EXHIBIT 1.1
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
$100,000,000
4.50% SENIOR CONVERTIBLE NOTES DUE 2022
PURCHASE AGREEMENT
November 18, 2002
New York, New York
BEAR, XXXXXXX & CO. INC.
XXXXXX XXXXXX SECURITIES INC.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Scottish Annuity & Life Holdings, Ltd., an exempted company limited by
shares organized and existing under the laws of the Cayman Islands (the
"Company"), proposes to issue and sell to the several Initial Purchasers listed
in Schedule I hereto (the "Initial Purchasers") $100,000,000 aggregate principal
amount of the Company's 4.50% Senior Convertible Notes due 2022 (the "Firm
Notes"), subject to the terms and conditions set forth herein. In addition, the
Company has granted to the Initial Purchasers an option described in Section
3(c) hereof to purchase up to an additional $15,000,000 in aggregate principal
amount of its 4.50% Senior Convertible Notes due 2022 (the "Optional Notes" and,
together with the Firm Notes, the "Notes"). The Notes shall be convertible into
shares (the "Conversion Shares") of the Company's ordinary shares, par value
US$.01 per share (the "Ordinary Shares"). The Notes are to be issued pursuant to
an Indenture (the "Indenture") to be entered into between the Company and The
Bank of New York, as trustee (the "Trustee"). This is to confirm the agreement
concerning the purchase of the Notes from the Company by the Initial Purchasers.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Indenture.
1. ISSUANCE OF SECURITIES. The Company proposes, upon the terms and subject
to the conditions set forth herein, to issue and sell to the Initial Purchasers
the Firm Notes.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Securities Act"), the Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF 1933"), OR
ANY STATE SECURITIES LAWS, AND MAY
NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT OF 1933 OR (B) IT IS AN
INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3), or (7) UNDER THE SECURITIES ACT OF 1933 (AN
"INSTITUTIONAL ACCREDITED INVESTOR");
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
HEREBY OR THE ORDINARY SHARES ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT OF 1933, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF
AVAILABLE), (D) TO ANY INSTITUTIONAL ACCREDITED INVESTOR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (IF
AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(C) OR 2(E) ABOVE), A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND."
A comparable legend shall be placed on share certificates representing
Conversion Shares until such time as such legend is no longer required under the
applicable requirements of the Securities Act.
2. OFFERING. The Notes will be offered and sold to the Initial Purchasers
pursuant to an exemption from the registration requirements under the Securities
Act.
The Company has prepared a preliminary confidential offering memorandum
dated November 18, 2002 (including all Incorporated Documents (as defined
below), the "Preliminary Offering Memorandum") and a final confidential offering
memorandum dated November 18, 2002 (as amended or supplemented and including all
Incorporated Documents, the "Offering Memorandum").
The Initial Purchasers have advised the Company that the Initial Purchasers
will make offers (the "Exempt Resales") of the Notes on the terms set forth in
the Offering Memorandum solely to persons whom the Initial Purchasers reasonably
believe to be "qualified institutional
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buyers," as defined in Rule 144A under the Securities Act ("QIBs"). These QIBs
are referred to herein as the "Eligible Purchasers." The Company consents to the
use of the Offering Memorandum, and any amendments and supplements thereto
required pursuant hereto, by the Initial Purchasers in connection with Exempt
Resales.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated as of the Closing Date (as defined
herein), containing the terms described in the Offering Memorandum. This
Agreement, the Notes, the Indenture and the Registration Rights Agreement are
hereinafter referred to collectively as the "Operative Documents."
As used herein, the term "Incorporated Documents" includes (i) the
Company's Annual Report on Form 10-K for the year ended December 31, 2001, (ii)
its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002, June
30, 2002 (as amended on Form 10-Q/A filed with the Securities and Exchange
Commission (the "Commission") on August 8, 2002) and September 30, 2002, (iii)
its Current Report on Form 8-K/A filed with the Commission on January 11, 2002,
(iv) its Current Report on Form 8-K filed with the Commission on November 18,
2002, (v) the description of the Company's Ordinary Shares that is contained in
a registration statement on Form 8-A filed with the Commission on January 16,
2002, (vi) any future filings the Company makes with the Commission under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the period from the date of this Agreement
until all of the Notes are distributed to Eligible Purchasers and (vii) any
amendments or supplements to any of the foregoing.
3. PURCHASE, SALE AND DELIVERY OF THE NOTES. (a) On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the Initial
Purchasers, and the Initial Purchasers agree to purchase from the Company, the
Firm Notes at a purchase price of 97.0% of the principal amount thereof, plus
accrued interest, if any, from November 22, 2002.
(b) The Company will deliver the Firm Notes to the Initial Purchasers,
against payment by the Initial Purchasers of the purchase price therefor in
immediately available funds by wire transfer to an account designated by the
Company (provided that the Company shall give at least two business days' prior
written notice to the Initial Purchasers of the information required to effect
such wire transfer) prior to 10:00 a.m., New York City time, on November 22,
2002, or at such other time and date as may be agreed upon by the Company and
Bear, Xxxxxxx & Co. Inc., on behalf of the Initial Purchasers. Delivery of the
documents required by Section 9 hereof with respect to the Notes shall be made
at such time and date at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other location as may be
agreed upon by the Company and Bear, Xxxxxxx & Co. Inc., on behalf of the
Initial Purchasers. For purposes of this Agreement, "Closing Date" shall mean
the hour and date of such delivery and payment.
(c) In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Initial Purchasers to purchase
up to $15,000,000 aggregate principal amount of
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Optional Notes from the Company at the same price as the purchase price to be
paid by the Initial Purchasers for the Firm Notes. The option granted hereunder
may be exercised at any time (but not more than once) upon notice by the Initial
Purchasers to the Company, which notice may be given at any time within 30 days
from the date of this Agreement, only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Firm Notes. Such notice shall set forth (i) the amount
(which shall be an integral multiple of $1,000 in aggregate principal amount) of
Optional Notes as to which the Initial Purchasers are exercising the option,
(ii) the names and denominations in which the Optional Notes are to be
registered and (iii) the time, date and place at which such Notes will be
delivered (which time and date may be simultaneous with, but not earlier than,
the Closing Date; and in such case the term "Closing Date" shall refer to the
time and date of delivery of the Firm Notes and the Optional Notes). Such time
and date of delivery, if subsequent to the Closing Date, is called the
"Additional Closing Date" and shall be determined by the Initial Purchasers.
Such date may be the same as the Closing Date but not earlier than the Closing
Date. The Company will deliver the Optional Notes on the Closing Date or the
Additional Closing Date, as the case may be, against payment by the Initial
Purchasers of the purchase price therefor in immediately available funds by wire
transfer to the account designated by the Company. If any Optional Notes are to
be purchased, each Initial Purchaser agrees to purchase the principal amount of
Optional Notes (subject to such adjustments to eliminate fractional amounts as
Bear, Xxxxxxx & Co. Inc. in its sole discretion shall determine) that bears the
same proportion to the total principal amount of Optional Notes to be purchased
as the principal amount of Firm Notes set forth on Schedule 1 opposite the name
of such Initial Purchaser bears to the total principal amount of Firm Notes. The
Initial Purchasers may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
(d) Delivery of the Notes on the Closing Date and any Additional Closing
Date will be in book-entry form through the facilities of The Depository Trust
Company, New York, New York ("DTC"). One or more notes in definitive global
form, registered in the name of Cede & Co., as nominee of DTC, having an amount
corresponding to the principal amount of the Notes (the "Global Note") sold
pursuant to Exempt Resales to Eligible Purchasers shall be made available to the
Initial Purchasers for inspection not later than 9:30 a.m. on the business day
immediately preceding the Closing Date and the Additional Closing Date, if
applicable. The Company will cause the Trustee to deposit as original issue the
Global Note pursuant to the Full Fast Delivery Program of DTC.
4. PAYMENT OF EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of its
obligations hereunder, including all costs and expenses in connection with: (i)
the preparation, printing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the Initial Purchasers in
connection with the Exempt Resales; (ii) the qualification or registration of
the Notes for offer and sale under state securities laws (including, without
limitation, the cost of printing and mailing a preliminary and final Blue Sky
Memorandum and the reasonable fees and disbursements of counsel for the Initial
Purchasers relating thereto); (iii) the issuance, transfer and delivery of the
Notes to the Initial Purchasers; (iv) all travel of the Company's officers and
employees and any other expense
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of the Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Notes; (v) preparing the certificates for the
Notes; (vi) the rating of the Notes by rating agencies; (vii) the initial
designation and continued eligibility of the Notes for trading in the PORTAL
market; (viii) the listing of the Conversion Shares and the Ordinary Shares that
may be delivered by the Company to holders of the Notes upon the exercise by
such holders of certain repurchase rights upon the terms and conditions set
forth in the Indenture (such Ordinary Shares, the "Put Shares") on the New York
Stock Exchange (the "NYSE"), (ix) the reasonable fees and expenses of the
Trustee and its counsel and costs and charges of any registrar, transfer agent,
paying agent, conversion agent or bid calculation agent; (x) the approval of the
Notes for clearance and settlement through DTC and (xi) the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section 4. It is understood, however, that except as provided in this Section,
and Sections 7, 8 and 12 hereof, the Initial Purchasers will pay all of their
own costs and expenses, including the fees of their counsel and any advertising
expenses connected with any offers they may make.
5. AGREEMENTS OF THE COMPANY. For purposes of this Section 5, "Closing
Date" shall refer to the Closing Date for the Firm Notes and any Additional
Closing Date for the Optional Notes. The Company covenants and agrees with the
Initial Purchasers as follows:
(a) To notify the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such notice in writing, of (i) any filing
made by the Company of information relating to the offering of the Notes with
any securities exchange or any other regulatory body in the United States or any
other jurisdiction and (ii) the issuance by any state securities commission of
any stop order suspending the qualification or exemption from qualification of
any Notes for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority. The Company shall make every reasonable effort to prevent
the issuance of any stop order or order suspending the qualification or
exemption of any Notes under any state securities or Blue Sky laws and, if at
any time any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption of any Notes under any
state securities or Blue Sky laws, the Company shall make every reasonable
effort to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) Not to make any amendment or supplement to the Offering
Memorandum or to any Incorporated Documents to which the Initial Purchasers
shall object in writing after being timely furnished in advance a copy thereof.
(c) If, at any time prior to the completion of the distribution
of the Notes by the Initial Purchasers, any event shall occur as a result of
which, in the judgment of the Company or in the reasonable opinion of counsel
for the Company or counsel for the Initial Purchasers, it becomes necessary or
advisable to amend or supplement the Offering Memorandum or any Incorporated
Document in order that the Offering Memorandum or such Incorporated Document not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when the Offering Memorandum is delivered to an Eligible
Purchaser, not misleading, or if it is necessary or advisable to amend or
supplement the Offering Memorandum or any Incorporated Document to
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comply with applicable law, (i) to promptly notify the Initial Purchasers and
(ii) forthwith to prepare an appropriate amendment or supplement to such
Offering Memorandum or Incorporated Document so that the statements therein as
so amended or supplemented will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to an Eligible Purchaser, not misleading, or so that such Offering
Memorandum or Incorporated Document will comply with applicable law.
(d) To promptly deliver to each of the Initial Purchasers such
number of copies of any Preliminary Offering Memorandum and, prior to 10:00
a.m., New York City time, on the business day next succeeding the date of this
Agreement and from time to time thereafter, the Offering Memorandum, all
documents incorporated by reference in the Offering Memorandum and all
amendments of and supplements to such documents, if any, as the Initial
Purchasers may reasonably request.
(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration of the
Notes under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may reasonably request and to continue such qualification in effect
so long as required for the Exempt Resales; provided, however, that the Company
shall not be required in connection therewith to register or qualify as a
foreign corporation where it is not now so qualified or to take any action that
would subject it to service of process in suits or taxation, in each case, other
than as to matters and transactions relating to the Offering Memorandum or
Exempt Resales, in any jurisdiction where it is not now so subject.
(f) For a period of 90 days from the date of the Offering
Memorandum, not to offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Commission a registration statement
under the Securities Act relating to, any debt securities issued or guaranteed
by the Company and having a maturity of more than one year from the date of
issue or, with regard to Ordinary Shares, issue, sell, offer or agree to sell,
grant any option for the sale of, pledge, make any short sale or maintain any
short position, establish or maintain a "put equivalent position" (within the
meaning of Rule 16-a-1(h) under the Exchange Act ), enter into any swap,
derivative transaction or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Ordinary Shares
(whether any such transaction is to be settled by delivery of Ordinary Shares,
other securities, cash or other consideration) or otherwise dispose of any
Ordinary Shares (or any securities convertible into, exercisable for or
exchangeable for Ordinary Shares) or interest therein of the Company or of any
of the Subsidiaries without the Initial Purchasers' prior written consent, other
than the issuance of Conversion Shares and the Put Shares and the Company's
issuance of Ordinary Shares upon (i) the exercise of warrants outstanding on the
date hereof; (ii) the exercise of currently outstanding options; or (iii) the
grant and exercise of options under, or the issuance and sale of shares pursuant
to, employee stock option plans in effect on the date hereof. Notwithstanding
the foregoing, the Company may file with the Commission, without the prior
consent of Bear, Xxxxxxx & Co. Inc. on behalf of the Initial Purchasers, (A) the
shelf registration statement to be prepared in accordance with the Company's
obligations under the Registration Rights Agreement and (B) a
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registration statement in connection with the resale of the options and warrants
to purchase Ordinary Shares that are subject to a registration rights agreement
in effect on the date hereof.
(g) To obtain the undertaking, substantially in the form
attached hereto as Annex IV, of each of its officers and directors listed on
Schedule II attached hereto and shareholder Pacific Life Insurance Company to
not, during the period of 90 days from the date of the Offering Memorandum,
directly or indirectly, without Bear, Xxxxxxx & Co. Inc.'s prior written
consent, sell, offer or agree to sell, grant any option for the sale of, pledge,
make any short sale or maintain any short position, establish or maintain a "put
equivalent position" (within the meaning of Rule 16-a-1(h) under the Exchange
Act ), enter into any swap, derivative transaction or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Ordinary Shares (whether any such transaction is to be settled
by delivery of Ordinary Shares, other securities, cash or other consideration)
or otherwise dispose of, any Ordinary Shares (or any securities convertible
into, exercisable for or exchangeable for Ordinary Shares) or interest therein
of the Company or of any of the Subsidiaries.
(h) During the period of three years from the date of the
Offering Memorandum, to furnish to the Initial Purchasers copies of all reports
or other communications (financial or other) furnished to security holders, and
to deliver to the Initial Purchasers (i) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as the Initial Purchasers may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and the
Subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission).
(i) To apply the net proceeds it receives from the sale of the
Notes as set forth under the caption "Use of Proceeds" in the Offering
Memorandum.
(j) To use its best efforts to list the Conversion Shares on the
NYSE at or prior to the effectiveness of any registration statement prepared in
connection with the Company's obligations under the Registration Rights
Agreement.
(k) During the period prior to the completion of the Exempt
Resales of the Notes by the Initial Purchasers, to file all documents required
to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act within the time periods required by the Exchange Act and the rules and
regulations thereunder.
(l) For so long as any of the Notes remain outstanding and
during any period in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act, to make available to any holder or beneficial owner of Notes
in connection with any sale thereof and any prospective purchaser of such Notes
from such holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act.
(m) Not to take, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any
7
security of the Company. Except as permitted by the Securities Act, not to,
prior to the later to occur of (i) the Closing Date and (ii) completion of the
Exempt Resales of the Notes, distribute any (i) preliminary offering memorandum
other than the Preliminary Offering Memorandum, (ii) offering memorandum other
than the Offering Memorandum, or (iii) other offering material in connection
with the offering and sale of the Notes.
(n) To assist the Initial Purchasers in arranging for the
initial designation of the Notes for trading in the PORTAL market in accordance
with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL market.
(o) To at all times reserve and keep available, free of
preemptive rights, Ordinary Shares for the purpose of enabling the Company to
satisfy any obligations to issue Ordinary Shares upon conversion of the Notes.
(p) Prior to the Closing Date, to not, without the prior consent
of Bear, Xxxxxxx & Co. Inc. on behalf of the Initial Purchasers, which consent
shall not be unreasonably withheld, issue any press releases or other public
communications directly or indirectly and hold no press conferences, in each
case relating to the financial condition, results of operations, business,
properties, assets or liabilities of the Company or any of its subsidiaries or
the offering of the Notes.
(q) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) that would be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the sale to the Initial
Purchasers or the Eligible Purchasers of the Notes or to take any other action
that would result in the Exempt Resales not being exempt from registration under
the Securities Act.
(r) To use its commercially reasonable efforts in cooperation
with the Initial Purchasers to permit the Notes to be eligible for clearance and
settlement through DTC.
6. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and warrants
to the Initial Purchasers that:
(i) No registration under the Securities Act of the Notes is
required for the sale of the Notes to the Initial Purchasers as
contemplated hereby or for the Exempt Resales assuming (A) that the
purchasers who buy the Notes in the Exempt Resales are Eligible Purchasers
and (B) the accuracy of the Initial Purchasers' representations regarding
the absence of general solicitation in connection with the sale of Notes to
the Initial Purchasers and the Exempt Resales contained herein. No form of
general solicitation or general advertising (as defined in Regulation D
under the Securities Act) was used by the Company or any of its
representatives (other than the Initial Purchasers, as to which the Company
makes no representation or warranty) in connection with the offer and sale
of any of the Notes or in connection with Exempt Resales, including, but
not limited to, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. No securities of the same
class as the Notes have been issued and sold by the
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Company or any of its subsidiaries within the six-month period immediately
prior to the date hereof.
(ii) The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates and as of the Closing Date do not
and will not, and any supplement or amendment to the Preliminary Offering
Memorandum or the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties contained in this paragraph shall not apply to statements in
or omissions from the Preliminary Offering Memorandum or the Offering
Memorandum (or any supplement or amendment thereto) made in reliance upon
and in conformity with information relating to the Initial Purchasers
furnished to the Company in writing by Bear, Xxxxxxx & Co. Inc., on behalf
of the Initial Purchasers, expressly for use therein, it being understood
that the only such information so furnished is that described in Section 10
hereof.
(iii) Subsequent to the respective dates as of which information
is given in the Offering Memorandum, except as set forth in the Offering
Memorandum, the Company has not paid any dividends on its Ordinary Shares
and there has been no material adverse change or any development involving
a prospective material adverse change with respect to the business,
prospects, properties, operations, condition (financial or other),
shareholders' equity or results of operations of the Company and each
subsidiary (as defined in Rule 405 of the Securities Act; each, a
"Subsidiary" and together, the "Subsidiaries") of the Company, taken as a
whole (a "Material Adverse Change" or "Material Adverse Effect"), whether
or not arising from transactions in the ordinary course of business, and
since the date of the latest balance sheet presented in the Offering
Memorandum, neither the Company nor any of the Subsidiaries has incurred or
undertaken any liabilities or obligations, direct or contingent, or entered
into any transactions which are material to the Company and the
Subsidiaries taken as a whole, except for liabilities or obligations which
are reflected in the Offering Memorandum.
(iv) The only Subsidiaries of the Company are those listed on
Schedule III attached hereto. Each of the Company and the Subsidiaries has
been duly organized and is validly existing as a corporation or a company
limited by shares in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and the Subsidiaries is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a Material Adverse
Effect. Each of the Company and the Subsidiaries has all requisite power
and authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses and permits (collectively,
the "Consents") of and from all public, regulatory or governmental agencies
and bodies, to own, lease and operate its properties and conduct its
business as now being conducted and as described in the Offering
Memorandum, with such exceptions as would not have, individually or in
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the aggregate, a Material Adverse Effect. No Consent contains a materially
burdensome restriction not adequately disclosed in the Offering Memorandum.
(v) Ernst & Young LLP, who have certified the financial
statements and supporting schedules of the Company and World-Wide Holdings
Limited in the Offering Memorandum, are independent public accountants
within the meaning of the Securities Act and the rules and regulations of
the Commission promulgated thereunder.
(vi) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company and this Agreement has been
duly and validly executed and delivered by the Company.
(vii) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby or by the
Offering Memorandum, including the issuance, sale and delivery of the Notes
to be issued under the Indenture and sold and delivered by the Company
hereunder, do not and will not (i) conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement, instrument, franchise, license or permit to
which the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or their respective properties or assets
may be bound or (ii) violate or conflict with any provision of the
memorandum of association, articles of association, certificate or articles
of incorporation, charter, by-laws or other organizational documents of the
Company or any of the Subsidiaries or any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties, operations or assets.
No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their respective properties or
assets is required to be made or obtained by the Company for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby or by the Offering Memorandum, including
the issuance, sale and delivery of the Notes to be issued under the
Indenture and sold and delivered by the Company hereunder, except such that
(A) have been, or will be prior to the Closing Date, obtained, (B) may be
required under state securities, Blue Sky or insurance securities laws or
the rules of the National Association of Securities Dealers, Inc. or (C)
may be required in connection with the Company's obligations under the
Registration Rights Agreement.
(viii) The Company has duly and validly authorized share capital as
set forth in the Offering Memorandum; all outstanding Ordinary Shares
conform, or when issued will conform, to the description thereof in the
Company's Registration Statement on Form 8-A filed with the Commission on
January 16, 2002 incorporated by reference in the Offering Memorandum and
have been duly authorized, validly issued, fully paid and non-assessable.
10
None of the outstanding Ordinary Shares were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. Except as disclosed in
the Offering Memorandum, there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or
rights related to or entitling any person to purchase or otherwise to
acquire any share capital of, or any security convertible into or
exchangeable or exercisable for, the share capital of, or other ownership
interest in, the Company; and all of the issued shares of share capital of
each of its Subsidiaries have been duly and validly authorized and issued
and are fully paid and non-assessable and are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims.
(ix) The Company has duly and validly authorized and has
reserved, and covenants to continue to reserve, a sufficient number of
authorized but unissued Ordinary Shares, free of any preemptive or similar
rights, to satisfy the conversion rights of the Notes; and all Conversion
Shares and Put Shares, when issued and delivered upon conversion or
repurchase in accordance with the terms of the Indenture, will be duly and
validly authorized and issued, fully paid and non-assessable and free and
clear of all liens, encumbrances, equities or claims. The issuance of the
Conversion Shares is not subject to preemptive or other similar rights, or
any restriction upon the voting or transfer thereof pursuant to applicable
law or the Company's memorandum of association, articles of association,
certificate or articles of incorporation, charter, by-laws or other
organizational documents or any agreement to which the Company or any of
its Subsidiaries is a party or by which any of them may be bound. All
corporate action required to be taken by the Company for the authorization,
issuance and sale of the Notes and the issuance and delivery of the
Conversion Shares has been duly and validly taken.
(x) Each of the Company and the Subsidiaries which is engaged in
the business of insurance or reinsurance (each, an "Insurance Subsidiary"
and together, the "Insurance Subsidiaries") holds such insurance license,
certificates and permits from governmental authorities (including, without
limitation, from the insurance regulatory agencies of the various
jurisdictions where it conducts business) (the "Insurance Licenses") as are
necessary to the conduct of its business as described in the Offering
Memorandum; the Company and each Insurance Subsidiary have fulfilled and
performed all obligations necessary to maintain the Insurance Licenses;
there is no pending or, to the knowledge of the Company after due inquiry,
threatened action, suit, proceeding or investigation that could reasonably
be expected to result in the revocation, termination or suspension of any
Insurance License; and no insurance regulatory agency or body has issued,
or to our knowledge, commenced any proceeding for the issuance of, any
order or decree impairing, restricting or prohibiting the payment of
dividends or the making of any loan by any Subsidiary to its parent, which
would have, individually or in the aggregate, a Material Adverse Effect.
(xi) All reinsurance treaties and arrangements to which the
Company or any Subsidiary is a party as a cedant are in full force and
effect; neither the Company nor any Subsidiary is in material violation of
or in material default in the performance,
11
observance or fulfillment of any obligation, agreement, covenant or
condition contained therein; neither the Company nor any Subsidiary has
received any notice from any of the other parties to such treaties or
arrangements that such other party intends not to perform such treaty; and,
to the best knowledge of the Company and the Subsidiaries, the Company and
the Subsidiaries have no reason to believe that any of the other parties to
such treaties or arrangements will be unable to perform such treaty or
arrangement except to the extent adequately and properly reserved for in
the consolidated financial statements of the Company in the Offering
Memorandum.
(xii) The 2001 statutory annual statements of each of the
Insurance Subsidiaries required to prepare such statements and the
statutory balance sheets and income statements included in such statutory
annual statements together with related schedules and notes, have been
prepared, in all material respects, in conformity with statutory accounting
principles or practices required or permitted by the appropriate insurance
department of the jurisdiction of domicile of each such Insurance
Subsidiary, and such statutory accounting practices have been applied on a
consistent basis throughout the periods involved, except as may otherwise
be indicated therein or in the notes thereto, and present fairly, in all
material respects, the statutory financial position of the Insurance
Subsidiaries as of the dates thereof, and the statutory basis results of
operations of the Insurance Subsidiaries for the periods covered thereby.
(xiii) The Company and the Insurance Subsidiaries have made no
material changes in their insurance reserving practices since December 31,
2001, except where such change in such insurance reserving practices would
not reasonably be expected to have a Material Adverse Effect.
(xiv) The Company is not aware of any threatened or pending
downgrading of any Insurance Subsidiary's financial strength rating from
A.M. Best Company, Inc., Standard & Poor's Rating Services, Inc., Xxxxx'x
Investor Services or Fitch Ratings (each a "Rating Agency" and,
collectively, the "Rating Agencies").
(xv) Except as described in the Offering Memorandum, there is no
legal or governmental proceeding, including routine litigation, to which
the Company or any of the Subsidiaries is a party or of which any property
of the Company or any of the Subsidiaries is the subject which,
individually or in the aggregate, if determined adversely to the Company or
any of the Subsidiaries, is reasonably likely to have a Material Adverse
Effect, and to the best of the Company's knowledge, no such proceeding is
threatened or contemplated by governmental authorities or threatened or
contemplated by others.
(xvi) Neither the Company nor its Subsidiaries nor, to the
Company's knowledge, any of its affiliates has taken, nor will any of them
take, directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Ordinary Shares.
12
(xvii) Except for the Subsidiaries or as otherwise set forth in the
Offering Memorandum, the Company owns no capital stock, ordinary shares or
other beneficial interest, directly or indirectly, in any corporation,
partnership, joint venture or other business entity.
(xviii) The financial statements of the Company, including the notes
thereto, and supporting schedules in the Offering Memorandum present fairly
in all material respects the financial position of the Company and its
consolidated subsidiaries and the other entities for which financial
statements are in the Offering Memorandum as of the dates indicated and
condition and results of operations for the periods specified; except as
otherwise stated in the Offering Memorandum, said financial statements have
been prepared in conformity with U.S. generally accepted accounting
principles ("GAAP") in all material respects applied on a consistent basis
throughout the periods involved; and the supporting schedules in the
Offering Memorandum present fairly in all material respects the information
required to be stated therein. The other financial and statistical
information and data relating to the Company and its consolidated
subsidiaries in the Offering Memorandum present fairly in all material
respects the information included therein and have been prepared on a basis
consistent with that of the financial statements in the Offering Memorandum
and the books and records of the respective entities presented therein.
(xix) The financial statements of World-Wide Holdings Limited,
including the notes thereto, and supporting schedules in the Offering
Memorandum present fairly in all material respects the financial position
of World-Wide Holdings Limited and its consolidated subsidiaries and the
other entities for which financial statements are in the Offering
Memorandum as of the dates indicated and condition and results of
operations for the periods specified; except as otherwise stated in the
Offering Memorandum, said financial statements have been prepared in
conformity with GAAP applied on a consistent basis throughout the periods
involved; and the supporting schedules in the Offering Memorandum present
fairly in all material respects the information required to be stated
therein. The other financial and statistical information and data relating
to World-Wide Holdings Limited and its consolidated subsidiaries in the
Offering Memorandum present fairly in all material respects the information
included therein and have been prepared on a basis consistent with that of
the financial statements in the Offering Memorandum and the books and
records of the respective entities presented therein.
(xx) The pro forma and as adjusted financial information in the
Offering Memorandum has been properly compiled, and prepared in accordance
with the applicable requirements of the Securities Act and the rules and
regulations of the Commission promulgated thereunder and includes all
adjustments necessary to present fairly the pro forma combined financial
position of the Company and its subsidiaries at the respective dates
indicated and the results of their operations for the respective periods
specified.
13
(xxi) Except as disclosed in the Offering Memorandum, no holder of
securities of the Company has any rights to require the Company to include
any securities of the Company owned or to be owned by such holder in the
registration statement that will register the Notes and the Conversion
Shares. Except as disclosed in the Offering Memorandum, no person has the
right to require registration under the Securities Act of any Ordinary
Shares or other securities of the Company. No person has the right,
contractual or otherwise, to cause the Company to permit such person to
underwrite the sale of any of the Notes. Except for this Agreement, there
are no contracts, agreements or understandings between the Company or any
of its Subsidiaries and any person that would give rise to a valid claim
against the Company, its Subsidiaries or any Initial Purchaser for a
brokerage commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Notes.
(xxii) The Company is not, and upon consummation of the
transactions contemplated hereby, and at all times up to and including the
application of net proceeds as described in the Offering Memorandum, will
not be, subject to registration as an "investment company" under the
Investment Company Act of 1940, as amended.
(xxiii) Any real property and buildings held under lease or sublease
by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as would not have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries
has received any notice of any claim adverse to their ownership of any real
or personal property or of any claim against the continued possession of
any real property, whether owned or held under lease or sublease by the
Company or any of the Subsidiaries.
(xxiv) The Company and each of the Subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by each of them and have paid or made provision for
the payment of all taxes, assessments, governmental or other similar
charges, including without limitation, all sales and use taxes and all
taxes which the Company and each of the Subsidiaries are obligated to
withhold from amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not such
amounts are shown as due on any tax return), except in any case where the
failure to file any such return or to make any such provision, individually
or in the aggregate, would not have a Material Adverse Effect. No
deficiency assessment with respect to a proposed adjustment of the
Company's or any of the Subsidiaries' federal, state, or other taxes is
pending or, to the best of the Company's knowledge, threatened. There is no
tax lien, whether imposed by any federal, state, or other taxing authority,
outstanding against the assets, properties or business of the Company or
any of the Subsidiaries.
(xxv) As of the date hereof and on the Closing Date, the Company
and its Subsidiaries expect to engage predominantly in traditional
insurance and reinsurance activities that involve substantial transfer of
insurance or annuity risks, and intend to operate in a manner that they
will not (1) engage in certain nontraditional insurance or reinsurance
activities that do not involve a sufficient amount of risk transfer or (2)
14
maintain financial reserves in excess of the reasonable needs of the
insurance business of the Company and its Subsidiaries, to the extent
either of which would cause the insurance company exception to the passive
foreign investment company rules described in Section 1297 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code") not to
apply to the Company or its Subsidiaries.
(xxvi) The Ordinary Shares are registered pursuant to Section 12(b)
of the Exchange Act and the outstanding Ordinary Shares are listed on the
NYSE, and the Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Ordinary Shares under
the Exchange Act or de-listing the Ordinary Shares from the NYSE, nor has
the Company received any notification that the Commission or the NYSE is
contemplating terminating such registration or listing.
(xxvii) The Preliminary Offering Memorandum and the Offering
Memorandum, as of their respective dates, and each amendment or supplement
thereto, as of its date, contains the information specified in, and meets
the requirements of, Rule 144A(d)(4) under the Securities Act.
(xxviii) (i) The Incorporated Documents when they became effective or
were filed with the Commission, as the case may be, 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
not misleading; (ii) the Incorporated Documents 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 Exchange Act; and (iii) any
further documents so filed and incorporated by reference in the Offering
Memorandum 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
Exchange Act.
(xxix) Neither the Company nor any of the Subsidiaries (i) is in
violation of its memorandum of association, articles of association,
certificate or articles of incorporation, charter or by-laws, (ii) is in
default (and no event has occurred which, with notice or lapse of time or
both, would constitute such a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of the Subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its property
or assets is subject or (iii) is in violation in any respect of any statute
or any judgment, decree, order, rule or regulation of any court or
governmental or regulatory agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their properties or assets,
except in the case of (iii), any violation or default that would not have a
Material Adverse Effect.
(xxx) Each of the Company and the Subsidiaries owns or possesses
adequate right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and
15
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses as being conducted and as described in the Offering
Memorandum and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice
of any claim of conflict with, any such right of others, which claim, if
the subject of an unfavorable decision, ruling or judgment, could
reasonably be expected to result in a Material Adverse Effect. To the best
of the Company's knowledge, all material technical information developed by
and belonging to the Company which has not been patented has been kept
confidential.
(xxxi) No labor disturbance by the employees of the Company or any
of the Subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to have a Material Adverse Effect.
(xxxii) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or
Section 4975 of the Code) or "accumulated funding deficiency" (as defined
in Section 302 of ERISA) or any of the events set forth in Section 4043(b)
of ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred with
respect to any employee benefit plan of the Company or any of its
Subsidiaries which could have a Material Adverse Effect; each employee
benefit plan of the Company or any of its Subsidiaries is in compliance in
all material respects with applicable law, including ERISA and the Code;
the Company has not incurred and does not expect to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from
any "pension plan" (as defined in ERISA); and each "pension plan" of the
Company or any of its Subsidiaries that is intended to be qualified under
Section 401(a) of the Code has either received a favorable determination
letter from the Internal Revenue Service or the Company or any of its
Subsidiaries or intends to apply for such determination letter within the
requisite time frame and no event has occurred and no condition exists
which could reasonably be expected to result in the revocation or denial of
any such determination.
(xxxiii) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources which the Company
believes to be reliable and accurate.
(xxxiv) The Operative Documents will conform in all material
respects to the respective statements relating thereto contained in the
Offering Memorandum.
(xxxv) The Indenture has been duly and validly authorized by the
Company and, assuming the due authorization, execution and delivery of the
Indenture by the Trustee, when duly executed and delivered by the Company,
will be the legal, valid and binding agreement of the Company, enforceable
against it in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
16
creditors' rights generally and by general principles of equity. On the
Closing Date, the Indenture will contain all provisions necessary to permit
its qualification under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission.
(xxxvi) Prior to the effectiveness of any registration statement
prepared in connection with the Company's obligations under the
Registration Rights Agreement, the Indenture is not required to be
qualified under the Trust Indenture Act.
(xxxvii) The Notes have been duly and validly authorized by the
Company for issuance and sale to the Initial Purchasers pursuant to this
Agreement and, when issued and authenticated in accordance with the terms
of the Indenture and delivered against payment therefor in accordance with
the terms hereof and thereof, will be the legal, valid and binding
obligations of the Company, enforceable against it in accordance with their
terms and entitled to the benefits of the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee),
except as enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general
principles of equity.
(xxxviii) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms (assuming the due
authorization, execution and delivery of the Registration Rights Agreement
by the Initial Purchasers), (A) except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and by general principles of equity and (B) except as rights to indemnity
and contribution may be limited under applicable law.
(xxxix) When the Notes are issued and delivered pursuant to this
Agreement, no Note will be of the same class (within the meaning of Rule
144A under the Securities Act) as securities of the Company that are listed
on a national securities exchange, registered under Section 6 of the
Exchange Act or quoted in a United States automated inter-dealer quotation
system.
(xl) The Company has not distributed any offering material in
connection with the offering and sale of the Notes other than the
Preliminary Offering Memorandum and the Offering Memorandum.
The Company acknowledges that the Initial Purchasers and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel for the Company and counsel for the Initial Purchasers, will
rely upon the accuracy and truth of the foregoing representations and hereby
consent to such reliance.
17
Any certificate signed by any officer of the Company and delivered to the
Initial Purchasers or to counsel for the Initial Purchasers shall be deemed a
representation and warranty by the Company to each Initial Purchaser as to the
matters covered thereby.
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Notes with a
view to any distribution thereof that would violate the Securities Act or
the securities laws of any state of the United States or any other
applicable jurisdiction and (B) will be reoffering and reselling the Notes
only to QIBs in reliance on the exemption from the registration
requirements of the Securities Act provided by Rule 144A.
(iii) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) has been or
will be used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Notes, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
(iv) Such Initial Purchaser agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Notes only from, and will
offer to sell the Notes only to, Eligible Purchasers. Such Initial
Purchaser further acknowledges and agrees that any such Eligible Purchaser
shall (A) represent that it is a "Qualified Institutional Buyer" as defined
in Rule 144A under the Securities Act of 1933; (B) agree that it will not
within two years after the original issuance of the Notes resell or
otherwise transfer the Notes or the Conversion Shares except (1) to the
Company or any of our Subsidiaries, (2) to a Qualified Institutional Buyer
in compliance with Rule 144A under the Securities Act, (3) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act
(if available), (4) to any institutional accredited investor (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) pursuant to an
exemption from registration under the Securities Act (if available) or (5)
pursuant to a registration statement which has been declared effective
under the Securities Act and which continues to be effective at the time of
such transfer; and (C) agree that it will deliver to each person to whom
the Notes or the Conversion Shares are transferred (other than a transfer
pursuant to clause (B)(3) or (B)(5) above), a notice of the restrictions on
transfer set forth in (B) above.
Each Initial Purchaser acknowledges that the Company and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel for the Company and counsel for the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
18
7. INDEMNIFICATION. (a) The Company shall indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (including the documents
incorporated by reference therein), or any supplement thereto or amendment
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent but only to
the extent that any such loss, liability, claim, damage or expense arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with the information furnished to the Company and referred to in Section 10;
PROVIDED, FURTHER, that the foregoing indemnity agreement with respect to any
Preliminary Offering Memorandum shall not inure to the benefit of any Initial
Purchaser who failed to deliver an Offering Memorandum (as then amended or
supplemented, provided by the Company to the Initial Purchasers in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date) to the person asserting any losses, claims, damages and
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Memorandum,
or caused by any omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading, if such Offering Memorandum would
have cured the material misstatement or omission or alleged material
misstatement or omission. This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including under this Agreement.
(b) Each Initial Purchaser severally, and not jointly, shall indemnify and
hold harmless the Company, each of the officers and directors of the Company,
and each other person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to reasonable attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim, and any and all amounts
paid in settlement of any claim or litigation), jointly or severally, to which
they or any of them may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Offering Memorandum (including the documents incorporated by reference therein),
or any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact necessary
to make the statements therein, in light of the circumstances in which they are
made, not misleading, in each case to the extent, but only to the extent, that
any such loss, liability,
19
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with the information furnished to the
Company and referred to in Section 10; PROVIDED, HOWEVER, that in no case shall
the Initial Purchasers be liable or responsible for any amount in excess of the
amount by which the discounts and commissions applicable to the Notes purchased
by them pursuant to this Agreement exceeds the amount of any damages that the
Initial Purchasers have otherwise been required to pay pursuant to this Section
7. This indemnity will be in addition to any liability which any Initial
Purchaser may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve
the indemnifying party from any liability which it may have under this Section 7
to the extent that it is not materially prejudiced as a result thereof and in
any event shall not relieve it from any liability that such indemnifying party
may have otherwise than on account of the indemnity agreement hereunder). In
case any such claim or action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, an indemnifying
party may participate, at its own expense in the defense of such action, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided however, that counsel to the indemnifying party
shall not (except with the written consent of the indemnified party) also be
counsel to the indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties shall
not have employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, (iii) the
indemnifying party does not diligently defend the action after assumption of the
defense, or (iv) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified parties, effect any settlement or compromise of, or consent to the
entry of judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could have
been sought under this Section 7 or Section 8 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless (i) such
settlement, compromise or consent (A) includes an unconditional release of the
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (B) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
the indemnified party and (ii) the indemnifying party reaffirms its
indemnification obligations pursuant to this Agreement.
20
8. CONTRIBUTION. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Initial Purchasers
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from persons, other than the Initial Purchasers, who may also be
liable for contribution, including persons who control the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) as incurred to which the Company and one or more of the Initial Purchasers
may be subject, in such proportions as are appropriate to reflect the relative
benefits received by the Company and the Initial Purchasers from the offering of
the Notes or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7 hereof, in such proportions as
are appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company and the Initial Purchasers in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Initial Purchasers
shall be deemed to be in the same proportion as (x) the total proceeds from the
offering (net of initial purchaser discounts and commissions but before
deducting expenses) received by the Company and (y) the initial purchaser
discounts and commissions received by the respective Initial Purchasers,
respectively, in each case as set forth on the cover page of the Offering
Memorandum. The relative fault of the Company and of the Initial Purchasers
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 the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 8, no Initial Purchaser shall be required to contribute any amount
in excess of the amount by which the discounts and commissions applicable to the
Notes purchased by the Initial Purchasers pursuant to this Agreement exceeds the
amount of any damages that the Initial Purchasers have otherwise been required
to pay by reason of any 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
21
such fraudulent misrepresentation. For purposes of this Section 8, each person,
if any, who controls an Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such Initial Purchaser, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as the Company.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 8 or otherwise. The obligations of the Initial
Purchasers to contribute pursuant to this Section 8 are several in proportion to
the respective number of Notes purchased by each of the Initial Purchasers
hereunder and not joint.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations of the
Initial Purchasers to purchase and pay for the Firm Notes and the Optional
Notes, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company contained in this Agreement, as of
the date hereof and as of the Closing Date (for purposes of this Section 9,
"Closing Date" shall refer to the Closing Date for the Firm Notes and any
Additional Closing Date for the Optional Notes), to the absence from any
certificates, opinions, written statements or letters furnished to the Initial
Purchasers or to the counsel for the Initial Purchasers pursuant to this Section
9 of any misstatement or omission, to the performance by the Company of its
obligations hereunder and to each of the following additional terms and
conditions:
(a) The Offering Memorandum shall have been printed and copies distributed
to the Initial Purchasers not later than 10:00 a.m., New York City time, on
November 20, 2002 or at such later date and time as to which Bear, Xxxxxxx & Co.
Inc. on behalf of the Initial Purchasers may agree, and no stop order suspending
the qualification or exemption from qualification of the Notes in any
jurisdiction shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
(b) At the Closing Date, the Initial Purchasers shall have received a
certificate of the chief executive officer and chief financial officer of the
Company, dated the Closing Date, to the effect that (i) as of the date hereof
and as of the Closing Date the representations and warranties of the Company set
forth in Section 6 hereof are accurate, (ii) as of the Closing Date all
agreements, conditions and obligations of the Company to be performed or
complied with hereunder on or prior thereto have been duly performed or complied
with, (iii) except (A) as disclosed in the Offering Memorandum and (B) for such
losses or interferences as would not result, individually or in the aggregate,
in a Material Adverse Effect, the Company and the Subsidiaries have not
sustained any material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or governmental
proceeding, (iv) subsequent to the respective dates as of which information is
given in the Offering Memorandum there has not been any Material Adverse Change
or change in the share capital or Ordinary Shares of the Company or any of the
Subsidiaries, except in each case as described in or contemplated by the
22
Offering Memorandum and (v) the Company does not engage in a material amount of
business in any U.S. state other than those listed on Schedule IV hereto.
(c) The Initial Purchasers shall have received on the Closing Date an
opinion of (i) LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., United States counsel for
the Company, (ii) Xxxxxx and Calder, Cayman Islands counsel for the Company, and
(iii) Xxxx Xxxxxxx, Esq., General Counsel of the Company, each dated the Closing
Date and addressed to the Initial Purchasers in the forms attached hereto as
Annexes I, II and III, respectively.
(d) At the time this Agreement is executed and at the Closing Date, the
Initial Purchasers shall have received a comfort letter from Ernst & Young LLP,
independent public accountants for the Company and World-Wide Holdings Limited,
dated, respectively, as of the date of this Agreement and as of the Closing Date
addressed to the Initial Purchasers and in form and substance satisfactory to
the Initial Purchasers and Initial Purchasers' counsel.
(e) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers, of
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Initial Purchasers, covering such
matters as are customarily covered in such opinions.
(f) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 9 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained.
(g) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchasers such further information, certificates and documents as the
Initial Purchasers may reasonably request.
(h) The Indenture shall have been duly executed and delivered by the
Company and the Trustee, and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(i) The Company and the Initial Purchasers shall have executed and
delivered the Registration Rights Agreement (in form and substance satisfactory
to the Initial Purchasers) and the Registration Rights Agreement shall be in
full force and effect.
(j) On or after the date hereof, (i) none of the Company's Insurance
Subsidiaries shall have been downgraded by any of the Rating Agencies nor put on
credit watch with negative implications (or similar action) by any of the Rating
Agencies or (ii) no Rating Agency shall have given notice that it has assigned
(or is considering assigning) a lower rating to the Notes than that on which the
Notes were marketed.
(k) At the Closing Date, the Notes shall have been designated for trading
in the PORTAL market.
23
(l) You shall have received a lock-up agreement from each person who is a
director or officer of the Company and each shareholder and warrantholder as
shall have been heretofore designated by the Initial Purchasers and listed on
Schedule II hereto substantially in the form attached hereto as Annex IV.
(m) The Initial Purchasers shall have also received from the Company, a
letter from Ernst & Young LLP addressed to the Company stating that the
Company's system of internal accounting controls taken as a whole is sufficient
to meet the broad objectives of internal accounting control insofar as those
objectives pertain to the prevention or detection of errors or irregularities in
amounts that would be material in relation to the financial statements of the
Company and the Subsidiaries.
If any of the conditions specified in this Section 9 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the Initial
Purchasers or to the Initial Purchasers' counsel pursuant to this Section 9
shall not be in all material respects reasonably satisfactory in form and
substance to the Initial Purchasers and to the Initial Purchasers' counsel, all
obligations of the Initial Purchasers hereunder may be cancelled by the Initial
Purchasers at, or at any time prior to, the Closing Date and the obligations of
the Initial Purchasers to purchase the Optional Notes may be cancelled by the
Initial Purchasers at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile. Any such telephone or facsimile notice shall be
confirmed promptly thereafter in writing.
10. INITIAL PURCHASERS' INFORMATION. Each of the Company and the Initial
Purchasers acknowledges that the only information furnished to the Company in
writing by or on behalf of the Initial Purchasers expressly for use in the
Offering Memorandum consists of the statements in the Offering Memorandum set
forth in the table of the first paragraph and the third, fifth, tenth, eleventh
and twelfth paragraphs of the section captioned "Plan of Distribution."
11. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations and
warranties, covenants and agreements of the Initial Purchasers and the Company
contained in this Agreement, including the agreements contained in Section
12(d), the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Initial
Purchasers, any controlling person thereof, or by or on behalf of the Company,
or any controlling person thereof, and shall survive delivery of and payment for
the Notes to and by the Initial Purchasers. The representations contained in
Section 6 and the agreements contained in Sections 7, 8 and 12(d) shall survive
the termination of this Agreement, including any termination pursuant to Section
12.
12. EFFECTIVE DATE OF AGREEMENT: TERMINATION. (a) This Agreement shall
become effective upon execution and delivery of a counterpart hereof by each of
the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date or to terminate the obligations
of the Initial Purchasers to purchase the Optional Notes at any time prior to
the Additional Closing Date, as the case may be, if (A) any
24
domestic or international event or act or occurrence has materially disrupted,
or in the opinion of the Initial Purchasers will in the immediate future
materially disrupt, the market for the Company's securities or securities in
general; or (B) trading on the NYSE, the Nasdaq Stock Market (the "Nasdaq") or
the American Stock Exchange shall have been suspended, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required, on the NYSE, the Nasdaq or the American
Stock Exchange by the NYSE, the Nasdaq or the American Stock Exchange or by
order of the Commission or any other governmental authority having jurisdiction;
or (C) a banking moratorium has been declared by any state or federal authority
or if any material disruption in commercial banking or securities settlement or
clearance services shall have occurred; or (D) any downgrading shall have
occurred in the Company's corporate credit rating or the rating accorded the
Company's debt securities by any "nationally recognized statistical rating
organization" as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act or if any such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities; or
(E) (i) there shall have occurred any outbreak or escalation of hostilities or
acts of terrorism involving the United States or there is a declaration of a
national emergency or war by the United States or (ii) there shall have been any
other calamity or crisis or any change in political, financial or economic
conditions if the effect of any such event in (A) or (E) in the judgment of the
Initial Purchasers makes it impracticable or inadvisable to proceed with the
offering, sale and delivery of the Firm Notes or the Optional Notes, as the case
may be, on the terms and in the manner contemplated by the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 12 shall be by
telephone or facsimile and, in either case, confirmed in writing by letter.
(d) If the sale of the Notes provided for herein is not consummated
because any condition to the obligations of the Initial Purchasers set forth
herein is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any provision
hereof, the Company shall reimburse the Initial Purchasers for all out-of-pocket
expenses (including the reasonable fees and expenses of the Initial Purchasers'
counsel), incurred by the Initial Purchasers in connection herewith. If this
Agreement shall be terminated pursuant to Section 12(b) hereof, each party shall
be responsible for its own expenses.
13. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS. If one or more of the
Initial Purchasers shall fail to purchase the Firm Notes on the Closing Date, or
the Optional Notes on any Additional Closing Date, that it or they are obligated
to purchase under this Agreement (the "Defaulted Securities"), Bear, Xxxxxxx &
Co. Inc. shall have the right, within 24 hours thereafter, to make arrangements
for one or more of the non-defaulting Initial Purchasers, or any other initial
purchasers, to purchase all, but not less than all, of the Defaulted Securities
in such amounts as may be agreed upon and upon the terms herein set forth; if,
however, Bear, Xxxxxxx & Co. Inc. has not completed such arrangements within
such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of
the aggregate principal amount of the Firm Notes or Optional Notes, as
the case may be, each of the non-defaulting Initial Purchasers shall
be obligated, severally and
25
not jointly, to purchase the full amount thereof in the proportions
that its respective purchase obligations hereunder bear to the
purchase obligations of all non-defaulting Initial Purchasers, or
(ii) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Firm Notes or Optional Notes, as the
case may be, this Agreement shall terminate without liability on the
part of any non-defaulting Initial Purchaser.
Nothing contained in this Agreement shall relieve any defaulting Initial
Purchaser or Initial Purchasers from its or their liability, if any, to the
other Initial Purchasers and the Company for damages occasioned by its or their
default hereunder.
In the event of any such default that does not result in a termination of
this Agreement, either Bear, Xxxxxxx & Co. Inc. or the Company shall have the
right to postpone the Closing Date (or Additional Closing Date, as the case may
be) for a period not exceeding seven days in order to effect any required
changes in the Offering Memorandum or in any other documents or arrangements. As
used herein, the term "Initial Purchaser" includes any person substituted for an
Initial Purchaser under this Section 13.
14. NOTICES. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Finance Department
Telecopy number: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopy number: (000) 000-0000
and, if sent to the Company, shall be mailed, delivered, telecopied and
confirmed in writing or sent by a nationally recognized overnight courier
service guaranteeing delivery on the next business day to:
FOR MAILING:
Scottish Annuity & Life Holdings, Ltd.
X.X. Xxx XX 0000
00
Xxxxxxxx XX XX
XXXXXXX
Xxxx: Xxxx Xxxxxxx, Esq.
or
FOR DELIVERY:
Scottish Annuity & Life Holdings, Ltd.
Xxxxx Xxxxx, Xxxxx Xxxxx
0 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX 08
BERMUDA
Attention: Xxxx Xxxxxxx, Esq.
FOR TELECOPY:
Telecopy number: (000) 000-0000
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. XxXxxxxxx, Esq.
Telecopy number: (000) 000-0000
15. PARTIES. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Initial Purchasers and the Company and the controlling
persons, directors, officers and agents referred to in Sections 7 and 8, and
their respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons, and officers and directors and their
heirs and legal representatives, and it is not for the benefit of any other
person, firm or corporation. The term "successors and assigns" shall not include
a purchaser, in its capacity as such, of Notes from the Initial Purchasers.
16. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
17. SUBMISSION TO JURISDICTION AND SERVICE OF PROCESS. (a) The Company
hereto consents to the jurisdiction of and venue in Federal and state courts
located in the Borough of Manhattan, City and State of New York, over any suit,
action or proceeding with respect to this Agreement or any transaction
contemplated hereby (an "Action"). The Company irrevocably and unconditionally
waives any objection to the laying of venue of any Action in any Federal or
state court located in the Borough of Manhattan, City and State of New York, and
hereby further
27
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such Action brought in any such court has been brought in an
inconvenient forum. Nothing contained in the preceding sentences or elsewhere in
this Agreement will preclude any party from enforcing any judgment or order in
any jurisdiction where the other party owns any assets or property.
(b) The Company agrees that service of all writs, process and summonses in
any suit, action or proceeding brought in connection with this Agreement against
the Company in any court of the State of New York or any United States Federal
court, in each case, sitting in the Borough of Manhattan, City and State of New
York, may be made upon CT Corporation System at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, whom the Company irrevocably appoints as its authorized agent for
service of process. The Company represents and warrants that CT Corporation
System has agreed to act as the Company's agent for service of process. The
Company agrees that such appointment shall be irrevocable until the irrevocable
appointment by the Company of a successor in The City of New York as its
authorized agent for such purpose and the acceptance of such appointment by such
successor. The Company further agrees to take any and all action, including the
filing of any and all documents and instruments that may be necessary to
continue such appointment in full force and effect as aforesaid. If CT
Corporation System shall cease to act as the agent for service of process for
the Company, the Company shall appoint without delay, another such agent and
provide prompt written notice to Bear, Xxxxxxx & Co. Inc. of such appointment.
18. HEADINGS. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be delivered by facsimile and shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
20. TIME IS OF THE ESSENCE. Time shall be of the essence of this Agreement.
As used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
[Signature page to follow.]
28
If the foregoing correctly sets forth the understanding among the Initial
Purchasers and the Company please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
Accepted and agreed to as of
the date first above written:
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxxx Parish
--------------------------------
Name: Xxxxxxx Parish
Title: Senior Managing Director
XXXXXX XXXXXX SECURITIES INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
SCHEDULE I
NAME OF INITIAL PURCHASER PRINCIPAL AMOUNT OF
FIRM NOTES
TO BE PURCHASED
Bear, Xxxxxxx & Co. Inc. ................................. $ 90,000,000
Xxxxxx Xxxxxx Securities Inc. ............................ 10,000,000
Total: ......................................... $ 100,000,000
=============
I-1
SCHEDULE II
NAMES OF OFFICERS AND DIRECTORS SUBJECT TO THE LOCK-UP PROVISION
Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
G. Xxxxxxx Xxxxxxxxx-Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Lord Xxxxxx Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. XxXxxxx, Xx.
J. Xxxx Xxxx
Xxxxxxxxx Xxxxxx
Xxxxx X. X'Xxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxx
Xxxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
XX-1
SCHEDULE III
LIST OF SUBSIDIARIES
Scottish Annuity & Life Insurance Company (Cayman) Ltd.
Scottish Annuity & Life Holdings (Bermuda) Limited
Scottish Annuity & Life Insurance Company (Bermuda) Limited
Scottish Annuity & Life International Insurance Company (Bermuda) Ltd.
Scottish Holdings (Barbados), Limited
Scottish Holdings (U.S.), Inc.
Scottish Re (U.S.), Inc.
Scottish Re Intermediaries (Canada) Limited
Scottish Re (Dublin) Limited
Scottish Solutions LLC
Tartan Wealth Management, Inc.
The Scottish Annuity Company (Cayman) Ltd.
World-Wide Holdings Limited
World-Wide Life Assurance S.A.
World-Wide Reassurance Company Limited
World-Wide Corporate Capital Limited
World-Wide Insurance PCC Limited
III-1
SCHEDULE IV
LIST OF U.S. STATES MATERIAL TO THE COMPANY
State of Alabama
State of California
State of Connecticut
State of Delaware
State of Georgia
State of Illinois
State of Indiana
State of Iowa
State of Louisiana
Commonwealth of Massachusetts
Sate of Michigan
State of Minnesota
State of Missouri
State of New York
State of North Carolina
State of Ohio
State of Oklahoma
Commonwealth of Pennsylvania
State of Texas
State of Vermont
Commonwealth of Xxxxxxxx
XX-1
ANNEX I
Form of Opinion of Company's US Counsel
(a) Scottish Re (U.S.), Inc., a Delaware corporation (the "Delaware
Subsidiary"), is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation with all requisite corporate power to
own its properties and conduct its business as described in the Offering
Memorandum.
(b) Assuming the due authorization, execution and delivery of the
Indenture by the Company and assuming the Indenture is the valid and legally
binding obligation of the Trustee, the Indenture constitutes a valid and legally
binding agreement of the Company enforceable against the Company in accordance
with its terms; and the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture that is qualified thereunder.
(c) Assuming the due authorization, execution and delivery of the Notes by
the Company, and assuming due authentication thereof by the Trustee and upon
payment and delivery in accordance with the terms of the
Purchase Agreement, the
Notes will be duly and validly issued and outstanding and will constitute valid
and legally binding obligations of the Company enforceable against the Company
in accordance with their terms and will be entitled to the benefits of the
Indenture.
(d) Assuming the due authorization, execution and delivery of the
Purchase
Agreement by the Company, and assuming the
Purchase Agreement is the valid and
legally binding obligation of the Initial Purchasers, the
Purchase Agreement
constitutes a valid and legally binding agreement of the Company.
(e) Assuming the due authorization, execution and delivery of the
Registration Rights Agreement by the Company, and assuming it is the valid and
legally binding obligation of the Initial Purchasers, the Registration Rights
Agreement constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, and except that
rights to indemnity and contribution thereunder may be limited by applicable law
and public policy.
(f) The Indenture, the Notes, the Registration Rights Agreement and the
Purchase Agreement each conforms in all material respects to the description
thereof contained in the Offering Memorandum.
(g) The execution, delivery and performance by the Company of each of the
Indenture, the Notes, the Registration Rights Agreement and the
Purchase
Agreement, the issuance and sale of the Notes, the compliance by the Company
with all provisions of the Indenture, the Notes, the Registration Rights
Agreement and the
Purchase Agreement, the issuance of the Conversion Shares and
the consummation of the transactions contemplated by the
Purchase Agreement do
not and will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or
A(I)-1
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any agreement or instrument that is expressed to be
governed by New York law and filed with the SEC.
(h) No consent, approval, authorization, order, registration, filing,
qualification, license or permit pursuant to U.S. Federal law, New York law, the
Delaware General Corporation Law or the Delaware Insurance Code with any U.S.
Federal, New York or Delaware court or any U.S. Federal, New York or Delaware
public, governmental or regulatory agency or body having jurisdiction over the
Company or any of the Subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance by the Company of
each of the Indenture, the Notes, the Registration Rights Agreement and the
Purchase Agreement, the issuance and sale of the Notes, the compliance by the
Company with all provisions of the Indenture, the Notes, the Registration Rights
Agreements and the Purchase Agreement, the issuance of the Conversion Shares and
the consummation of the transactions contemplated by the Purchase Agreement,
except for such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in
connection with the purchase and resale of the Notes by the Initial Purchasers
(as to which such counsel need express no opinion).
(i) The statements included in the Offering Memorandum under the captions
(A) "Risks Related to This Offering -- Our articles of association and
applicable insurance laws make it difficult to effect a change of control; a
large shareholder may have a significant influence over potential change in
control transactions", and (B) "Risks Related to This Offering -- Investors may
have difficulties in suing or enforcing judgments against us in the United
States," and incorporated by reference in the Offering Memorandum under the
caption "Business--Regulation" (other than statements appearing under the
subcaptions "Bermuda," "Cayman Islands," "Ireland," "United Kingdom" and "New
Jurisdictions"), insofar as such statements constitute a summary of U.S. Federal
or Delaware legal matters referred to therein relating to the Delaware General
Corporation Law or the Delaware Insurance Code, fairly present the information
called for with respect to such legal matters.
(j) The statements in the Offering Memorandum under the captions (A)
"Risks Related to Taxation--Certain tax risks may affect our business", (B)
"Risks Related to Taxation--We may be subject to U.S. federal income taxation",
(C) "Risks Related to Taxation--U.S. persons who own our ordinary shares may be
subject to U.S. federal income taxation on our undistributed earnings and may
recognize ordinary income upon disposition of our ordinary shares", (D) "Risks
Related to Taxation--U.S. tax-exempt organizations who own our ordinary shares
may recognize unrelated business taxable income", (E) "Risks Related to Taxation
--Change in U.S. tax laws may be retroactive and could subject us and/or U.S.
persons who own our ordinary shares to U.S. income taxation on our undistributed
earnings", (F) the first three paragraphs of "Certain Tax Considerations" and
(G) "Certain Tax Considerations--United States", insofar as such statements
constitute a summary of U.S. Federal tax law and regulations, fairly present the
information called for with respect to such legal matters.
(k) The Company is not, and after giving effect to the offering and sale
of the Notes and the application of the proceeds thereof as described in the
Offering Memorandum will not be, an "investment company" as such term is defined
in the Investment Company Act.
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(l) Assuming the accuracy of the representations, warranties and
agreements of the Company and the Initial Purchasers contained in the Purchase
Agreement, it is not necessary, in connection with the issuance and sale of the
Notes to the Initial Purchasers and the offer, resale and delivery of the Notes
by the Initial Purchasers in the manner contemplated by the Purchase Agreement
and the Offering Memorandum, to register the Notes under the Securities Act or
to qualify the Indenture under the Trust Indenture Act.
(m) To the best of such counsel's knowledge and other than as set forth in
the Offering Memorandum, there are no legal or governmental proceedings pending
with any U.S. Federal or any Delaware governmental agency or body acting
pursuant to the Delaware General Corporation Law or Delaware Insurance Code to
which the Company or any of the Subsidiaries is a party or of which any property
of the Company or any of the Subsidiaries is the subject which, if determined
adversely to the Company or any of the Subsidiaries, would individually or in
the aggregate have a Material Adverse Effect.
Such counsel shall also state that they have participated in conferences
with representatives of the Company and with representatives of their
independent accountants and counsel at which conferences the contents of the
Offering Memorandum and any amendment and supplement thereto, if applicable
(including the Incorporated Documents) and related matters were discussed and,
although such counsel assume no responsibility for the accuracy, completeness or
fairness of the Offering Memorandum or any amendment or supplement thereto, if
applicable (including the Incorporated Documents) (except as expressly provided
above), nothing has come to the attention of such counsel to cause such counsel
to believe that the Offering Memorandum or any amendment or supplement thereto,
if applicable (including the Incorporated Documents), as of its date or the
Closing Date, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than the financial statements and other financial information
contained or incorporated by reference therein, as to which such counsel need
express no belief).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Initial Purchasers and may make necessary assumptions as to
matters relating to Cayman Islands law.
The opinion of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P. described above shall
be rendered to the Initial Purchasers at the request of the Company and shall so
state therein.
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ANNEX II
Form of Opinion of Company's Cayman Islands Counsel
Xxxxxx & Calder shall have furnished to the Initial Purchasers their
written opinion, as counsel to the Company, addressed to the Initial Purchasers
and dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, substantially to the effect set forth below:
(a) The Company has been duly incorporated as an exempted company with
limited liability and is validly existing and in good standing under the laws of
the Cayman Islands.
(b) The issue of the Conversion Shares has been duly authorised by the
Company and the directors have passed a resolution to reserve for the issuance
of the Conversion Shares upon conversion of the Notes. The Conversion Shares are
not subject to pre-emptive rights of the existing Ordinary Shareholders. The
Conversion Shares, when issued and delivered upon conversion of the Notes in
accordance with the terms of the Indenture, will be duly and validly authorized
and issued, fully paid and non-assessable.
(c) The Company has the full right, power and authority under its
Memorandum and Articles of Association to enter into, execute, deliver and
perform its obligations under each of the Indenture, the Notes, the Registration
Rights Agreement and the Purchase Agreement and to issue the Notes and
Conversion Shares.
(d) The execution, delivery and performance by the Company of each of the
Indenture, the Notes, the Registration Rights Agreement and the Purchase
Agreement and the issue of the Notes and the Conversion Shares do not violate or
conflict with or result in a breach of any of the terms or provisions of the
Memorandum and Articles of Association of the Company or any law, public rule or
regulation or, to the best knowledge of such counsel, any publicly available
judgment, decree or order applicable to the Company in the Cayman Islands
currently in the Cayman Islands currently in force.
(e) The execution, delivery and performance of each of the Indenture, the
Notes, the Registration Rights Agreement and the Purchase Agreement has been
authorized by and on behalf of the Company; and each of the Indenture, the
Notes, the Registration Rights Agreement and the Purchase Agreement has been
duly and validly executed and, assuming each of the Indenture, the Notes, the
Registration Rights Agreement and the Purchase Agreement has been delivered on
behalf of the Company, each constitute the legal, valid and binding obligations
of the Company enforceable in accordance with its terms.
(f) No authorizations, consents, approvals, licenses, validations, orders,
registrations, filings, qualifications, permits or exemptions are required by
law from any governmental authorities or agencies or other official bodies in
the Cayman Islands in connection with (i) the execution, creation or delivery of
each of the Indenture, the Notes, the Registrations Rights Agreement or the
Purchase Agreement or the issue, sale and delivery of the Notes or the issue and
delivery of the Conversion Shares; (ii) subject to the payment of the
appropriate stamp duty, enforcement of the Purchase Agreement; or (iii) the
execution,
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delivery and performance by the Company of its obligations under each of the
Indenture, the Notes, the Registration Rights Agreement and the Purchase
Agreement.
(g) No taxes, fees or charges (other than stamp duty) are payable (either
by direct assessment or withholding) to the government or other taxing authority
in the Cayman Islands under the laws of the Cayman Islands in respect of: (i)
the execution or delivery of each of the Indenture, the Notes, the Registration
Rights Agreement and the Purchase Agreement; (ii) the enforcement of each of the
Indenture, the Notes, the Registration Rights Agreement and the Purchase
Agreement; (iii) the issuance of the Notes or the Conversion Shares; or (iv)
payments made under, or pursuant to, each of the Indenture, the Notes, the
Registration Rights Agreement and the Purchase Agreement. The Cayman Islands
currently have no form of income, corporate or capital gains tax and no estate
duty, inheritance tax or gift tax.
(h) None of the parties to the Indenture, the Notes, the Registration
Rights Agreement and the Purchase Agreement (other than the Company) will be
deemed to be resident, domiciled or carrying on business in the Cayman Islands
merely as a consequence of entering into the Indenture, the Notes, the
Registration Rights Agreement and the Purchase Agreement.
(i) The courts of the Cayman Islands will observe and give effect to the
choice of New York law as the governing law of the Indenture, the Notes, the
Registration Rights Agreement and the Purchase Agreement.
(j) At the date hereof, to the best of such counsel's knowledge and belief,
there are no claims or assessments which this firm is handling in respect of the
Company and, based solely on our inspection of the Register of Writs and Other
Originating process in the Grand Court of the Cayman Islands from 12th November,
1998, there were no actions, petitions or other legal proceedings pending
against the Company in the courts of the Cayman Islands as at close of business
in the Cayman Islands on November 21, 2002.
(k) Although there is no statutory enforcement in the Cayman Islands of
judgments obtained in New York, the courts of the Cayman Islands will recognize
a foreign judgment as the basis for a claim at common law in the Cayman Islands
provided such judgment (i) is given by a competent foreign court; (ii) imposes
on the judgment debtor a liability to pay a liquidated sum for which the
judgment has been given; (iii) is final; (iv) is not in respect of taxes, a fine
or a penalty; and (v) was not obtained in a manner and is not of a kind the
enforcement of which is contrary to the public policy of the Cayman Islands.
(l) It is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Indenture, the Notes, the Registration Rights
Agreement and the Purchase Agreement that any document be filed, notarized,
registered, recorded or enrolled with any governmental authority or agency or
any official body in the Cayman Islands.
(m) The authorized share capital of the Company is comprised of 100,000,000
Ordinary Shares and 50,000,000 preferred shares of US$0.01 par value each, as
set forth in the Offering Memorandum.
A(II)-2
(n) The statements made in the Offering Memorandum under the captions
"Offering Memorandum Summary", "Risk Factors", "Market Prices and Dividends",
"Capitalization" and "Certain Tax Considerations--Cayman Islands" are accurate
in so far as such statements are summaries of Cayman Islands law. The statements
made in the Company's Form 8-A filed with the Commission on January 16, 2002, in
so far as such statements purport to summarize certain provisions of the
Memorandum and Articles of Association and the Certificate of Association of the
Company in relation to the Ordinary Shares or insofar as such statements
constitute a summary of provisions of Cayman Islands law in relation to the
Ordinary Shares, provide a fair summary of such provisions or such Cayman
Islands legal matters.
(o) The submission by the Company in the Purchase Agreement to the
jurisdiction of any Federal or state court in the State of New York is legal,
valid and binding upon the Company. The appointment of CT Corporation System as
the Company's agent to receive service of process in any suit, action or
proceedings effected in the manner set forth in Section 17 of the Purchase
Agreement is a legal, valid and binding appointment.
(p) Assuming that the Company is entitled to do so as a matter of New York
law, such counsel is not aware of any Cayman Islands law which would prohibit
the Company from (i) waiving any objection to the laying of the venue in any
court in the State of New York, County of New York or (ii) agreeing not to make
any pleading or claim that any action, suit or proceeding commenced pursuant to
Section 17 of the Purchase Agreement in any Federal or state court in the State
of New York, County of New York has been brought in an inconvenient forum.
(q) Assuming that an Initial Purchaser does not otherwise carry on business
in the Cayman Islands, it is not necessary under the laws of the Cayman Islands
that an Initial Purchaser be authorized, licensed or qualified to carry on
business in the Cayman Islands for the purposes of the entry into, execution,
delivery, performance or enforcement of the Indenture, the Notes, the
Registration Rights Agreement and the Purchase Agreement.
(r) The Initial Purchasers will not become subject to any income, franchise
or other tax imposed by a governmental authority of the Cayman Islands solely by
reason of the execution, delivery and performance of the Indenture, the Notes,
the Registration Rights Agreement and the Purchase Agreement and, subject to
paragraph (g) above, the Indenture, the Notes, the Registration Rights Agreement
and the Purchase Agreement will not require the payment of any registration
charge or stamp or similar tax imposed by any governmental authority of the
Cayman Islands.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Initial Purchasers.
The opinion of Xxxxxx and Xxxxxx described above shall be rendered to the
Initial Purchasers at the request of the Company and shall so state therein.
A(II)-3
ANNEX III
Form of Opinion of the Company
General Counsel of the Company shall have furnished to the Initial
Purchasers his written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(a) Scottish Re (U.S.), Inc., a Delaware corporation ("Scottish Re (U.S.)")
has been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation with all requisite
power and other necessary authority to own its properties and conduct its
business as described in the Offering Memorandum.
(b) All the issued shares of Scottish Re (U.S.) have been duly and validly
authorized and issued and are fully paid and non-assessable.
(c) Each of the Indenture, the Notes, the Registration Rights Agreement and
the Purchase Agreement has been duly and validly authorized, executed and
delivered by the Company.
(d) To the best of such counsel's knowledge and other than as set forth in
the Offering Memorandum, there are no legal or governmental proceedings pending
with any U.S. Federal or any Delaware governmental agency or body acting
pursuant to the Delaware General Corporation Law or Delaware Insurance Code to
which the Company or any of the Subsidiaries is a party or of which any property
of the Company or any of the Subsidiaries is the subject which, if determined
adversely to the Company or any of the Subsidiaries, would individually or in
the aggregate have a Material Adverse Effect.
(e) The execution, delivery and performance by the Company of each of the
Indenture, the Notes, the Registration Rights Agreement and the Purchase
Agreement, the issuance and sale of the Notes, the compliance by the Company
with all provisions of each of the Indenture, the Notes, the Registration Rights
Agreement and the Purchase Agreement, the issuance of the Conversion Shares and
the consummation of the transactions contemplated by the Purchase Agreement do
not and will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its Subsidiaries pursuant to, any agreement or instrument
filed with the SEC.
(f) No consent, approval, authorization, order, registration, filing,
qualification, license or permit pursuant to the Delaware General Corporation
Law or the Delaware Insurance Code with any U.S. Federal or state court or any
U.S. Federal or state public, governmental or regulatory agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance by the Company of each of the Indenture, the Notes, the Registration
Rights Agreement, the issuance and sale of the Notes, the issuance of the
Conversion Shares and the compliance by the Company with the terms of each of
the Indenture, the Notes, the Registration Rights Agreement and the
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Purchase Agreement and the consummation of the transactions contemplated by the
Purchase Agreement, except for such consents, approvals, authorizations, orders
and registrations or qualifications as may be required under applicable state
securities laws in connection with the purchase and resale of the Notes by the
Initial Purchasers (as to which such counsel need express no opinion).
(g) Scottish Re (U.S.) holds such Insurance Licenses, certificates and
permits from governmental authorities which are necessary to the conduct of its
business as described in the Offering Memorandum; to the best knowledge of such
counsel, there is no pending or threatened action, suit, proceeding or
threatened action, suit, proceeding or investigation that could reasonably be
expected to result in the revocation, termination or suspension of any Insurance
License; and to the knowledge of such counsel, no Delaware insurance regulatory
agency or body has issued, or commenced any proceeding for the issuance of, any
order or decree impairing, restricting or prohibiting the payment of dividends
by Scottish Re (U.S.) to its parent.
Such counsel shall also state that he has participated in conferences with
representatives of the Company and with representatives of their independent
accountants and counsel at which conferences the contents of the Offering
Memorandum and any amendment and supplement thereto, if applicable (including
the Incorporated Documents) and related matters were discussed and, although
such counsel assumes no responsibility for the accuracy, completeness or
fairness of the Offering Memorandum or any amendment or supplement thereto, if
applicable (including the Incorporated Documents) (except as expressly provided
above), nothing has come to the attention of such counsel to cause such counsel
to believe that the Offering Memorandum or any amendment or supplement thereto,
if applicable (including the Incorporated Documents), as of its date or the
Closing Date, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than the financial statements and other financial information
contained or incorporated by reference therein, as to which such counsel need
express no belief).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Initial Purchasers.
The opinion of Xxxx Xxxxxxx, Esq. described above shall be rendered to the
Initial Purchasers at the request of the Company and shall so state therein.
A(III)-2
ANNEX IV
Form of Lock-Up Agreement
November 18, 2002
BEAR, XXXXXXX & CO. INC.
XXXXXX XXXXXX SECURITIES INC.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Debt Capital Markets
Re: SCOTTISH ANNUITY & LIFE HOLDINGS, LTD. LOCK-UP AGREEMENT
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed sale (the
"Sale") by Scottish Annuity & Life Holdings, Ltd., an exempted company limited
by shares organized and existing under the laws of the Cayman Islands (the
"Company"), of $100,000,000 principal amount of the Company's Senior Convertible
Notes due 2022 (the "Notes") to Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx").
In order to induce you to purchase the Notes, the undersigned hereby agrees
that, without the prior written consent of Bear Xxxxxxx, during the period from
the date hereof until ninety (90) days from the date of the final offering
memorandum for the Sale (the "Lock-Up Period"), the undersigned (a) will not,
directly or indirectly, offer, sell, agree to offer or sell, solicit offers to
purchase, grant any call option or purchase any put option with respect to,
pledge, borrow or otherwise dispose of any Relevant Security (as defined below),
(b) will not establish or increase any "put equivalent position" or liquidate or
decrease any "call equivalent position" with respect to any Relevant Security
(in each case within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder), or (c)
will not otherwise enter into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any of the economic
consequence of ownership of a Relevant Security, whether or not such transaction
is to be settled by delivery of Relevant Securities, other securities, cash or
other consideration. As used herein "Relevant Security" means the Company's
Ordinary Shares, par value US$.01 per share, any other equity security of the
Company or any of its Subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Ordinary Share or other such equity
security.
The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial
A(IV)-1
but not the record holder, agrees during the Lock-Up Period to cause the record
holder to cause the relevant transfer agent to decline to transfer, and to note
stop transfer restrictions on the stock register and other records relating to,
such Relevant Securities. The undersigned hereby further agrees that, without
the prior written consent of Bear Xxxxxxx, during the Lock-Up Period the
undersigned (x) will not file or participate in the filing with the Securities
and Exchange Commission of any registration statement, or circulate or
participate in the circulation of any preliminary or final prospectus or other
disclosure document with respect to any proposed offering or sale of a Relevant
Security and (y) will not exercise any rights the undersigned may have to
require registration with the Securities and Exchange Commission of any proposed
offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
[signature page follows]
A(IV)-2
This letter agreement shall be governed by and construed in accordance with
the laws of the State of New York. Delivery of a signed copy of this letter by
telecopier or facsimile transmission shall be effective as delivery of the
original hereof.
Very truly yours,
By:
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Print Name:
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