or tax which would
make it liable to be struck off the Register of
Companies and thereby cease to exist under the laws
of Bermuda);
(ii) the Company has the necessary corporate
power and authority to execute, deliver and perform
its obligations under this
-15-
Agreement and the necessary corporate power to own its
property and conduct its business as described under the
caption "Business" in the Prospectus and under the caption
"Business" in the Company's annual report on Form 10-K for the
fiscal year ended December 31, 2004. The execution and
delivery of this Agreement by the Company and the performance
by the Company of its obligations thereunder will not violate
the memorandum of association or bye-laws of the Company nor
any applicable law, regulation, order or decree in Bermuda;
(iii) each of the Company, IPCRe and IPCUSL has
obtained all necessary licenses, authorizations and permits
from any government or public body or authority of Bermuda or
any sub-division thereof to conduct its business as described
under the caption "Business" in the Prospectus and under the
caption "Business" in the Company's annual report on Form 10-K
for the fiscal year ended December 31, 2004;
(iv) each of IPCRe and IPCUSL has the necessary
corporate power to own its property and conduct its business
as described under the caption "Business" in the Prospectus
and under the caption "Business" in the Company's annual
report on Form 10-K for the fiscal year ended December 31,
2004;
(v) the Company has taken all corporate action
required to authorize its execution, delivery and performance
of this Agreement. This Agreement has been duly executed and
delivered by or on behalf of the Company, and constitutes the
valid and binding obligations of the Company, enforceable
against the Company in accordance with the terms thereof;
(vi) the authorised capital of the Company conforms,
as to matters of Bermuda law, to the description thereof
contained in the Registration Statement and the Prospectus in
all material respects;
(vii) when issued and paid for in accordance with
this Agreement, the Shares to be sold by the Company, and when
converted pursuant to the terms of the Shares, the Common
Stock, will be duly authorized, validly issued, fully paid and
non-assessable and will not be subject to any statutory
pre-emptive or similar rights. The form of certificates for
the Shares conforms to the requirements of the laws of
Bermuda;
(viii) based solely upon a review of a copy of the
register of members of IPCRe certified by the Secretary of
IPCRe on November 4, 2005, the issued share capital of IPCRe
consists of 1,250 common shares, par value $200 per share,
registered in the name of the Company, each of which is
validly issued, fully paid and non-assessable;
-16-
(ix) based solely upon a review of a copy of the
register of members of IPCUSL certified by the Secretary of
IPCUSL on November 4, 2005, the issued share capital of IPCUSL
consists of 12,000 common shares, par value $1.00 per share,
registered in the name of the Company, each of which is
validly issued, fully paid and non-assessable;
(x) no order, consent, approval, license,
authorization or validation of, filing with or exemption by
any government or public body or authority of Bermuda or any
sub-division thereof is required to authorize or is required
in connection with the execution, delivery, performance and
enforcement of this Agreement, except such as have been duly
obtained or filed in accordance with Bermuda law;
(xi) it is not necessary or desirable to ensure the
enforceability in Bermuda of this Agreement that it be
registered in any register kept by, or filed with, any
governmental authority or regulatory body in Bermuda. However,
to the extent that this Agreement creates a charge over assets
of the Company or IPCRe, it may be desirable to ensure the
priority in Bermuda of the charge that it be registered in the
Register of Charges in accordance with Section 55 of the
Companies Act 1981. On registration, to the extent that
Bermuda law governs the priority of a charge, such charge will
have priority in Bermuda over any unregistered charges, and
over any subsequently registered charges, in respect of the
assets which are the subject of the charge. A registration fee
of $490 will be payable in respect of the registration. While
there is no exhaustive definition of a charge under Bermuda
law, a charge normally has the following characteristics: (i)
it is a proprietary interest granted by way of security which
entitles the chargee to resort to the charged property only
for the purposes of satisfying some liability due to the
chargee (whether from the chargor or a third party); and (ii)
the chargor retains an equity of redemption to have the
property restored to him when the liability has been
discharged. However, as this Agreement is governed by New York
law, the question of whether it would possess these particular
characteristics would be determined under New York law;
(xii) based solely upon a review of a copy of its
certificate of registration issued pursuant to the Insurance
Act, IPCRe is duly registered in Bermuda as a class 4 insurer
in accordance with the provisions of the Insurance Act;
(xiii) the statements in the Prospectus under the
captions "Description of Common Shares and Preferred Shares We
May Offer", "Bermuda Taxation" and "Enforceability of Civil
Liabilities Under The United States Federal Securities Laws",
"Risk Factors", "Description of The Series A Mandatory
Convertible Preferred Shares" and in the
-17-
Company's annual report on Form 10-K for the fiscal year ended
December 31, 2004 under the caption "Bermuda - The Insurance
Act of 1978, as amended, and Related Regulations (the
"INSURANCE ACT")" insofar as they purport to describe the
provisions of the laws of Bermuda referred to therein, are
correct in all material respects;
(xiv) there is no income or other tax of Bermuda
imposed by withholding or otherwise on any payment to be made
to or by the Company pursuant to this Agreement. This
Agreement will not be subject to ad valorem stamp duty in
Bermuda and no registration, documentary, recording, transfer
or other similar tax, fee or charge is payable in Bermuda in
connection with the execution, delivery, filing, registration
or performance of this Agreement other than as stated in
paragraph (xi) hereof;
(xv) the statements in the Prospectus under the
caption "Certain United States Federal Tax Considerations For
Holders of Common Shares" insofar as they purport to describe
the provisions of the laws of Bermuda referred to therein, are
correct in all material respects;
(xvi) the Company and IPCRe have each received from
the Bermuda Minister of Finance an assurance under The
Exempted Undertakings Tax Protection Act, 1966 as described in
the Prospectus under the caption "Bermuda Taxation";
(xvii) there is no income or other tax of Bermuda
imposed by withholding or otherwise on any dividend or
distribution to be made (i) by the Company to the holders of
the Shares or the Common Stock; or (ii) by IPCRe or IPCUSL to
the Company. The Company has been designated as non-resident
of Bermuda for the purposes of the Exchange Control Act, 1972
and, as such, is free to acquire, hold and sell foreign
currency and securities without restriction;
(xviii) the choice of New York law as the governing
law of this Agreement is a valid choice of law and would be
recognized and given effect to in any action brought before a
court of competent jurisdiction in Bermuda, except for those
laws (i) which such court considers to be procedural in
nature, (ii) which are revenue or penal laws or (iii) the
application of which would be inconsistent with public policy,
as such term is interpreted under the laws of Bermuda. The
submission in this Agreement to the non-exclusive jurisdiction
of any New York Court is valid and binding upon the Company;
(xix) the courts of Bermuda would recognize as a
valid judgment, a final and conclusive judgment in personam
obtained in a New York Court against the Company based upon
this Agreement under which
-18-
a sum of money is payable (other than a sum of money payable
in respect of multiple damages, taxes or other charges of a
like nature or in respect of a fine or other penalty) and
would give a judgment based thereon provided that (a) such
courts had proper jurisdiction over the parties subject to
such judgment, (b) such courts did not contravene the rules of
natural justice of Bermuda, (c) such judgment was not obtained
by fraud, (d) the enforcement of the judgment would not be
contrary to the public policy of Bermuda, (e) no new
admissible evidence relevant to the action is submitted prior
to the rendering of the judgment by the courts of Bermuda and
(f) there is due compliance with the correct procedures under
the laws of Bermuda;
(xx) based solely upon a search of the Cause Book of
the Supreme Court of Bermuda conducted at approximately 9:30
am on November 4, 2005 (which would not reveal details of
proceedings which have been filed but not actually entered in
the Cause Book at the time of our search), there are no
judgments against the Company, nor any legal or governmental
proceedings pending in Bermuda to which the Company is
subject; and
(xxi) based solely on a search of the Register of
Charges maintained by the Registrar of Companies pursuant to
Section 55 of the Companies Act 1981 conducted at
approximately 9:30 am on November 4, 2005 (which would not
reveal details of matters which have been lodged for
registration but not actually registered at the time of our
search), there are no charges registered on the assets of the
Company and two charges registered on the assets of the IPCRe.
(f) The Underwriters shall have received on the Closing Date
an opinion (which opinion may be rendered in reliance upon the
appropriate opinions of Xxxxxxx Xxxx & Xxxxxxx as to Bermuda law) of
Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in Sections 5(d)(i), 5(d)(ix)
and 5(d)(x) (but only as to the statements in the Prospectus under
"Underwriting" insofar as such statements constitute summaries of this
Agreement) above.
With respect to Section 5(d)(ix) above, Xxxxxxxx & Xxxxxxxx
LLP and Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief
are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are
without independent check or verification, except as specified.
-19-
The opinions of Xxxxxxxx & Xxxxxxxx LLP and Xxxxxxx Xxxx &
Xxxxxxx described in Sections 5(d) and 5(e) above shall be rendered to
the Underwriters at the request of the Company and shall so state
therein.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from KPMG, independent registered public accounting
firm, 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 or incorporated by reference into the Registration Statement and the
Prospectus; provided, that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(h) The "lock-up" agreements between you and certain officers
and directors of the Company, each substantially in the form of Exhibit
A-1 hereto and between you and AIG, substantially in the form of
Exhibit A-2 hereto relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the
Closing Date
(i) The Common Stock issuable upon conversion of the Shares
shall have been approved for quotation, subject to official notice of
issuance, on the Nasdaq National Market System.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto and documents
incorporated therein by reference) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned
paragraph (c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as
you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
-20-
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares and the issuance of
Common Stock issuable upon conversion of the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending December 31, 2006, that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified; (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon; (iii) the cost of printing or producing
any Blue Sky memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with
the qualification of the Shares for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of
-21-
counsel for the Underwriters in connection with such qualification and
in connection with the Blue Sky memorandum; (iv) all filing fees and
the reasonable disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc.; (v) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all
costs and expenses incident to listing the Common Stock on the Nasdaq
National Market; (vi) document production charges and expenses
associated with printing this Agreement; (vii) the cost of printing
certificates representing the Shares; (viii) the costs and charges of
any transfer agent, registrar or depositary; (ix) the costs and
expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of
the Shares, 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 the cost of any aircraft chartered in connection with the road
show; and (x) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except
as provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on
resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
(g) The Company will use its best efforts to obtain and
maintain the inclusion of the Common Stock issuable upon conversion of
the Shares on the Nasdaq National Market and the registration of the
Common Stock under the Exchange Act.
(h) The Company will at all times reserve and keep available,
solely for issuance upon the conversion of the Shares, out of its
authorized but unissued common shares $.01 par value per share, free of
preemptive rights, that number of shares of Common Stock as will from
time to time be issuable upon conversion of all the Shares that are
then issued and outstanding.
7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each affiliate of any
Underwriter within the meaning of Rule 405 under the Securities Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any
-22-
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Underwriter, but only
with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for
use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 7(a) or 7(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless: (i) the
indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel; or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such reasonable
fees and expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by Citigroup Global Markets Inc. and
Xxxxxx Xxxxxxx & Co. Incorporated in the case of parties indemnified
pursuant to Section 7(a), and by the Company, in the case of parties
indemnified pursuant to Section 7(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the
-23-
indemnified party from and against any loss or liability by reason of
such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
proceeding and 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) To the extent the indemnification provided for in Section
7(a) or 7(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities: (i) in such proportion as is
appropriate to reflect the relative benefits received by such
indemnifying party or parties on the one hand and the indemnified party
or parties on the other hand from the offering of the Shares; or (ii)
if the allocation provided by clause 7(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(d)(i) above but also
the relative fault of such indemnifying party or parties on the one
hand and of indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand in connection
with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether 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 or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable
-24-
considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, 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 Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
7 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of: (i) any termination of this
Agreement; (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or any affiliate
of any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company; and (iii) acceptance
of and payment for any of the Shares.
8. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if after the execution and delivery of
this Agreement and prior to the Closing Date: (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market
System, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange
or the Chicago Board of Trade, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred, (iv) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or in Bermuda by Bermuda authorities, or
(v) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse; and in the case of any of the events specified 8(a)(i)
through 8(a)(v), singly or together with any other event, makes it, in your
judgment, impracticable or inadvisable to proceed with the offer, sale, or
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
-25-
9. Effectiveness; Defaulting Underwriters. (a) This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
(b) If, on the Closing Date any one or more of the Underwriters shall
fail or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Shares to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the number of Shares set forth opposite their respective names in Schedule
I bears to the aggregate number of Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided,
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Shares and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased, and arrangements satisfactory to you
and the Company for the purchase of such Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
(c) If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement (other than pursuant to the foregoing paragraphs of this Section 9),
the Company will reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Submission to Jurisdiction; Appointment of Agent for Service. In
further consideration of the agreement of the Underwriters herein contained, the
Company irrevocably agrees and covenants that any legal suit, action or
proceeding against the Company brought by any Underwriter or by any person who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act of Section 20 of the Exchange Act (a "CONTROL PERSON") arising
out of or based upon this Agreement or the transactions contemplated hereby may
be instituted in any New York Court, and
-26-
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, irrevocably waives any objection based
on the absence of a necessary or indispensable party in any such proceeding and
irrevocably submits to the non-exclusive jurisdiction of such courts in any such
suit, action or proceeding. The Company irrevocably waives any immunity to
jurisdiction to which it may otherwise be entitled or become entitled (including
immunity to pre-judgment attachment and execution) in any legal suit, action or
proceeding against it arising out of this Agreement or the transactions
contemplated hereby which is instituted in any New York Court, or in any Bermuda
court. To the extent permitted by law, Company hereby waives any objection to
the enforcement by any competent foreign court of any judgment validly obtained
in any such proceeding. The Company designates and appoints CT Corporation
System in The City of New York at 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, as its
respective authorized agent (the "AUTHORIZED AGENT") upon which 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 any New York Court
by any Underwriter or by any Control Person, expressly consents to the
non-exclusive 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 appointments shall be irrevocable. The Company represents
and warrants that the Authorized Agent has agreed to act as said agent for
service of process and the Company 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 Company's Authorized Agent and written notice of such service
of process to it shall be deemed, in every respect, effective service of process
upon the Company. Notwithstanding the foregoing, any action based on this
Agreement or the transactions contemplated hereby may be instituted by any
Underwriter or any Control Person in any competent foreign court.
11. Judgment Currency. In respect of any judgment or order given or
made for any amount due hereunder that is expressed and paid in currency (the
"JUDGMENT CURRENCY") other than United States dollars, the party against whom
such judgment or order has been given or made (the "INDEMNITOR") will indemnify
each party in whose favor such judgment or order has been given or made (the
"INDEMNITEE") against any loss incurred by such Indemnitee as a result of any
variation as 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 the Indemnitee is able to
purchase United States dollars with the amount of the judgment currency actually
received by such Indemnitee. The foregoing indemnity shall constitute a separate
and independent obligation of the Company and the Underwriters and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid. The term "rate of exchange" shall include any reasonable premiums and
costs of exchange payable in connection with the purchase of or conversion into
United States dollars.
-27-
12. Arms Length. The Company acknowledges that in connection with the
offering of the Shares: (i) the Underwriters have acted at arms length, are not
agents of, and owe no fiduciary duties to, the Company or any other person, (ii)
the Underwriters owe the Company only those duties and obligations set forth in
this Agreement and (iii) the Underwriters may have interests that differ from
those of the Company. The Company waives to the full extent permitted by
applicable law any claims it may have against the Underwriters arising from an
alleged breach of fiduciary duty in connection with the offering of the Shares.
13. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
16. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Managers, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; and to the Global Capital Markets Syndicate Desk, Xxxxxx
Xxxxxxx & Co. Incorporated (fax no.: (000) 000-0000) and confirmed to the Global
Capital Markets Syndicate Desk, Xxxxxx Xxxxxxx & Co. Incorporated at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Global Capital Markets Syndicate
Desk or, if sent to the Company, will be mailed, delivered or telefaxed to
000-000-0000 and confirmed to it at 000-000-0000 , Attention: Corporate
Secretary.
-28-
Very truly yours,
IPC HOLDINGS, LTD.
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
Accepted as of the date hereof:
By: CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director
By: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Executive Director
-29-
SCHEDULE I
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ -----------------
Citigroup Global Markets Inc......................................... 2,970,000
Xxxxxx Xxxxxxx & Co. Incorporated.................................... 2,970,000
Wachovia Capital Markets, LLC........................................ 2,160,000
Xxxxx, Xxxxxxxx & Xxxxx, Inc......................................... 900,000
-----------------
Total.............................................. 9,000,000
=================
I-1
EXHIBIT A-1
[FORM OF OFFICER/DIRECTOR LOCK-UP]
[Date]
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that the Managers propose to enter
into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with IPC Holdings,
Ltd., a Bermuda company (the "COMPANY") providing for the public offering (the
"PUBLIC OFFERING") by the several Underwriters, (the "UNDERWRITERS"), of
__________ shares (the "SHARES") of the Common Shares, $.01 par value per share,
of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of the
Managers on behalf of the Underwriters, the undersigned will not, during the
period commencing on the date hereof and ending 60 days after the date of the
final prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. In addition, the undersigned agrees that,
without the prior written consent of the Managers on behalf of the Underwriters,
it will not, during the period commencing on the date hereof and ending 60 days
after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. 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 shares of Common Stock except in compliance with the foregoing
restrictions.
A-1-1
The undersigned understands that the Company and the
Underwriters are relying upon this Lock-Up Agreement in proceeding toward
consummation of the Public 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.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
-----------------------------------
(Name)
-----------------------------------
(Address)
A-1-2
EXHIBIT A-2
[FORM OF AIG LOCK-UP]
[Date]
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that the Managers propose to enter
into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with IPC Holdings,
Ltd., a Bermuda company (the "COMPANY") providing for the public offering (the
"PUBLIC OFFERING") by the several Underwriters (the "UNDERWRITERS"), of
__________ shares (the "SHARES") of the Common Shares, $.01 par value per share,
of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of the
Managers on behalf of the Underwriters, neither it nor any of its subsidiaries
will, during the period commencing on the date hereof and ending 60 days after
the date of the final prospectus relating to the Public Offering (the
"PROSPECTUS"), (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to sales to the extent necessary, in the judgment of the
undersigned, to prevent the undersigned from becoming a "United States 25%
Shareholder" (as defined in the Prospectus). In addition, the undersigned agrees
that, without the prior written consent of the Managers on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 60 days after the date of the Prospectus, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and
A-2-1
registrar against the transfer of the undersigned's shares of Common Stock
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 Public 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.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
AMERICAN INTERNATIONAL GROUP, INC.
By:
-----------------------------------
Name:
Title:
A-2-2
