ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
COMMON SHARES
(PAR VALUE $0.03 PER SHARE)
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UNDERWRITING AGREEMENT
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July [__], 2006
Xxxxxxx, Xxxxx & Co.,
As Representative of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx Partners LLC
As the Qualified Independent Underwriter
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Allied World Assurance Company Holdings, Ltd, a company incorporated
under the laws of Bermuda (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 8,800,000 voting common
shares, par value $0.03 per share (the "Common Shares"), of the Company and, at
the election of the Underwriters, up to 1,320,000 additional Common Shares of
the Company. The aggregate of 8,800,000 Common Shares to be sold by the Company
is herein called the "Firm Shares" and the aggregate of 1,320,000 additional
shares to be sold by the Company is herein called the "Optional Shares." The
Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Shares".
The Company and the Underwriters, in accordance with the requirements
of Rule 2720 ("Rule 2720") of the NASD and subject to the terms and conditions
stated herein, also hereby confirm the engagement of the services of Xxxxxx
Xxxxxx Partners LLC (the "Independent Underwriter") as a "qualified independent
underwriter" within the meaning of Rule 2720(b)(15) in connection with the
offering and sale of the Shares.
As part of the offering contemplated by this Agreement, Citigroup
Global Markets Inc. has agreed to reserve out of the Shares set forth opposite
its name on Schedule I to this
Agreement, up to 5% of the Shares, for sale to the Company's employees,
officers, and directors and other parties associated with the Company
(collectively, "Participants"), as set forth in the Prospectus under the heading
"Underwriting" (the "Directed Share Program"). The Shares to be sold by
Citigroup Global Markets Inc. pursuant to the Directed Share Program (the
"Directed Shares") will be sold by Citigroup Global Markets Inc. pursuant to
this Agreement at the public offering price. Any Directed Shares not orally
confirmed for purchase by any Participants by 8:00 A.M. New York City time on
the business day following the date on which this Agreement is executed will be
offered to the public by Citigroup Global Markets Inc. as set forth in the
Prospectus.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters and the Independent Underwriter that:
(i) A registration statement on Form S-1 (File No. 333-132507)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to our
knowledge, threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations under
the Act, is hereinafter called a "Preliminary Prospectus"); the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 6(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective, each as amended at the time such part
of the Initial Registration Statement became effective or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statement"; the Preliminary Prospectus relating to the
Shares that was included in the Registration Statement immediately
prior to the Applicable Time (as defined in Section 1(a)(iii) hereof)
is hereinafter called the "Pricing Prospectus"; such final prospectus,
in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus"; and any "issuer free writing
prospectus" as defined in Rule 433 under the Act relating to the Shares
is hereinafter called an "Issuer Free Writing Prospectus";
(ii) No order preventing or suspending the use of any
Preliminary Prospectus or any Issuer Free Writing Prospectus has been
issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Sachs & Co. or by the Independent Underwriter
expressly for use therein;
(iii) For the purposes of this Agreement, the "Applicable
Time" is [ : m] (Eastern time) on [ ], 2006; the Pricing Prospectus as
supplemented by the Issuer Free Writing Prospectuses and other
documents listed in Schedule II(A) hereto, taken together
(collectively, the "Pricing Disclosure Package") as of the Applicable
Time, did not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and each Issuer Free Writing Prospectus listed on
Schedule II(A) or Schedule II(B) hereto does not conflict with the
information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus and each such Issuer Free Writing
Prospectus, as supplemented by and taken together with the Pricing
Disclosure Package as of the Applicable Time, did not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to
statements or omissions made in an Issuer Free Writing Prospectus in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. or by the
Independent Underwriter expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
and the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to each part of the Registration Statement and as of the applicable
filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Xxxxxxx,
Sachs & Co. or by the Independent Underwriter expressly for use
therein;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Pricing Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or
contemplated in each of the Pricing Prospectus and the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, there has not been
any change in the capital stock (other than pursuant to employee stock
option and incentive plans that are described in the Pricing Prospectus
and the Prospectus) or the capital or surplus or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in each of
the Pricing Prospectus and the Prospectus;
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(vi) The Company and its subsidiaries do not own any real
property; the Company and its subsidiaries have good and marketable
title to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are
described in each of the Pricing Prospectus and the Prospectus and
would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity, assets or results of
operations of the Company and its subsidiaries (a "Material Adverse
Effect"); and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect;
(vii) The Company has been duly incorporated and is validly
existing as a company in good standing under the laws of Bermuda, with
power and authority (corporate and other) to own its properties and
conduct its business as described in each of the Pricing Prospectus and
the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except to
the extent that the failure to be so qualified in any such jurisdiction
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
power and authority (corporate and other) to own its properties and
conduct its business as described in each of the Pricing Prospectus and
the Prospectus, and each subsidiary of the Company has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each jurisdiction in which it
owns or leases properties or conducts any business so as to require
such qualification, except to the extent that the failure to be so
qualified in any such jurisdiction would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(viii) The Company has an authorized capitalization as set
forth in each of the Pricing Prospectus and the Prospectus, and all of
the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform to the description of the share capital contained in the
Pricing Prospectus and Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims; except as described in the Pricing Prospectus under
the captions "Certain Relationships and Related Party Transactions" and
"Description of our Share Capital", the holders of outstanding shares
of the Company are not entitled to preemptive or other rights to
acquire the Shares; except as described in each of the Pricing
Prospectus and the Prospectus under the captions "Certain Relationships
and Related Party Transactions" and "Description of our Share Capital",
there are no outstanding securities convertible into or exchangeable
for, or warrants, rights or options to purchase from the Company, or
obligations of the Company to issue, the Shares or any other class of
shares of the Company; except as described in each of the Pricing
Prospectus and the Prospectus under the captions "Certain Relationships
and Related Party Transactions" and "Description of our Share Capital",
there are no restrictions on subsequent transfers of the Shares under
the laws of Bermuda or the United States;
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and except as described in each of the Pricing Prospectus and the
Prospectus under the captions "Certain Relationships and Related Party
Transactions" and "Description of our Share Capital", no party has the
right to require the Company to register securities;
(ix) The unissued Common Shares to be issued and sold by the
Company to the Underwriters have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued and fully paid and non-assessable and
will conform to the description of the share capital contained in each
of the Pricing Prospectus and the Prospectus;
(x) All consents, approvals, authorizations, orders,
registrations, clearances and qualifications of or with any court or
governmental agency or body or any stock exchange authorities
(hereinafter referred to as a "Governmental Agency") having
jurisdiction over the Company or any of its subsidiaries or any of
their properties (hereinafter referred to as "Governmental
Authorizations") required for the sale of the Shares hereunder and for
the execution and delivery by the Company of this Agreement to be duly
and validly authorized have been obtained or made and are in full force
and effect, except to the extent as such would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect;
(xi) The issue and sale of the Shares to be sold by the
Company and the compliance by the Company with this Agreement and the
consummation of the transactions herein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give rise to a right
of termination under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except to the extent as
such would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, nor will such action result
in any violation of the provisions of the bye-laws (including the
amended Bye-Laws of the Company (the "New Bye-Laws") which are
described in each of the Pricing Prospectus and the Prospectus as
becoming effective as of the First Time of Delivery, as hereinafter
defined) or memorandum of association or any other organizational
documents of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or Governmental Agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
Governmental Agency or body is required for the issue and sale of the
Shares, the effectiveness of the New Bye-Laws, or the consummation by
the Company of the transactions contemplated by this Agreement, except
(A) the registration under the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act") of the Shares, (B) such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky in connection with the
purchase and distribution of the Shares by the Underwriters, (C) the
filing of the Prospectus under the Bermuda Companies Act 1981 in
connection with the sale of the Shares and (D) such consents,
approvals, authorizations, registrations or qualifications as may be
required and have been obtained from the Bermuda Monetary Authority;
(xii) There is no contract, document or other agreement
required to be described in the Registration Statement, the Pricing
Prospectus or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required by
the Act. Each description of a contract, document or other agreement in
the Registration
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Statement, Pricing Prospectus and the Prospectus accurately reflects in
all material respects the terms of the underlying contract, document or
other agreement. Each contract, document or other agreement described
in the Registration Statement, Pricing Prospectus and Prospectus or
listed in the exhibits to the Registration Statement (such listed
contracts, documents and other agreements, collectively, the "Filed
Agreements") to which the Company or a subsidiary of the Company is a
party is in full force and effect and is valid and enforceable by and
against the Company or such subsidiary, as the case may be, in
accordance with its terms, except to the extent as such would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries, if a subsidiary is a party, nor to the Company's
knowledge, any other party, is in default in the observance or
performance of any term or obligation to be performed by it under any
Filed Agreement, and no event has occurred which with notice or lapse
of time or both would constitute such a default;
(xiii) Neither the Company nor any of its subsidiaries is in
violation of its bye-laws or memorandum of association or any other
organizational documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or to which it is bound
or to which any of the property of the Company or any of its
subsidiaries is subject, except for such defaults that would not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect; and, the New Bye-Laws will have been duly
authorized and adopted, and will be in effect, as of the First Time of
Delivery;
(xiv) No stamp or other issuance or transfer taxes or duties
and no capital gains, income, withholding or other taxes are payable by
or on behalf of the Underwriters to Bermuda or any political
subdivision or taxing authority thereof or therein in connection with
(A) the sale and delivery by the Company of the Shares to or for the
respective accounts of the Underwriters or (B) the sale and delivery
outside Bermuda by the Underwriters of the Shares to the initial
purchasers thereof; and no registration, documentary, recording,
transfer or other similar tax, fee or charge by any Bermuda government
authority is payable in connection with the execution, delivery,
filing, registration or performance of this Agreement;
(xv) Neither the Company nor any of its subsidiaries has
taken, directly or indirectly, any action which was designed to or
which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares;
(xvi) The statements set forth in each of the Pricing
Prospectus and Prospectus under the captions "Regulatory Matters",
"Principal Shareholders", "Certain Relationships and Related Party
Transactions", "Description of Our Share Capital", "Certain Tax
Considerations" and "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(xvii) Other than as set forth in each of the Pricing
Prospectus and the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and,
6
to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by any Governmental Agency or threatened by
others;
(xviii) The financial statements included in the Registration
Statement, the Pricing Prospectus and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its subsidiaries on a consolidated basis as of the
dates indicated and the results of operations, shareholders' equity and
cash flows of the Company and its subsidiaries on a combined basis for
the periods indicated. Such financial statements have been prepared in
conformity with generally accepted accounting principles in the United
States ("GAAP") applied on a consistent basis throughout the periods
involved. The financial statement schedules, if any, included in the
Registration Statement present fairly the information required to be
stated therein. The selected financial data included in the Pricing
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent in all material respects with that of
the audited financial statements included in the Registration
Statement, as the case may be; no other financial statements or
supporting schedules are required to be included in the Registration
Statement, the Pricing Prospectus or the Prospectus;
(xix) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof, will not be an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(xx) The Company has all requisite corporate power and
authority to enter into this Agreement and the Registration Rights
Agreement, dated [ ], 2006 (the "Registration Rights Agreement"), among
the Company and the shareholders named therein; and each of this
Agreement and the Registration Rights Agreement have been duly
authorized, and validly executed and delivered by the Company and the
Registration Rights Agreement constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. The Shareholders Agreement, dated November
21, 2001, including all amendments thereto, among the Company and the
shareholders named therein (the "Shareholders Agreement") will be
terminated on or prior to the First Time of Delivery;
(xxi) Each of the Company and its subsidiaries is a holding
company or is duly licensed as an insurer or reinsurer, as the case may
be, under the insurance laws (including laws that relate to companies
that control insurance companies) and the rules, regulations and
interpretations of the insurance regulatory authorities thereunder
(collectively, "Insurance Laws"), of each jurisdiction in which the
conduct of its business requires such licensing. Each of the Company
and its subsidiaries has made all required filings under applicable
holding company statutes or other Insurance Laws in each jurisdiction
where such filings are required. Each of the Company and its
subsidiaries has all other necessary authorizations, approvals, orders,
consents, certificates, permits, registrations, qualifications and
other concessions of and from all insurance regulatory authorities
necessary to conduct their respective businesses as described in each
of the Pricing Prospectus and the Prospectus and all of the foregoing
are in full force and effect; none of the Company or any of its
subsidiaries has received any notification from any insurance
regulatory authority or other governmental authority in the United
States, Bermuda, Ireland, the United Kingdom or elsewhere to the effect
that any additional authorization, approval, order, consent,
certificate, permit, registration, qualification or concession is
needed to be obtained by either the Company
7
or any of its subsidiaries; and no insurance regulatory authority has
issued any order or decree impairing, restricting or prohibiting the
payment of dividends by the Company or any of its subsidiaries;
(xxii) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, services marks and
trade names (collectively, the "Intellectual Property") necessary for
the Company and its subsidiaries to be able to conduct their respective
businesses as described in each of the Pricing Prospectus and the
Prospectus, except where the failure to own or possess or have the
right to use such Intellectual Property would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect, and none of the Company or its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing;
(xxiii) Except as could not reasonably be expected to result
in a Material Adverse Effect, each of the Company and its subsidiaries
has filed all statutory financial returns, reports, documents and other
information required to be filed pursuant to the applicable Insurance
Laws of the United States and the various states thereof, Bermuda,
Ireland, the United Kingdom and each other jurisdiction applicable
thereto, and has duly paid all taxes (including franchise taxes and
similar fees) it is required to have paid under the applicable
Insurance Laws of the United States and the various states thereof,
Bermuda, Ireland, the United Kingdom and each other jurisdiction
applicable thereto; and, except as could not reasonably be expected to
result in a Material Adverse Effect, each of the Company and its
subsidiaries maintains its books and records in accordance with, and is
otherwise in compliance with, the applicable Insurance Laws of the
United States and the various states thereof, Bermuda, Ireland, the
United Kingdom and each other jurisdiction applicable thereto;
(xxiv) Any tax returns required to be filed by the Company or
any of its subsidiaries in any jurisdiction have been filed, except
where the failure to file would not, individually or in the aggregate,
have a Material Adverse Effect, and any taxes, including any
withholding taxes, excise taxes, penalties and interest, assessments
and fees and other charges due or claimed to be due from such entities
have been paid, other than any of those being contested in good faith
and for which adequate reserves have been provided or any of those
currently payable without penalty or interest or those that could not
reasonably be expected to result in a Material Adverse Effect;
(xxv) Each of the Company, Allied World Assurance Company, Ltd
("AWAC") and Allied World Assurance Holdings (Ireland) Ltd ("Allied
Ireland") has received from the Bermuda Minister of Finance an
assurance under The Exempted Undertakings Tax Protection Act, 1966 of
Bermuda to the effect set forth in each of the Pricing Prospectus and
the Prospectus under the caption "Certain Tax Considerations" and
neither the Company, AWAC nor Allied Ireland have received any
notification to the effect (and is not otherwise aware) that such
assurance may be revoked or otherwise not honored by the Bermuda
government. There is no Bermuda income, corporation or profits tax,
withholding tax, capital gains tax, estate duty or inheritance tax
payable by the Company, any of its subsidiaries or any Underwriter,
except where such Underwriter is ordinarily resident in Bermuda or
resident in Bermuda for exchange control purposes;
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(xxvi) The Company and its subsidiaries have not taken, and
have no plan or intention to take, directly or indirectly, any action
that would or would be reasonably expected to cause or result in (A)
the Company and/or any of AWAC, Allied Ireland, Allied World Assurance
Company (Europe) Limited ("Allied Europe") and Allied World Assurance
Company (Reinsurance) Limited ("Allied Re" and, together with AWAC,
Allied Ireland and Allied Europe, "Non-U.S. Subsidiaries") being
treated as engaged in a trade or business within the United States for
purposes of the Internal Revenue Code of 1986, as amended (the "Code"),
(B) the Company and/or any Non-U.S. Subsidiary being treated as a
passive foreign investment company within the meaning of section 1297
of the Code, (C) the Company and/or any non-U.S. Subsidiary being
treated as a controlled foreign corporation within the meaning of
section 957 of the Code or (D) any shareholder of the Company having
"related party insurance income" inclusions for U.S. federal income tax
purposes as a result of being a shareholder of the Company;
(xxvii) There are no currency exchange control laws or
withholding taxes, in each case of Bermuda, Ireland or the United
Kingdom (or any political subdivision or taxing authority thereof),
that would be applicable to the payment of dividends (A) on the Shares
by the Company (other than as may apply to residents of Bermuda for
Bermuda exchange control purposes) or (B) by any of the Company's
subsidiaries to the Company. The Bermuda Monetary Authority has
designated the Company as nonresident for exchange control purposes and
has granted permission for the issue and subsequent transfer of the
Shares, subject to the condition that the Common Shares of the Company
shall be listed on the New York Stock Exchange (the "Exchange") or any
other appointed stock exchange. Such permission has not been revoked
and is in full force and effect, and the Company is not aware of any
proceedings planned or threatened for the revocation of such
permission. The Company is an "exempted company" under Bermuda law and
has not (A) acquired and does not hold any land in Bermuda, other than
that held by way of lease or tenancy for terms of not more than 50
years, without the express authorization of the Bermuda legislature,
(B) taken mortgages on land in Bermuda to secure an amount in excess of
$50,000, without the consent of the Bermuda Minister of Finance, (C)
acquired any bonds or debentures secured by any land in Bermuda (other
than certain types of Bermuda government securities), or (D) conducted
their business in a manner that is prohibited for "exempted companies"
under Bermuda law. The Company has not received notification from the
Bermuda Monetary Authority or any other Bermuda governmental authority
of proceedings relating to the modification or revocation of its
designation as nonresident for exchange control purposes, its
permission to issue and transfer the Shares, or its status as an
"exempted company";
(xxviii) The Company has validly and irrevocably submitted to
the non-exclusive jurisdiction of any United States federal or State
court in the Borough of Manhattan, the City of New York, State of New
York (a "New York Court") with respect to suits, actions or proceedings
brought by any Underwriter or by any person who controls such
Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act against the Company arising out of or in
connection with violations of United States federal securities laws
relating to offers and sales of the Shares, has validly and irrevocably
waived, to the fullest extent permitted by law, any objections that it
may now or hereafter have to the laying of venue of any such suit,
action or proceeding brought in any New York Court based on or arising
under this Agreement or any claims that any such suit, action or
proceeding brought in any New York Court has been brought in an
inconvenient forum, and has duly and irrevocably appointed CT
9
Corporation as its agent to receive service of process with respect to
actions arising out of or in connection with any such suit, action or
proceeding; and service of process effected in the manner set forth in
Section 17 of this Agreement will be effective under the laws of
Bermuda to confer personal jurisdiction over the Company;
(xxix) Deloitte & Touche, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xxx) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company on the one
hand, and any former or current director, officer, shareholder, broker,
customer or supplier of any of them, on the other hand, which is
required by the Act or the rules and regulations thereunder to be
described in the Registration Statement, the Pricing Prospectus and the
Prospectus which is not so described or is not described as required;
there are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company or any affiliate of the Company to or for
the benefit of any of the executive officers or directors of the
Company or any affiliate of the Company or any of their respective
family members;
(xxxi) The Company and its consolidated subsidiaries maintain
a system of internal control over financial reporting that is
sufficient to provide reasonable assurances that (A) material
transactions are executed in accordance with management's
authorization; (B) material transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(C) material access to assets is permitted only in accordance with
management's authorization; (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and (E)
material information relating to the Company and its consolidated
subsidiaries is promptly made known to the officers responsible for
establishing and maintaining the system of internal accounting
controls; the Company's internal control over financial reporting will
be effective in all material respects at the time required by the
Exchange Act and the Company is not aware of any material weakness in
its internal control over financial reporting;
(xxxii) The Company and its consolidated subsidiaries employ
disclosure controls and procedures that comply or will comply at the
time required by the Exchange Act in all material respects with the
requirements of the Exchange Act, such disclosure controls are designed
to ensure that, from and after the First Time of Delivery, information
required to be disclosed by the Company in the reports that it will
file or submit under the Exchange Act will be recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rules and forms, and will be accumulated and communicated
to the Company's management, including its principal executive officer
or officers and principal financial officer or officers, as appropriate
to allow timely decisions regarding disclosure; such disclosure
controls and procedures are effective to provide reasonable assurance
that information required to be disclosed by the Company in reports
filed or submitted by the Company under the Exchange Act is recorded,
processed, summarized and reported as specified in the Commission's
rules and forms;
(xxxiii) There are no transactions, arrangements and other
relationships between and/or among the Company, any of its affiliates
(as such term is defined in Rule 405
10
under the Act) and any unconsolidated entity, including, but not
limited to, any structural finance, special purpose or limited purpose
entity (each, an "Off Balance Sheet Transaction") that could reasonably
be expected to affect materially the Company's liquidity or the
availability of or requirements for its capital resources, including
those Off Balance Sheet Transactions described in the Commission's
Statement about Management's Discussion and Analysis of Financial
Conditions and Results of Operations (Release Nos. 33-8056; 34-45321;
FR-61), required to be described in the Prospectus which have not been
described as required; and
(xxxiv) At the time of filing the Initial Registration
Statement, the Company was not and is not an "ineligible issuer" as
defined under Rule 405 under the Act.
Furthermore, the Company represents and warrants to Citigroup Global
Markets Inc. that (i) the Registration Statement, the Prospectus, any
Preliminary Prospectus and any Issuer Free Writing Prospectuses comply, and any
further amendments or supplements thereto will comply, with any applicable laws
or regulations of foreign jurisdictions in which the Prospectus or any
Preliminary Prospectus and any Issuer Free Writing Prospectus, as amended or
supplemented, if applicable, are distributed in connection with the Directed
Share Program, and that (ii) no authorization, approval, consent, license,
order, registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is necessary
under the securities laws and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States. The Company has not
offered, or caused the Underwriters to offer, Shares to any person pursuant to
the Directed Share Program with the specific intent to unlawfully influence (i)
a customer or supplier of the Company to alter the customer's or supplier's
level or type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company or its
products.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per Share of $ [ ], the number of Firm Shares (to be adjusted
by you so as to eliminate fractional shares) determined by multiplying the
aggregate number of Firm Shares to be sold by the Company by a fraction, the
numerator of which is the aggregate number of Firm Shares to be purchased by
such Underwriter as set forth opposite the name of such Underwriter in Schedule
I hereto and the denominator of which is the aggregate number of Firm Shares to
be purchased by all of the Underwriters from the Company hereunder and (b) in
the event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company at the purchase price per Share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 1,320,000 Optional Shares, at the purchase price per Share
set forth in the paragraph above, for the sole purpose of covering sales of
shares in excess of the number of Firm Shares.
11
Any such election to purchase Optional Shares shall be made in proportion to the
number of Optional Shares to be sold by the Company. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 5 hereof) or, unless you and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of such
notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Company hereby confirms its engagement of the services of
the Independent Underwriter as, and the Independent Underwriter hereby confirms
its agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Rule 2720(b)(15) (a "QIU") with respect to
the offering and sale of the Shares.
(b) The Independent Underwriter hereby represents and warrants to, and
agrees with, the Company and the Underwriters that with respect to the offering
and sale of the Shares as described in the Prospectus:
(i) The Independent Underwriter constitutes a "qualified
independent underwriter" within the meaning of Rule 2720(b)(15);
(ii) The Independent Underwriter has participated in the
preparation of the Registration Statement, the Pricing Prospectus and
the Prospectus and has exercised the usual standards of "due diligence"
in respect thereto;
(iii) The Independent Underwriter has undertaken the legal
responsibilities and liabilities of an underwriter under the Act
specifically including those inherent in Section 11 thereof; and
(iv) Based upon (A) a review of the Company, including an
examination of the Registration Statement, information regarding the
earnings, assets, capital structure and growth rate of the Company and
other pertinent financial and statistical data, (B) inquiries of and
conferences with the management of the Company and its counsel and
independent public accountants regarding the business and operations of
the Company, (C) consideration of the industry in which the Company
competes, estimates of the business potential of the Company,
assessments of its management, the general condition of the securities
markets, market prices of the capital stock and debt securities of, and
financial and operating data concerning, companies believed by the
Independent Underwriter to be comparable to the Company and the demand
for securities of comparable companies similar to the Shares, and (D)
such other studies, analyses and investigations as the Independent
Underwriter has deemed appropriate, and assuming that the offering and
sale of the Shares is made as contemplated herein and in the
Prospectus, the Independent Underwriter recommends, as of the date of
the execution and delivery of this Agreement, that based on [ ], the
initial public offering price for each share be not more than $[ ].
(c) The Independent Underwriter hereby agrees with the Company and the
Underwriters that, as part of its services hereunder, in the event of any
amendment or supplement to the Prospectus, the Independent Underwriter will
render services as a "qualified
12
independent underwriter" within the meaning of Rule 2720(b)(15) with respect to
the offering and sale of the Shares as described in the Prospectus as so amended
or supplemented that are substantially the same as those services being rendered
with respect to the offering and sale of the Shares as described in the
Prospectus (including those described in subsection (b) above).
(d) The Company, the Underwriters and the Independent Underwriter agree
to comply in all material respects with all of the requirements of Rule 2720
applicable to them in connection with the offering and sale of the Shares. The
Company agrees to cooperate with the Underwriters and the Independent
Underwriter to enable the Underwriters to comply with Rule 2720 and the
Independent Underwriter to perform the services contemplated by this Agreement.
(e) As compensation for the services of the Independent Underwriter
hereunder, the Company agrees to pay the Independent Underwriter $10,000 at the
Time of Delivery. In addition, the Company agrees promptly to reimburse the
Independent Underwriter for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with this Agreement
and the services to be rendered hereunder.
5. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours'
notice to the Company shall be delivered by or on behalf of the Company to
Xxxxxxx, Sachs & Co., through the facilities of The Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of federal
(same-day) funds to the account specified by the Company and the Custodian to
Xxxxxxx, Xxxxx & Co. at least forty-eight hours in advance. The Company will
cause the certificates representing the Shares to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be 9:30 a.m., New York City time, on [ ], 2006 or such other time
and date as Xxxxxxx, Sachs & Co. and the Company may agree upon in writing and,
with respect to the Optional Shares, 9:30 a.m., New York time, on the date
specified by Xxxxxxx, Xxxxx & Co. in the written notice given by Xxxxxxx Sachs &
Co. of the Underwriters' election to purchase such Optional Shares, or such
other time and date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in
writing. Such time and date for delivery of the Firm Shares is herein called the
"First Time of Delivery", such time and date for delivery of the Optional
Shares, if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 9 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 9 hereof will be delivered at the offices of
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, XX
00000 (the "Closing Location"), and the Shares will be delivered at the
Designated Office all at such Time of Delivery. A meeting will be held at the
Closing Location at 2:00 p.m., New York City time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 5, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
13
6. The Company agrees with each of the Underwriters and with the
Independent Underwriter:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or the Prospectus
which shall be disapproved by you promptly after reasonable notice thereof; to
advise you and the Independent Underwriter, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any amendment or supplement to the Prospectus has
been filed and to furnish you and the Independent Underwriter copies thereof; to
file promptly all material required to be filed by the Company with the
Commission pursuant to Rule 433(d) under the Act; to advise you and the
Independent Underwriter, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or other prospectus in respect
of the Shares, of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or other
prospectus or suspending any such qualification, to promptly use its reasonable
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters and the Independent Underwriter with written and electronic
copies of the Prospectus in New York City in such quantities as you and the
Independent Underwriter may reasonably request, and, if the delivery of a
prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the
Act) is required at any time prior to the expiration of nine months after the
time of issue of the Prospectus in connection with the offering or sale of the
Shares and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and upon your request
to prepare and furnish without charge to each Underwriter and to any dealer in
securities as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) under the Act) in connection with sales of
any of the Shares at any time nine months or more after the
14
time of issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its shareholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus (the "Lock-Up
Period"), not to offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose, except as provided
hereunder, of any securities of the Company that are substantially similar to
the Shares, including but not limited to any options or warrants to purchase
Common Shares or any securities that are convertible into or exchangeable for,
or that represent the right to receive, Common Shares or any such substantially
similar securities (other than pursuant to employee stock option plans existing
on, or upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without the prior written
consent of Xxxxxxx, Xxxxx & Co.; provided, however, that if (1) during the last
17 days of the initial Lock-Up Period, the Company releases earnings results or
announces material news or a material event or (2) prior to the expiration of
the initial Lock-Up Period, the Company announces that it will release earnings
results during the 15-day period following the last day of the initial Lock-Up
Period, then in each case the Lock-Up Period will be automatically extended
until the expiration of the 18-day period beginning on the date of release of
the earnings results or the announcement of the material news or material event,
as applicable, unless Xxxxxxx, Sachs & Co. waives, in writing, such extension;
the Company will provide the representatives and any co-managers and each
shareholder subject to the Lock-Up Period pursuant to the lockup letters
described in Section 9(k) with prior notice of any such announcement that gives
rise to an extension of the Lock-up Period;
(f) To furnish to its shareholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and statements
of income, shareholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available to its shareholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail, other than such reports and financial
statements that are publicly available on the Commission's XXXXX system;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver to
you (A) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which any class of securities of the Company is listed, other than such
reports and financial statements that are publicly available on the Commission's
XXXXX system; and (B) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated
15
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Pricing Prospectus
under the caption "Use of Proceeds";
(i) Not to (and to cause its subsidiaries not to) take, directly or
indirectly, any action which is designed to or which constitutes or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company or facilitate the sale or resale or the
Shares;
(j) To use its reasonable best efforts to list, subject to notice of
issuance, the Shares on the Exchange;
(k) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;
(l) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
and
(m) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the "License"); provided, however, that the License
shall be used solely for the purpose described above, is granted without any fee
and may not be assigned or transferred.
7. (a) The Company represents and agrees that, without the prior
consent of Xxxxxxx, Xxxxx & Co., it has not made and will not make any offer
relating to the Shares that would constitute a "free writing prospectus" as
defined in Rule 405 under the Act; each Underwriter represents and agrees that,
without the prior consent of the Company and Xxxxxxx, Sachs & Co., it has not
made and will not make any offer relating to the Shares that would constitute a
free writing prospectus; any such free writing prospectus the use of which has
been consented to by the Company and Xxxxxxx, Xxxxx & Co. is listed on Schedule
II(A) or Schedule II(B) hereto;
(b) The Company and each Underwriter represent and agree that they have
not made any offer relating to the Shares that would constitute a "free writing
prospectus" as defined in Rule 405 under the Act, other than a free-writing
prospectus which has been provided to the Independent Underwriter. Any such free
writing prospectus the use of which has been consented to by the Company and
Xxxxxxx, Sachs & Co. is listed on Schedule II(A) or Schedule II(B) hereto;
(c) The Company has complied and will comply with the requirements of
Rule 433 under the Act applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission or retention where required and
legending; the Company represents that it has satisfied and agrees that it will
satisfy the conditions under Rule 433 under the Act to avoid a requirement to
file with the Commission any electronic road show;
16
(d) The Company agrees that if at any time following issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a result of which
such Issuer Free Writing Prospectus would conflict with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances then prevailing, not misleading, the Company will give prompt
notice thereof to Xxxxxxx, Xxxxx & Co. and, if requested by Xxxxxxx, Sachs &
Co., will prepare and furnish without charge to each Underwriter an Issuer Free
Writing Prospectus or other document which will correct such conflict, statement
or omission; provided, however, that this representation and warranty shall not
apply to any statements or omissions in an Issuer Free Writing Prospectus made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through Xxxxxxx, Xxxxx & Co. or by the Independent
Underwriter expressly for use therein.
8. (a) The Company covenants and agrees with the several Underwriters
and the Independent Underwriter that the Company will pay the following: (i) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing, reproduction and filing
of the Registration Statement, any Preliminary Prospectus, any Issuer Free
Writing Prospectus and the Prospectus and amendments and supplements thereto
including the expenses of any special audits and/or "cold comfort" letters
required by or incident to the performance of the accountants and the mailing
and delivering of copies thereof to the Underwriters, the Independent
Underwriter and dealers; (ii) the cost of printing or preparing any Agreement
among Underwriters, this Agreement, the Blue Sky Memorandum and any other
documents or agreements in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification
of the Shares for offering and sale under state securities laws as provided in
Section 6(b) hereof, including the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky surveys; (iv) all fees and expenses in connection with listing
the Shares on the Exchange; (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the NASD of the terms of the sale of the Shares; (vi) all
Commission and stock exchange registration and filing fees; (vii) the cost of
preparing stock certificates; (viii) the fees and expenses payable to the
Independent Underwriter; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 8. Except as provided in this Section 8, and
Sections 11 and 14 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale of
any of the Shares by them, and any advertising expenses connected with any
offers they may make.
(b) The Company agrees to pay (i) all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program, (ii)
all costs and expenses incurred by the Underwriters in connection with the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of copies of the Directed Share Program
material and (iii) all stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed Share Program.
Furthermore, the Company covenants with Citigroup Global Markets Inc.
that the Company will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
17
9. The respective obligations of the Underwriters and the Independent
Underwriter hereunder, as to the Shares to be delivered at each Time of
Delivery, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of such Time of Delivery, true and correct, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 6(a) hereof; all material required to be filed by the Company pursuant
to Rule 433(d) under the Act shall have been filed with the Commission within
the applicable time period prescribed for such filing by Rule 433 under the Act;
if the Company has elected to rely upon Rule 462(b) under the Act, the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; no stop order suspending or preventing the use of
the Prospectus or any Issuer Free Writing Prospectus shall have been initiated
or threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, shall have furnished to you such written opinion or opinions,
dated such Time of Delivery, in a form or forms acceptable to you, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to render such opinion or opinions;
(c) Xxxxxxx Xxxx & Xxxxxxxxx LLP, counsel for the Company, shall have
furnished to you their written opinion (a form of such opinion is attached as
Annex II(a) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) Assuming this Agreement has been duly authorized, executed
and delivered by the Company under Bermuda law, this Agreement has been
duly authorized, executed and delivered by the Company;
(ii) Each of Allied World Assurance Company (U.S.) Inc. ("AWAC
US") and Newmarket Underwriters Insurance Company ("Newmarket") has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to conduct its business as described in
the Prospectus;
(iii) All of the issued shares of capital stock of each of
AWAC US and Newmarket have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except for directors'
qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(iv) Under the laws of the State of New York relating to
submission to jurisdiction, pursuant to Section 17 of the Agreement,
(A) the Company has validly and irrevocably submitted to the
non-exclusive jurisdiction of any New York Court, and has validly and
irrevocably waived any objection to the venue of a proceeding in any
such court, and (B) the Company has validly and irrevocably appointed
the Authorized Agent (as defined herein) as its authorized agent for
the purpose and to the extent described in Section 17 hereof, and
service of process effected on such agent in the manner set forth in
Section 17
18
hereof will be effective to confer valid personal jurisdiction over the
Company assuming, in each of clauses (A) and (B), the due
authorization, execution and delivery of this Agreement by the
Underwriters and with respect to the Company, the validity of such
actions under Bermuda law;
(v) To counsel's knowledge and other than as set forth in each
of the Pricing Prospectus and the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries; and, to such counsel's knowledge, no such
proceedings are threatened or contemplated by any Governmental Agency
or threatened by others;
(vi) The issuance and sale of the Shares being delivered at
such Time of Delivery to be sold by the Company, and the compliance by
the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give rise to a right
of termination under, any of the Filed Agreements (except such as would
not individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect), or any statute or any order, rule or
regulation known to such counsel of any Governmental Agency of the
United States or the State of New York having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(vii) No Governmental Authorization of the United States or
the State of New York is required for the issuance and sale of the
Shares being delivered at such Time of Delivery to be sold by the
Company, or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act
of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities, Blue Sky or insurance securities laws in connection with
the purchase and distribution of the Shares by the Underwriters;
(viii) The statements set forth in each of the Pricing
Prospectus and the Prospectus under the captions "Regulatory
Matters--United States", insofar as they purport to describe the
provisions of the insurance laws referred to therein, are accurate,
complete and fair;
(ix) The statements set forth in each of the Pricing
Prospectus and the Prospectus under the captions "Principal
Shareholders", "Certain Relationships and Related Party Transactions,"
"Description of Our Share Capital", "Certain Tax
Considerations--Taxation of Our Non-U.S. Companies--United States",
"--U.S. Taxation of Our U.S. Subsidiaries", "--U.S. Taxation of
Holders" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate
and complete in all material respects;
(x) The Company is not an "investment company", as such term
is defined in the Investment Company Act; and
19
(xi) To such counsel's knowledge, the only agreements to which
the Company has agreed to register securities are in the Registration
Rights Agreement, as described in each of the Pricing Prospectus and
the Prospectus.
Such counsel shall also furnish to you its written opinion that the
Registration Statement, as of its effective date, and the Prospectus, as of the
date of the Prospectus, and any further amendments and supplements thereto, as
applicable, appeared on their face to be appropriately responsive in all
material respects to the requirements of the Act and the applicable rules and
regulations of the Commission thereunder. Further, although they do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, nothing that came to
such counsel's attention in the course of its review has caused such counsel to
believe (i) that, as of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules therein, as to which
such counsel need express no opinion), contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii) that
the Pricing Disclosure Package as of the Applicable Time (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion), contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (iii) that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), contained an untrue statement of
a material fact or omitted 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. Also, nothing that has come to such counsel's attention
has caused such counsel to believe, as of such Time of Delivery, the Prospectus
or any further amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), contains an untrue
statement of a material fact or omits 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. Such counsel shall state that they do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, except for
those made under the captions "Regulatory Matters -- United States", "Principal
Shareholders," "Certain Relationships and Related Party Transactions,"
"Description of Our Share Capital", "Certain Tax Considerations--Taxation of Our
Non-U.S. Companies--United States", "--U.S. Taxation of Our U.S. Subsidiaries",
"--U.S. Taxation of Holders" and "Underwriting" in the Prospectus insofar as
they relate to provisions of documents or of United States federal tax law
therein described.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States.
(d) Xxxxxxx Xxxx & Xxxxxxx, special Bermuda counsel for the Company
satisfactory to you, shall have furnished to you their written opinion (a form
of such opinion is attached as Annex II(b) hereto), dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) Each of the Company, Allied World Assurance Company, Ltd
("AWAC") and Allied World Assurance Holdings (Ireland) Ltd. ("AWAH
Ireland") (together "the Companies"), is duly incorporated and validly
existing as an exempted company with
20
limited liability under the laws of Bermuda in good standing (meaning
solely that the relevant company has not failed to make any required
filing with any Bermuda governmental authority or to pay any Bermuda
government fee or tax which would make it liable to be struck off the
Register of Companies and thereby cease to exist under the laws of
Bermuda). The Company possesses the capacity to xxx and be sued in its
own name under the laws of Bermuda;
(ii) The Company has the necessary corporate power and
authority to execute and file the Registration Statement under the
Securities Act, to enter into and perform its obligations under this
Agreement and to issue and sell the Shares pursuant to this Agreement.
The execution and filing under the Securities Act of the Registration
Statement by the Company and the execution and delivery of this
Agreement by the Company and the performance by the Company of its
obligations thereunder including the issuance and sale of the Shares
will not violate the memorandum of association or bye-laws of each of
the Company, AWAC and AWAH Ireland, nor any applicable law, regulation,
order or decree in Bermuda.
(iii) The Company has taken all corporate action required to
authorise (i) the execution, delivery and performance of this Agreement
and, as applicable, the issuance and transfer of the Shares and (ii)
the execution and filing of the Registration Statement with the
Commission under the Securities Act. This Agreement has been duly
executed and delivered by or on behalf of the Company and constitutes
the valid and binding obligations of the Company in accordance with the
terms thereof. The Registration Statement has been duly executed by or
on behalf of the Company;
(iv) Each of the Company, AWAC and AWAH Ireland, has the
necessary corporate power and authority and all permits, licences and
authorisations required by Bermuda law to conduct its business as
described under the caption "Business" in the Prospectus as being
conducted by that particular entity and to own, lease and operate its
properties as described under the caption "Business" in the Prospectus;
(v) No order, consent, approval, licence, authorisation or
validation of or exemption by any government or public body or
authority of Bermuda or any sub division thereof is required to
authorise or is required to be obtained by the Company or the
Underwriters to authorise or in connection with (i) the execution and
filing of the Registration Statement, (ii) the issue and sale of the
Shares by the Company pursuant to this Agreement, or (iii) the
execution, delivery, performance and enforcement of this Agreement
including the consummation by the Company of the transactions
contemplated by this Agreement, except such as have been duly obtained
in accordance with Bermuda law and which are in full force and effect;
(vi) It is not necessary or desirable to ensure the
enforceability in Bermuda of this Agreement that it be registered in
any register kept by, or filed with, any governmental authority or
regulatory body in Bermuda.
However, to the extent that this Agreement creates a charge over assets
of the Company, it may be desirable to ensure the priority in Bermuda
of the charge that it be registered in the Register of Charges in
accordance with Section 55 of the Companies Xxx 0000. On registration,
to the extent that Bermuda law governs the priority of a charge, such
charge will have priority in Bermuda over any unregistered charges, and
over any subsequently registered charges, in respect of the assets
which are the subject of the charge. A registration fee of $515 will be
payable in respect of the registration.
21
While there is no exhaustive definition of a charge under Bermuda law,
a charge includes any interest created in property by way of security
(including any mortgage, assignment, pledge, lien or hypothecation). As
this Agreement is governed by the laws of the State of New York
("Foreign Laws"), the question of whether it creates such an interest
in property would be determined under the Foreign Laws;
(vii) There are no Bermuda stamp duty, transfer or similar
taxes payable in respect of the issue and delivery of the Shares to the
Underwriters or any subsequent purchasers pursuant to this Agreement
and the Underwriters will not become subject to any income, franchise
or other tax imposed by a governmental authority of Bermuda solely by
reason of the execution, delivery and performance of this Agreement.
This Agreement is not subject to ad valorem stamp duty in Bermuda, and
no registration, documentary, recording, transfer or other similar tax,
fee or charge by any Bermuda government authority is payable in
connection with the execution, delivery, filing, registration or
performance of this Agreement;
(viii) There is no capital gains, income or other tax of
Bermuda imposed by withholding or otherwise on any payment to be made
to or by the Company pursuant to this Agreement. Under current Bermuda
law there is no Bermuda income tax, withholding tax, capital gains tax,
capital transfer tax, estate or inheritance tax, payable by holders of
Shares who are not resident in Bermuda (or are deemed not to be
resident in Bermuda for Bermuda exchange purposes);
(ix) The Underwriters will not be deemed to be resident,
domiciled or carrying on business in Bermuda by reason only of the
entry into, execution, delivery, performance and/or enforcement of this
Agreement. It is not necessary under the laws of Bermuda that the
Underwriters be authorized, licensed or qualified to carry on business
in Bermuda for the purposes of the entry into, execution, delivery,
performance or enforcement of this Agreement;
(x) Neither the Company, AWAC nor AWAH Ireland, is entitled to
any immunity under the laws of Bermuda, whether characterised as
sovereign immunity or otherwise, from any legal proceedings to enforce
this Agreement in respect of itself or its property;
(xi) Consummation of the transactions contemplated by this
Agreement, including but not limited to any actions taken pursuant to
the indemnification and contribution provisions set forth therein, will
not constitute unlawful financial assistance by the Company under
Bermuda law;
(xii) Based solely upon a review of the Company BMA letters,
the AWAC BMA letters and the AWAH Ireland BMA Letters, the Companies
have been designated as non-resident of Bermuda for the purposes of the
Xxxxxxx Xxxxxxxx Xxxxxxx Xxx 0000 and as such are free to acquire,
hold, transfer and sell foreign currency and securities without
restriction under such legislation (including the payment of dividends,
interests, premiums or additional amounts or other distributions which
may be lawfully made by the Companies under the Companies Xxx 0000 and
the Insurance Act 1978);
(xiii) The statements contained in the Prospectus under the
captions "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital
Resources--Restrictions and Specific Requirements", "Regulatory
Matters--Bermuda", "Description of Our Share Capital", "Certain Tax
Considerations--Taxation of Our Companies--Bermuda", "--Bermuda
Taxation of
22
Holders", "Risk Factors--Risks Related to this Offering and Ownership
of Our Common Shares--Our Bye-Laws contain restrictions on ownership,
voting and transfers of our common shares" and "--There are regulatory
limitations on the ownership and transfer of our common shares" insofar
as they purport to describe the provisions of the laws of Bermuda
referred to therein, are accurate in all material respects. The
statements contained in the Registration Statement, in item 14 ("Part
II - Information not required in Prospectus - Indemnification of
Directors and Officers"), insofar as they purport to describe the
provisions of the laws of Bermuda referred to therein, are accurate in
all material respects;
(xiv) The choice of the Foreign Laws as the governing law of
this Agreement is a valid choice of law and would be recognised and
given effect to in any action brought before a court of competent
jurisdiction in Bermuda, except for those laws (i) which such court
considers to be procedural in nature, (ii) which are revenue or penal
laws or (iii) the application of which would be inconsistent with
public policy, as such term is interpreted under the laws of Bermuda.
The submission by the Company to the non-exclusive jurisdiction of the
New York Courts, the waiver by the Company of any objection related to
inconvenient forum and the appointment by the Company of an agent for
service of process, in each case pursuant to this Agreement, is valid
and binding upon the Company;
(xv) The courts of Bermuda would recognise as a valid
judgment, a final and conclusive judgment in personam obtained in the
New York Courts against the Company based upon this Agreement under
which a sum of money is payable (other than a sum of money payable in
respect of multiple damages, taxes or other charges of a like nature or
in respect of a fine or other penalty) and would give a judgment based
thereon provided that (a) such courts had proper jurisdiction over the
parties subject to such judgment, (b) such courts did not contravene
the rules of natural justice of Bermuda, (c) such judgment was not
obtained by fraud, (d) the enforcement of the judgment would not be
contrary to the public policy of Bermuda, (e) no new admissible
evidence relevant to the action is submitted prior to the rendering of
the judgment by the courts of Bermuda and (f) there is due compliance
with the correct procedures under the laws of Bermuda;
(xvi) There is no income or other tax of Bermuda imposed by
withholding or otherwise on any dividend or distribution to be made by
(i) the Company to the holders of the Common Shares; and (ii) AWAC to
the Company as holder of all of the common shares in AWAC. Each of the
Companies has received an assurance from the Minister of Finance under
the Exempted Undertakings Tax Protection Xxx 0000 that in the event of
there being enacted in Bermuda any legislation imposing tax on profits
or income or computed on any capital asset, gain or appreciation, or
any tax in the nature of estate duty or inheritance tax, then the
imposition of any such tax shall not be applicable to the Companies or
any of their operations or their shares, debentures or other
obligations until March 28, 2016 (subject to the proviso expressed in
such assurance as described in the Prospectus).;
(xvii) Based solely upon a review of the AWAC insurance
licence and AWAC's memorandum of association, AWAC is duly registered
in Bermuda as a class 4 insurer in accordance with the provisions of
the Insurance Xxx 0000;
23
(xviii) Based solely upon a review of the memorandum of
association and the bye-laws of the Company and the Register of Members
of the Company as at July [ ], 2006:
(A) the authorised share capital of the Company
established under its memorandum of association is
US$10,000,000, divided into 1,000,000,000 shares of par value
US$0.01 each;
(B) there are issued and outstanding 41,865,019
voting common shares and 108,623,581 non-voting common shares
of the Company, all of which are duly authorised, validly
issued, fully paid and non-assessable and such shares are not
subject to any statutory pre-emptive or similar statutory
rights of general application under Bermuda law;
(xix) Based solely upon a review of the Pricing Committee
Minutes, effective immediately prior to first trading on the New York
Stock Exchange, the Company's authorised and issued share capital shall
be consolidated such that every three common shares of par value
US$0.01 each shall be consolidated into one common share of par value
US$0.03 each.
(xx) When the Shares to be sold by the Company are duly issued
and paid for in accordance with this Agreement, such Shares will be
duly authorised, validly issued, fully paid and non-assessable and will
not be subject to any statutory pre-emptive or similar statutory rights
of general application under Bermuda law;
(xxi) Based solely upon a review of the memorandum of
association and the bye-laws of AWAC and the Register of Members of
AWAC as at July [ ], 2006:
(A) the authorised share capital of AWAC established
under its memorandum of association is US$1,000,000, divided
into 1,000,000 common shares of par value US$1.00 each;
(B) there are issued and outstanding 1,000,000 common
shares (each having a par value of US$1.00) of AWAC, all of
which are duly authorised, validly issued, fully-paid and
non-assessable; and
(C) the Company is the registered holder of the said
issued and outstanding common shares of AWAC and there are no
other classes of AWAC shares issued and outstanding other than
the aforementioned common shares in AWAC;
(xxii) Based solely upon a review of the memorandum of
association and the bye-laws of AWAH Ireland and the Register of
Members of AWAH Ireland as at July [ ], 2006:
(A) the authorised share capital of AWAH Ireland
established under its memorandum of association is US$12,000,
divided into 12,000 common shares of par value US$1.00 each;
(B) there are issued and outstanding 12,000 common
shares (each having a par value of US$1.00) of AWAH Ireland,
all of which are duly authorised, validly issued, fully-paid
and non-assessable; and
(C) the Company is the registered holder of the said
issued and outstanding common shares of AWAH Ireland and there
are no other classes of AWAH Ireland shares issued and
outstanding other than the aforementioned common shares in
AWAH Ireland;
24
(xxiii) The form of the certificate for the Shares complies
with the requirements of Bermuda law;
(xxiv) Based solely upon a search of the Cause Book of the
Supreme Court of Bermuda conducted at [ ] a.m. on July [ ], 2006 (which
would not reveal details of proceedings which have been filed but not
actually entered in the Cause Book at the time of our search), there
are no judgments against the Companies nor any legal or governmental
proceedings pending in Bermuda to which the Companies are subject;
(xxv) Based solely upon a search of the public records in
respect of the Companies maintained at the offices of the Registrar of
Companies at [ ] a.m. on July [ ], 2006 (which would not reveal whether
a winding-up petition or application to the Court for the appointment
of a receiver has been presented) and a search of the Cause Book of the
Supreme Court of Bermuda conducted at [ ] a.m. on July [ ], 2006 (which
would not reveal details of proceedings which have been filed but not
actually entered in the Cause Book at the time of our search), no steps
have been taken, or are being taken, in Bermuda for the appointment of
a receiver or liquidator to, or for the winding up, dissolution,
reconstruction or reorganization of, the Companies;
(xxvi) Based solely on a search of the Register of Charges
maintained by the Registrar of Companies pursuant to Section 55 of the
Companies Xxx 0000 conducted at [ ] a.m. on July [ ], 2006 (which would
not reveal details of matters which have been lodged for registration
but not actually registered at the time of our search), there are [no]
charges registered on the assets of the Companies;
(xxvii) Each of the Underwriters has standing to bring an
action or proceedings before the appropriate courts in Bermuda for the
enforcement of this Agreement. It is not necessary or advisable in
order for any of the Underwriters to enforce their respective rights
under this Agreement, including the exercise of remedies thereunder,
that it be licensed, qualified or otherwise entitled to carry on
business in Bermuda;
(xxviii) Subject to the requirement that shares of the Company
are listed on the New York Stock Exchange or on another appointed stock
exchange (as defined in section 2(1) of the Companies Act 1981), the
Company has received permission under the Exchange Control Act 1972
(and the Regulations made thereunder) from the Bermuda Monetary
Authority for: (i) the issue and subsequent transfer of the Company's
shares, up to the amount of its authorised capital from time to time,
to persons resident and non-resident of Bermuda for exchange control
purposes; (ii) the issue and subsequent free transferability of
options, warrants, depository receipts, rights and other securities of
the Company; and (iii) the issue and subsequent free transferability of
loan notes and other debt instruments and options, warrants, receipts,
rights over loan notes and other debt instruments of the Company to
persons resident and non-resident of Bermuda for exchange control
purposes;
(xxix) The procedure for the service of process on the Company
through C.T. Corporation in New York, New York, United States of
America, acting as agent for the Company, as set out in section 17 of
this Agreement, would be effective, in so far as Bermuda law is
concerned, to constitute valid service of the proceedings on the
Company;
25
(xxx) Based solely on our review of the bye-laws of the
Company and the Company Register, and except as disclosed in the
Prospectus under the captions "Certain Relationships and Related Party
Transactions", "Description of Our Share Capital", "Management" and
"Underwriting", the Company has no (i) outstanding securities or other
obligations convertible into or exchangeable or exercisable for shares
in the authorised share capital of the Company, or (ii) outstanding
rights to subscribe for or purchase, or options for the purchase of, or
agreement providing for the issuance (contingent or otherwise) of, or
calls, commitments or claims of any character relating to, any shares
in the authorised share capital of the Company, or (iii) securities
convertible into or exchangeable or exercisable for any shares in the
authorised share capital of the Company, or (iv) obligation (in the
nature of the existence of a pre-emptive or similar right) to offer the
shares in the authorised share capital of the Company any shareholder
of the Company prior to the sale of the Shares.
In giving such opinion, such counsel may state that with respect to all
matters of United States federal and New York state law they have relied upon
the opinions of United States counsel for the Company delivered pursuant to
paragraph (c) of this Section 9.
(e) Xxxxxx X. Xxxxxx, General Counsel for the Company, shall have
furnished to you his written opinion in form and substance satisfactory to you,
to the effect set forth in Annex II(c) hereto, dated such Time of Delivery.
26
(f) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of
27
Delivery, Deloitte & Touche shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto;
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Pricing Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Pricing Prospectus, and (ii) since the
respective dates as of which information is given in the Pricing Prospectus
there shall not have been any change in the capital stock, capital or surplus or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Pricing Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Representative so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(h) On or after the Applicable Time (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or the Company's
financial strength or claims paying ability by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or the
Company's financial strength or claims paying ability; provided that, any such
downgrading, surveillance or review which was publicly announced before the
Applicable Time shall be excepted;
(i) On or after the Applicable Time there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange; (ii) a suspension or material limitation
in trading in the Company's securities on the Exchange; (iii) a general
moratorium on commercial banking activities in New York, London or Bermuda
declared by the relevant authorities, or a material disruption in commercial
banking or securities settlement or clearance services in the United States,
Ireland, the United Kingdom or Bermuda; (iv) a change or development involving a
prospective change in United States or Bermuda taxation affecting the Company,
the Shares or the transfer thereof (v) the outbreak or escalation of hostilities
involving the United States, the United Kingdom or Bermuda or the declaration by
the United States, the United Kingdom or Bermuda of a national emergency or war
or (vi) the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions or currency exchange rates or
controls in the United States, the United Kingdom, Bermuda or elsewhere, if the
effect of any such event specified in clause (v) or (vi) in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(j) The Shares to be issued and sold by the Company at such Time of
Delivery shall have been duly listed, subject to notice of issuance, on the
Exchange;
(k) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from each of the Company's directors and executive
officers and American International Group, Inc., The Chubb Corporation, the
Xxxxxxx Xxxxx Funds (as defined in the
28
Registration Statement) and Securitas Allied Holdings, Ltd. substantially to the
effect set forth in Annex II hereto, in form and substance satisfactory to you;
(l) The Company shall have complied with the provisions of Section 6(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(m) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of its obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request, and the
Company shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (i) of this Section 9, and as to such
other matters as you may reasonably request.
10. The Independent Underwriter hereby consents to the references to it
as set forth under the caption "Underwriting" in the Pricing Prospectus and the
Prospectus and to the same references in any amendment or supplement thereto
made in accordance with Section 6(a) hereof.
11. (a) The Company will indemnify and hold harmless each Underwriter
and the Independent Underwriter against any losses, claims, damages or
liabilities to which such Underwriter or the Independent Underwriter, as the
case may be, may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, any Issuer Free Writing Prospectus or any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Act, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter or the
Independent Underwriter, as the case may be, for any legal or other expenses
reasonably incurred by such Underwriter or the Independent Underwriter, as the
case may be, in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, or any Issuer Free Writing Prospectus,
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Sachs & Co. or through the
Independent Underwriter expressly for use therein or constitutes a reference to
the Independent Underwriter consented to it pursuant to Section 10 hereof.
(b) The Company will indemnify and hold harmless the Independent
Underwriter, in its capacity as QIU, against any losses, claims, damages or
liabilities, joint or several, to which the Independent Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
act or omission to act or any alleged act or omission to act by the Independent
Underwriter as QIU in connection with any transaction contemplated by this
Agreement or undertaken in preparing for the purchase, sale and delivery of the
Shares, except to the extent that any such loss, claim, damage or liability
results from the gross negligence or bad faith of
29
the Independent Underwriter in performing the services as QIU, and will
reimburse the Independent Underwriter for any legal or other expenses reasonably
incurred by the Independent Underwriter in connection with investigating or
defending any such loss, claim, damage or liability, or any action in respect
thereof as such expenses are incurred.
(c) The Company will indemnify and hold harmless Citigroup Global
Markets Inc., the directors, officers, employees and agents of Citigroup Global
Markets Inc. and each person, who controls Citigroup Global Markets Inc. within
the meaning of either the Act or the Exchange Act ("Citigroup Entities"), from
and against any and all losses, claims, damages and liabilities to which they
may become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim), insofar as such losses,
claims damages or liabilities (or actions in respect thereof) (i) arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the prospectus wrapper material prepared by or with the
consent of the Company for distribution in foreign jurisdictions in connection
with the Directed Share Program attached to the Prospectus, any Preliminary
Prospectus or any Issuer Free Writing Prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement therein, when considered
in conjunction with the Prospectus or any applicable preliminary prospectus, not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of the securities which immediately following the effective date of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, except that this clause (iii) shall not apply to the
extent that such loss, claim, damage or liability is finally judicially
determined to have resulted primarily from the gross negligence or willful
misconduct of any of the Citigroup Entities.
(d) Each Underwriter will indemnify and hold harmless the Company and
the Independent Underwriter, as the case may be, against any losses, claims,
damages or liabilities to which the Company or the Independent Underwriter, as
the case may be, may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, or any amendment or supplement thereto, or any
Issuer Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx
& Co. expressly for use therein; and will reimburse the Company and the
Independent Underwriter, as the case may be, for any legal or other expenses
reasonably incurred by the Company or the Independent Underwriter, as the case
may be, in connection with investigating or defending any such action or claim
as such expenses are incurred.
(e) The Independent Underwriter will indemnify and hold harmless the
Company and each Underwriter, as the case may be, against any losses, claims,
damages or liabilities to which the Company or such Underwriter, as the case may
be, may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect
30
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus, the
Pricing Prospectus or the Prospectus or any such amendment or supplement
thereto, or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by the Independent
Underwriter expressly for use therein or constitutes a reference to the
Independent Underwriter consented to by it pursuant to Section 10 hereof; and
will reimburse the Company, or each Underwriter, as the case may be, for any
legal or other expenses reasonably incurred by the Company or each Underwriter,
as the case may be, in connection with investigating or defending any such
action or claim as such expenses are incurred.
(f) Promptly after receipt by an indemnified party under subsection
(a), (b), (c), (d) or (e) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(g) If the indemnification provided for in this Section 11 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b), (d) or (e) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by each party to the Agreement from the offering of
the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (f) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of each party to
31
the Agreement in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company, the Underwriters and the Independent Underwriter shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Company, the total underwriting discount and
commissions payable to the Underwriters as set forth in the table on the cover
page of the Prospectus and the fee payable to the Independent Underwriter
pursuant to the first sentence of Section 4(e) hereof, respectively, bear to the
sum of the total proceeds from the sale of the Shares (before deducting
expenses) in the offering and the fee payable to the Independent Underwriter
pursuant to the first sentence of Section 4(e) hereof. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or either the Underwriters or the Independent Underwriter on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Underwriters and
the Independent Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection (g) were determined by pro rata
allocation (even if the Underwriters and the Independent Underwriter were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (g). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (g) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (g), no Underwriter nor the
Independent Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public, and the Independent
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by the
Underwriters and distributed to the public were offered to the public, exceeds
the amount of any damages which such Underwriter or the Independent Underwriter,
as the case may be, have otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(g) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(h) The obligations of the Company under this Section 11 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter or the Independent Underwriter within the meaning of the Act and
each broker dealer affiliate of any Underwriter; and the obligations of the
Underwriters under this Section 11 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company, or the Independent Underwriter within the meaning of the
Act and the obligations of the Independent Underwriter under this Section 11
shall be in addition to any liability which the Independent Underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his or her
consent, is named in the
32
Registration Statement as about to become a director of the Company) and to each
person, if any, who controls the Company or any Underwriter within the meaning
of the Act.
(i) Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 11(d) hereof in respect of such
action or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local counsel)
for Citigroup Global Markets Inc., the directors, officers, employees and agents
of Citigroup Global Markets Inc., and all persons, if any, who control Citigroup
Global Markets Inc. within the meaning of either the Act or the Exchange Act for
the defense of any losses, claims, damages and liabilities arising out of the
Directed Share Program.
12. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies you that it
has so arranged for the purchase of such Shares, you or the Company shall have
the right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement, the Pricing Prospectus or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement, the Pricing Prospectus
or the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
of the Shares to be purchased at such Time of Delivery, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the number
of Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you, the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as
33
provided in Section 8 hereof and the indemnity and contribution agreements in
Section 11 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
13. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the several Underwriters and the
Independent Underwriter, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter, the Independent Underwriter or
any controlling person of any Underwriter, the Independent Underwriter or the
Company, or any officer or director or controlling person of the Company and
shall survive delivery of and payment for the Shares.
14. If this Agreement shall be terminated pursuant to Section 12
hereof, the Company shall not then be under any liability to any Underwriter or
the Independent Underwriter except as provided in Sections 8 and 11 hereof; but,
if any Shares are not delivered by or on behalf of the Company as provided
herein for any reason other than solely because of termination of this Agreement
pursuant to Section 12 hereof, the Company will reimburse the Underwriters and
the Independent Underwriter through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company shall then be under no
further liability to any Underwriter or the Independent Underwriter in respect
of the Shares not so delivered except as provided in the second sentence of
Section 4(e) hereof and Sections 8 and 11 hereof.
15. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; if to the Independent Underwriter shall be delivered or
sent by mail, letter or facsimile transmission to Xxxxxx Xxxxxx Partners LLC,
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000; and if to the
Company, or to any signatory to an agreement pursuant to Section 9(k) hereof,
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 11(f) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request; provided, however, that notices
under subsection 6(e) shall be in writing, and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to you or the
Representative at Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Control Room. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
16. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Independent Underwriter and the Company and,
to the extent provided in Sections 11 and 13 hereof, the officers and directors
of the Company and each person who controls the Company, the Independent
Underwriter or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
34
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
17. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding against the Company brought by any Underwriter, the
Independent Underwriter or by any person who controls any Underwriter or the
Independent Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act (a "Control Person") arising out of or based upon
this Agreement or the transactions contemplated hereby may be instituted in any
New York Court, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding, (iii) waives, to the fullest extent it may effectively do so, any
objection based on the absence of a necessary or indispensable party in any such
proceeding, and (iv) submits to the non-exclusive jurisdiction of such courts in
any such suit, action or proceeding. The Company irrevocably waives any immunity
to jurisdiction to which they may otherwise be entitled or become entitled
(including sovereign immunity, immunity to pre-judgment attachment,
post-judgment attachment and execution) in any legal suit, action or proceeding
against them arising out of or based on this Agreement or the transactions
contemplated hereby which is instituted in any New York Court or in any foreign
court. To the fullest extent permitted by law, the Company hereby waives any
objection to the enforcement by any competent foreign court of any judgment
validly obtained in any such proceeding. The Company designates and appoints CT
Corporation, New York, New York, as its authorized agent (the "Authorized
Agent") upon whom process may be served in any such action arising out of or
based on this Agreement or the transactions contemplated hereby which may be
instituted in any New York Court by any Underwriter or by any Control Person,
expressly consents to the jurisdiction of any such court in respect of any such
action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable. The
Company represents and warrants that the Authorized Agent has agreed to act as
such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.
The provisions of this Section 17 shall survive any termination of this
Agreement, in whole or in part.
35
18. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company will indemnify each Underwriter
and the Independent Underwriter against any loss incurred by such Underwriter
and the Independent Underwriter as a result of any variation as between (i) the
rate of exchange at which the United States dollar amount is converted into the
judgment currency for the purpose of such judgment or order and (ii) the rate of
exchange at which an Underwriter and the Independent Underwriter is able to
purchase United States dollars with the amount of the judgment currency actually
received by such Underwriter and the Independent Underwriter. The foregoing
indemnity shall constitute a separate and independent obligation of the Company
and shall continue in full force and effect notwithstanding any such judgment or
order as aforesaid. The term "rate of exchange" shall include any premiums and
costs of exchange payable in connection with the purchase of or conversion into
United States dollars.
19. 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.
20. The Company acknowledges and agrees that (i) the purchase and sale
of the Shares by it pursuant to this Agreement is an arm's-length commercial
transaction between the Company, on the one hand, and the several Underwriters,
on the other, (ii) in connection therewith and with the process leading to such
transaction each Underwriter is acting solely as a principal and not the agent
or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or
fiduciary responsibility in favor of the Company with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company on other matters)
or any other obligation to the Company except the obligations expressly set
forth in this Agreement and (iv) the Company has consulted its own legal and
financial advisors to the extent it deemed appropriate. The Company agrees that
it will not claim that the Underwriters or the Independent Underwriter, or any
of them, has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to the Company, in connection with such transaction or
the process leading thereto.
21. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of
them, with respect to the subject matter hereof.
22. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
23. The Company and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
24. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
25. Notwithstanding anything herein to the contrary, the Company is
authorized to disclose to any persons the U.S. federal and state income tax
treatment and tax structure of the potential transaction and all materials of
any kind (including tax opinions and other tax analyses) provided to the Company
relating to that treatment and structure, without the Underwriters imposing any
limitation of any kind. However, any information relating to the tax
36
treatment and tax structure shall remain confidential (and the foregoing
sentence shall not apply) to the extent necessary to enable any person to comply
with securities laws. For this purpose, "tax structure" is limited to any facts
that may be relevant to that treatment.
If the foregoing is in accordance with your understanding, please sign and
return to us 7 counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters and the Independent Underwriter, this letter
and such acceptance hereof shall constitute a binding agreement among each of
the Underwriters, the Independent Underwriter, the Company. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
Very truly yours,
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
By:
----------------------------------------
Name:
Title:
Accepted as of the date hereof at New York, New York.
XXXXXXX, SACHS & CO.
By:
----------------------------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
XXXXXX XXXXXX PARTNERS LLC
By:
----------------------------------------------------
Name:
Title:
37
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ------------------
Xxxxxxx, Sachs & Co.............................................
Citigroup Global Markets Inc....................................
X.X. Xxxxxx Securities Inc......................................
Xxxxxx Xxxxxx Partners LLC......................................
Banc of America Securities LLC..................................
Credit Suisse Securities (USA) LLC..............................
Xxx-Xxxx, Xxxxxx Incorporated...................................
Xxxxxx Brothers Inc.............................................
Wachovia Capital Markets, LLC...................................
ABN AMRO Rothschild LLC.........................................
Calyon Securities (USA) Inc.....................................
Xxxxxxx & Partners Securities, LLC..............................
HSBC Securities (USA) Inc.......................................
Xxxxx, Xxxxxxxx & Xxxxx, Inc....................................
The Xxxxxxxx Capital Group, L.P.................................
------------------ -----------------
Total............................................. 8,800,000 1,320,000
================== =================
38
SCHEDULE II (A)
Materials other than the Pricing Prospectus that comprise the Pricing Disclosure
Package:
39
SCHEDULE II (B)
Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package:
ANNEX I
FORM OF COMFORT LETTER(1)
Pursuant to Section 9(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as indicated in their reports thereon copies
of which have been separately furnished to the Representatives and on
the basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A)(i) below comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the four most recent fiscal years included in the
Prospectus agrees with the corresponding amounts in the audited
consolidated financial statements for such four fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform
----------
(1) The comfort letter to be delivered on the date of the Underwriting
Agreement shall refer to the Pricing Prospectus in lieu of the
Prospectus.
in all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or the capital or surplus or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or shareholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest
2
balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in clause (E) there were any
decreases in consolidated net revenues or operating profit or
the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus, or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
3
ANNEX II
LOCK-UP AGREEMENT
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD
July ___, 2006
Xxxxxxx, Xxxxx & Co.
As Representative of the several Underwriters
named in Schedule I to the Underwriting Agreement,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Allied World Assurance Company Holdings, Ltd -- Lock-Up
Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representative (the
"Representative"), propose to enter into an underwriting agreement (the
"Underwriting Agreement") on behalf of the several Underwriters named in
Schedule I to such agreement (collectively, the "Underwriters"), with Allied
World Assurance Company Holdings, Ltd, a Bermuda company (the "Company"),
providing for a public offering of common shares, par value $0.03 per share (the
"Common Shares"), of the Company pursuant to a Registration Statement on Form
S-1, as amended, filed with the Securities and Exchange Commission (the "SEC").
Capitalized terms used herein and not otherwise defined shall have the meaning
set forth in the Underwriting Agreement.
In consideration of the agreement by the Underwriters to offer and sell
the Shares, and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that,
without the prior written consent of Xxxxxxx, Xxxxx & Co., during the period
specified in the following paragraph (the "Lock-Up Period"), the undersigned
will not offer, sell, contract to sell, pledge, grant any option to purchase,
make any short sale or otherwise dispose of any Common Shares of the Company, or
any options or warrants to purchase any Common Shares of the Company, or any
securities convertible into, exchangeable for or that represent the right to
receive Common Shares of the Company, whether now owned or hereinafter acquired,
owned directly by the undersigned (including holding as a custodian) or with
respect to which the undersigned has beneficial ownership within the rules and
regulations of the SEC (collectively the "Undersigned's Shares"). The foregoing
restriction is expressly agreed to preclude the undersigned from engaging in any
hedging or other transaction which is designed to or which reasonably could be
expected to lead to or result in a sale or disposition of the Undersigned's
Shares even if such shares would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including
without limitation any put or call option) with respect to any of the
Undersigned's Shares or with respect to any security that includes, relates to,
or derives any significant part of its value from such shares.
The initial Lock-Up Period will commence on the date of this Lock-Up
Agreement and continue for 180 days after the public offering date set forth on
the final prospectus used to sell the Common Shares (the "Public Offering Date")
pursuant to the Underwriting Agreement; provided, however, that if (1) during
the last 17 days of the initial Lock-Up Period, the Company releases earnings
results or announces material news or a material event or (2) prior to the
expiration of the initial Lock-Up Period, the Company announces that it will
release earnings results during the 15-day period following the last day of the
initial Lock-Up Period, then in each case the Lock-Up Period will be
automatically extended until the expiration of the 18-day period beginning on
the date of release of the earnings results or the announcement of the material
news or material event, as applicable, unless Xxxxxxx, Xxxxx & Co. waives, in
writing, such extension.
The undersigned hereby acknowledges that the Company has agreed in the
Underwriting Agreement to provide written notice of any event that would result
in an extension of the Lock-Up Period pursuant to the previous paragraph to the
undersigned (in accordance with Section 15 of the Underwriting Agreement) and
agrees that any such notice properly delivered will be deemed to have been given
to, and received by, the undersigned. The undersigned hereby further agrees
that, prior to engaging in any transaction or taking any other action that is
subject to the terms of this Lock-Up Agreement during the period from the date
of this Lock-Up Agreement to and including the 34th day following the expiration
of the initial Lock-Up Period, it will give notice thereof to the Company and
will not consummate such transaction or take any such action unless it has
received written confirmation from the Company that the Lock-Up Period (as such
may have been extended pursuant to the previous paragraph) has expired.
Notwithstanding the foregoing, (1) the undersigned may transfer the
Undersigned's Shares (a) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (b) as a distribution to limited partners or stockholders of the
undersigned, provided that the limited partners or stockholders, as the case may
be, agree to be bound in writing by the restrictions set forth herein, (c) to
the undersigned's affiliates or to any investment fund or other entity
controlled or managed by the undersigned, provided that the affiliates or
investment funds or other entities controlled or managed by the undersigned, as
the case may be, agree to be bound in writing by the restrictions set forth
herein, or (d) to members of its immediate family, or to any trust for the
direct or indirect benefit of the undersigned or one or more of its immediate
family members, provided that such immediate family members (or trustee in the
case of a trust) agree to be bound in writing by the restrictions set forth
herein; (2) the undersigned may exercise securities convertible into Common
Shares, it being understood that any Common Shares acquired by the undersigned
in connection with such exercise or conversion shall be subject to this Lock-Up
Agreement; and (3) the undersigned may sell Common Shares purchased by the
undersigned on the open market following the public offering described herein;
provided that, in the case of any transfer or distribution pursuant to clauses
(1), (2) or (3) above, no filing by the undersigned or any other party (donor,
donee, transferor or transferee) under Section 16(a) of the Securities Exchange
Act of 1934 shall be required, or shall voluntarily be made, in connection with
such transfer or distribution (other than (i) a filing under Section 16(a) of
the Securities Exchange Act of 1934 which reports solely one or more
acquisitions of the Company's securities, or (ii) a filing on Form 5 made after
the expiration of the restricted period described in the foregoing paragraphs).
For purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption. The undersigned now has, and,
except as contemplated by clause (1), (2) or (3) above, for the duration of this
Lock-Up Agreement will have, good and valid title to the Undersigned's Shares,
free and clear of all liens,
2
encumbrances, and claims, except for any liens, encumbrances or claims that have
been created by the Underwriters.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Agreement.
Notwithstanding anything contained herein to the contrary, to the
extent that (i) at any time subsequent to the execution of this Lock-Up
Agreement the Undersigned is not required to make any filings under Section 16
or Sections 13(d) or (g) of the Securities Exchange Act of 1934 with respect to
any Common Shares, and (ii) the Undersigned has entered into or will enter into
an agreement similar to this Lock-Up Agreement (a) in connection with a bona
fide issuer directed share program relating to the underwritten public offering
of Common Shares (a "DSP Program") with respect to any Common Shares to be
purchased in such DSP Program (the "DSP Shares") and (b) with any member of the
underwriting syndicate or any affiliate of such member who is acting as
administrator of such DSP Program, the terms of such other similar lock-up
agreement and not of this Lock-Up Agreement shall govern the Undersigned's
rights with respect to such DSP Shares.
[FOR XXXXXXX SACHS FUNDS LOCK-UP AGREEMENT] [Notwithstanding anything
herein to the contrary, Xxxxxxx, Xxxxx & Co. and its affiliates (other than the
Undersigned) may engage in brokerage, investment advisory, financial advisory,
anti-raid advisory, merger advisory, financing, asset management, trading,
market making, arbitrage, principal investing and other similar activities
conducted in the ordinary course of their or their affiliates' business.]
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns, provided that this Lock-Up Agreement
will terminate and be null and void if the public offering date does not occur
within 60 days of the date hereof, or if the Underwriting Agreement (other than
the provisions that survive termination) shall terminate or be terminated prior
to payment for and delivery of the Common Shares to be sold thereunder.
This Lock-Up Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
--------------------------------------
Exact Name
--------------------------------------
Authorized Signature
--------------------------------------
Title
3
ANNEX II(a)
Form of Opinion of Xxxxxxx Xxxx & Xxxxxxxxx LLP
4
ANNEX II(b)
Form of Opinion of Xxxxxxx Xxxx & Xxxxxxx
5
ANNEX II(c)
Form of Opinion of Xxxxxx X. Xxxxxx
6
