EXHIBIT 1.2
_______________ SHARES
ODYSSEY RE HOLDINGS CORP.
[COMMON STOCK]
[PREFERRED STOCK]
UNDERWRITING AGREEMENT
DATED [___]
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TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES [OF THE COMPANY]...............................................3
[A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY]..............................................3
(a) Compliance with Registration Requirements............................................................3
(b) Offering Materials Furnished to Underwriters.........................................................3
(c) Distribution of Offering Material By the Company.....................................................4
(d) The Underwriting Agreement...........................................................................4
(e) Authorization of the Shares..........................................................................4
(f) No Applicable Registration or Other Similar Rights...................................................4
(g) No Material Adverse Change...........................................................................4
(h) Independent Accountants..............................................................................4
(i) Preparation of the Financial Statements..............................................................4
(j) Incorporation and Good Standing of the Company and its Subsidiaries..................................5
(k) Capitalization and Other Capital Stock Matters.......................................................5
(l) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required...........5
(m) No Material Actions or Proceedings...................................................................6
(n) Intellectual Property Rights.........................................................................6
(o) All Necessary Licenses...............................................................................7
(p) Title to Properties..................................................................................7
(q) Tax Law Compliance...................................................................................7
(r) Company Not an "Investment Company"..................................................................8
(s) Insurance............................................................................................8
(t) No Price Stabilization or Manipulation...............................................................8
(u) ERISA Compliance.....................................................................................8
(v) Exchange Act Compliance..............................................................................8
[B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS..................................9
(a) Accurate Disclosure..................................................................................9
(b) The Underwriting Agreement...........................................................................9
(c) Title to Shares to be Sold...........................................................................9
(d) Delivery of the Shares to be Sold....................................................................9
(e) Non-Contravention; No Further Authorizations or Approvals Required...................................9
(f) No Applicable Registration or Other Similar Rights..................................................10
(g) No Further Consents.................................................................................10
(h) Disclosure Made by Such Selling Stockholder in the Prospectus.......................................10
(i) No Price Stabilization or Manipulation..............................................................10
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES....................................................10
SECTION 3. COVENANTS[OF THE COMPANY]....................................................................14
[A. COVENANTS OF THE COMPANY]..................................................................14
(a) Representative's Review of Proposed Amendments and Supplements......................................14
(b) Securities Act Compliance...........................................................................14
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters.......................14
(d) Copies of any Amendments and Supplements to the Prospectus..........................................15
(e) Blue Sky Compliance.................................................................................15
(f) Use of Proceeds.....................................................................................15
(g) Transfer Agent......................................................................................15
(h) Earnings Statement..................................................................................15
(i) Periodic Reporting Obligations......................................................................15
(j) Exchange Act Compliance.............................................................................15
(k) Agreement Not to Offer or Sell Additional Securities................................................15
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(l) Future Reports to the Representative................................................................16
[B. COVENANTS OF THE SELLING STOCKHOLDERS......................................................16
(a) Agreement Not to Offer or Sell Additional Securities................................................16
(b) Delivery of Forms W-8 and W-9.......................................................................16
SECTION 4. PAYMENT OF EXPENSES..........................................................................17
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS............................................17
(a) Accountants' Comfort Letter.........................................................................17
(b) Compliance with Registration Requirements; No Stop Order; No Objection from NASD....................18
(c) No Material Adverse Change or Ratings Agency Change.................................................18
(d) Opinion of Counsel for the Company..................................................................18
(e) Opinion of General Counsel of the Company...........................................................19
(f) Opinion of Counsel for the Underwriters.............................................................19
(g) Officers' Certificate...............................................................................19
(h) Bring-down Comfort Letter...........................................................................19
(i) [Opinion of Counsel for the Selling Stockholders....................................................19
(j) Selling Stockholder's Officer's Certificate.........................................................19
(k) Selling Stockholder's Documents.....................................................................20
(l) Lock-Up Agreement from Certain Securityholders of the Company.......................................20
(m) Additional Documents................................................................................20
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES......................................................20
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT..............................................................20
SECTION 8. INDEMNIFICATION..............................................................................21
(a) Indemnification of the Underwriters by the Company..................................................21
(b) [Indemnification of the Underwriters by the Selling Stockholder.....................................22
(c) Indemnification of the Company[, the Selling Stockholder] and Certain Other Persons.................22
(d) Notifications and Other Indemnification Procedures..................................................23
(e) Settlements.........................................................................................24
SECTION 9. CONTRIBUTION.................................................................................24
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS..........................................25
SECTION 11. TERMINATION OF THIS AGREEMENT...............................................................26
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.........................................27
SECTION 13. NOTICES.....................................................................................27
SECTION 14. SUCCESSORS; THIRD PARTY BENEFICIARY.........................................................27
SECTION 15. PARTIAL UNENFORCEABILITY....................................................................28
SECTION 16. GOVERNING LAW PROVISIONS....................................................................28
SECTION 17. GENERAL PROVISIONS..........................................................................28
UNDERWRITING AGREEMENT
[Date]
[Name of Representative]
[Address of Representative]
[As Representative of the several Underwriters]
or
[Names of Representatives]
[As Representatives of the several Underwriters]
c/o [Address of Representative]
Ladies and Gentlemen:
INTRODUCTORY. Odyssey Re Holdings Corp. a Delaware corporation (the
"Company), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of [___] shares (the "Firm
Shares") of its [Common Stock, par value $0.01 per share (the "Common
Stock")] [preferred stock (the "Preferred Stock")]. In addition, the
Company has granted to the Underwriters an option to purchase up to an
additional [___] shares (the "Optional Shares") of [Common Stock]
[Preferred Stock], as provided in Section 2. The Firm Shares and, if and to
the extent such option is exercised, the Optional Shares are collectively
called the "Shares". [Name of Representative] [has] [and] [Name of
Representative] [have] agreed to act as representative[s] of the several
Underwriters (in such capacity, the "Representative[s]") in connection with
the offering and sale of the Shares.
[Introductory paragraph to be replaced with the following text if only Selling
Stockholders are offering the Shares:]
INTRODUCTORY. The stockholders of Odyssey Re Holdings Corp., a
Delaware corporation (the "Company), named in Schedule B (collectively, the
"Selling Stockholders") severally propose to sell to the underwriters named
in Schedule A (the "Underwriters") an aggregate of [___] shares (the "Firm
Shares") of Common Stock, par value $0.01 per share (the "Common Stock"),
of the Company. [In addition, the Selling Stockholders have severally
granted to the Underwriters an option to purchase up to an additional [___]
shares (the "Optional Shares") of Common Stock, as provided in Section 2,
each Selling Stockholder selling up to the amount set forth opposite such
Selling Stockholder's name in Schedule B] [In addition, [___], one of the
Selling Stockholders, has granted to the Underwriters an option to purchase
up to an additional [___] shares (the "Optional Shares") of Common Stock,
as provided in Section 2 .] The Firm Shares and, if and to the extent such
option is exercised, the Optional Shares are collectively called the
"Shares". [Name of Representative] [has] [and] [Names of Representative]
[have] agreed to act as representative[s] of the several Underwriters (in
such capacity, the "Representative[s]") in connection with the offering and
sale of the Shares.
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[Introductory paragraph to be replaced with the following text if the Company
and Selling Stockholders are offering the Shares:]
INTRODUCTORY. Odyssey Re Holdings Corp., a Delaware corporation (the
"Company), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of [___] shares of its [Common
Stock, par value $0.01 per share (the "Common Stock")] [preferred stock
(the "Preferred Stock)]; and the stockholders of the Company named in
Schedule B (collectively, the "Selling Stockholders") severally propose to
sell to the Underwriters an aggregate of [___] shares of Common Stock. The
[___] shares of [Common Stock] [Preferred Stock] to be sold by the Company
and the [___] shares of Common Stock to be sold by the Selling Stockholders
are collectively called the "Firm Shares". [In addition, the Company has
granted to the Underwriters an option to purchase up to an additional [___]
shares (the "Optional Shares") of [Common Stock] [Preferred Stock], as
provided in Section 2.] [In addition, the Selling Stockholders have
severally granted to the Underwriters an option to purchase up to an
additional [___] shares (the "Optional Shares") of Common Stock, as
provided in Section 2, each Selling Stockholder selling up to the amount
set forth opposite such Selling Stockholder's name in Schedule B.] [In
addition, the Company has granted to the Underwriters an option to purchase
up to an additional [___] shares of [Common Stock] [Preferred Stock] and
the Selling Stockholders have severally granted to the Underwriters an
option to purchase up to an additional [___] shares of Common Stock, each
Selling Stockholder selling up to the amount set forth opposite such
Selling Stockholder's name in Schedule B, all as provided in Section 2. The
additional [___] shares to be sold by the Company and the additional [___]
shares to be sold by the Selling Stockholders pursuant to such option are
collectively called the "Optional Shares".] The Firm Shares and, if and to
the extent such option is exercised, the Optional Shares are collectively
called the "Shares". [Name of Representative] [has] [Name of
Representative] [and] [Name of Representative] [have] agreed to act as
representative[s] of the several Underwriters (in such capacity, the
"Representative[s]") in connection with the offering and sale of the
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File
No. 333-[___]), which contains a form of prospectus to be used in
connection with the public offering and sale of the Shares. Such
registration statement, as amended, including the financial statements,
exhibits and schedules thereto, in the form in which it was declared
effective by the Commission under the Securities Act of 1933 and the rules
and regulations promulgated thereunder (collectively, the "Securities
Act"), including all documents incorporated or deemed to be incorporated by
reference therein and any information deemed to be a part thereof at the
time of effectiveness pursuant to Rule 430A or Rule 434 under the
Securities Act or the Securities Exchange Act of 1934 and the rules and
regulations thereunder (collectively, the "Exchange Act"), is called the
"Registration Statement". Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "Rule 462(b)
Registration Statement", and from and after the date and time of filing of
the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in
the form first used by the Underwriters to confirm sales of the Shares, is
called the "Prospectus". All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, the
Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System ("XXXXX"). All
references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
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Registration Statement or the Prospectus (and all other references or like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the Exchange Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The Company [and each of the Selling Stockholders] hereby confirm[s] its
[their respective] agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES [OF THE COMPANY].
[A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY]. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The Registration Statement
and any Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or, to
the best knowledge of the Company, are contemplated or threatened by the
Commission.
The Prospectus when filed complied in all material respects with the
Securities Act and, if filed by electronic transmission pursuant to XXXXX
(except as may be permitted by Regulation S-T under the Securities Act), was
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any post-effective
amendment thereto, at the time it became effective and at all subsequent times,
complied and will comply in all material respects with the Securities Act and
did not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus as amended or supplemented, as
of its date and at all subsequent times, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties set forth in
the two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
the Representative expressly for use therein. There are no contracts or other
documents required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement which have not been described or filed as
required.
(b) Offering Materials Furnished to Underwriters. The Company has delivered
to the Representative one complete signed copy of the Registration Statement and
of each consent and certificate of experts filed as a part thereof, and
conformed copies of the Registration Statement (without exhibits) and the
Prospectus, as amended or supplemented, in such
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quantities and at such places as the Representative has reasonably requested
for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Shares, any offering material in connection with the offering and sale of
the Shares other than a preliminary prospectus, the Prospectus or the
Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as to rights of indemnification
hereunder which may be limited by applicable law and except as to the
enforcement hereof which may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(e) Authorization of the Shares. The Shares to be purchased by the
Underwriters from the Company have been duly authorized for issuance and sale
pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set forth
herein, will be validly issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as have been
duly waived.
(g) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(h) Independent Accountants. [___], who have expressed their opinion with
respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) [and supporting schedules] filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as required
by the Securities Act and the Exchange Act.
(i) Preparation of the Financial Statements. The financial statements filed
with the Commission as a part of the Registration Statement and included in the
Prospectus present fairly the consolidated financial position of the Company and
its subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified.
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[The supporting schedules included as exhibits to the Registration Statement
present fairly the information required to be stated therein.] Such financial
statements [and supporting schedules] have been prepared in conformity with
generally accepted accounting principles as applied in the United States applied
on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial statements or
supporting schedules are required to be included in the Registration Statement.
The financial data set forth in the Prospectus under the captions [ ] fairly
present the information set forth therein on a basis consistent with that of the
financial statements contained in the Registration Statement.
(j) Incorporation and Good Standing of the Company and its Subsidiaries.
Each of the Company and its subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and, in the case of the Company, to enter into and perform its
obligations under this Agreement. Each of the Company and each subsidiary is
duly qualified as a foreign corporation to transact business and is in good
standing in the State of Delaware and each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions (other than
the State of Delaware) where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change. All of the issued and outstanding capital stock of each subsidiary has
been duly authorized and validly issued, is fully paid and nonassessable and is
owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim. The Company
does not control (as defined in Rule 405 under the Securities Act) any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21.1 to the Company's Annual Report on Form 10-K for the fiscal year
ended [___].
(k) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the Prospectus
under the caption "Capitalization" (other than for subsequent issuances, if any,
pursuant to employee benefit or incentive plans described in the Prospectus or
upon exercise of outstanding options [or warrants] described in the Prospectus).
The Common Stock (including the Shares) conforms in all material respects to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of Common Stock [(including the shares of Common Stock owned
by Selling Stockholders)] have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with federal and
state securities laws. None of the outstanding shares of Common Stock were
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. There are
no authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those described in the Prospectus.
The description of the Company's stock option, stock bonus and other employee
incentive plans or arrangements, and the options or other rights granted
thereunder, set forth in the Prospectus accurately and fairly presents in all
material respects the information required to be shown with respect to such
plans, arrangements, options and rights.
(l) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its certificate of incorporation or by-laws or is in default (or,
with the giving of notice or lapse of time, would
6
be in default) ("Default") under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an "Existing Instrument"), except for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby and by the
Prospectus (i) have been duly authorized by all necessary corporate action and
will not result in any violation of the provisions of the certificate of
incorporation or by-laws of the Company or any subsidiary, (ii) will not
conflict with or constitute a breach of, or Default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change and (iii)
will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any subsidiary,
except for any violations which would not, individually or in the aggregate,
result in a Material Adverse Change. No consent, approval, authorization or
other order of, or registration or filing with, any court or other governmental
or regulatory authority or agency, is required for the Company's execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been obtained or
made by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
(m) No Material Actions or Proceedings. [Except as otherwise disclosed in
the Prospectus,] There are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge, threatened (i)
against or, to the best of the Company's knowledge, affecting the Company or any
of its subsidiaries, (ii) which has as the subject thereof any officer or
director of, or property owned by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any such
case (A) such action, suit or proceeding could reasonably be expected to be
determined adversely to the Company or such subsidiary and (B) any such action,
suit or proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or would reasonably be expected to adversely
affect the consummation of the transactions contemplated by this Agreement.
[Except as otherwise disclosed in the Prospectus,] No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the best of
the Company's knowledge, is threatened or imminent, which might reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Change.
(n) Intellectual Property Rights. [Except as otherwise disclosed in the
Prospectus,] The Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights would not result
in a Material Adverse Change. Neither the Company nor any of its subsidiaries
has received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
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(o) All Necessary Licenses. Each of Odyssey America Reinsurance
Corporation, Odyssey Reinsurance Corporation, Xxxxxx Insurance Company and
Lloyd's Syndicate 1218 (each an "Insurance Subsidiary", collectively the
"Insurance Subsidiaries") is duly licensed to conduct an insurance or a
reinsurance business, as the case may be, under the insurance statutes of each
jurisdiction in which the conduct of its business requires such licensing,
except for such jurisdictions in which the failure of the Insurance Subsidiaries
to be so licensed would not, individually or in the aggregate, result in a
Material Adverse Change. The Insurance Subsidiaries have made all required
filings under applicable insurance statutes in each jurisdiction where such
filings are required, except for such jurisdictions in which the failure to make
such filings would not, individually or in the aggregate, result in a Material
Adverse Change. Each of the Insurance Subsidiaries has all other necessary
authorizations, approvals, orders, consents, certificates, permits,
registrations and qualifications of and from all insurance regulatory
authorities necessary to conduct their respective businesses as described in the
Prospectus, except where the failure to have such authorizations, approvals,
orders, consents, certificates, permits, registrations or qualifications would
not, individually or in the aggregate, result in a Material Adverse Change, and
the Company and each of its Insurance Subsidiaries has not received any
notification from any insurance regulatory authority to the effect that any
additional authorization, approval, order, consent, certificate, permit,
registration or qualification is needed to be obtained by the Company and each
of its Insurance Subsidiaries in any case where it could be reasonably expected
that (x) the Company and each of its Insurance Subsidiaries would be required
either to obtain such additional authorization, approval, order, consent,
certificate, permit, registration or qualification or to cease or otherwise
limit the writing of certain business and (y) the failure to obtain such
additional authorization, approval, order, consent, certificate, permit,
registration or qualification or the limiting of the writing of such business
would result in a Material Adverse Change; and no insurance regulatory authority
having jurisdiction over the Company or any of its Insurance Subsidiaries has
issued any order or decree impairing, restricting or prohibiting (i) the payment
of dividends by any of the Insurance Subsidiaries to its parent, other than
those restrictions applicable to insurance or reinsurance companies generally,
or (ii) the continuation of the business of the Company or any of the Insurance
Subsidiaries in all material respects as presently conducted.
(p) Title to Properties. Except as otherwise disclosed in the Prospectus,
the Company and each of its subsidiaries has good and marketable title to all
the properties and assets reflected as owned by each of them in the Prospectus,
in each case free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company or such subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or any subsidiary are held
under valid and enforceable leases, with such exceptions as do not result in a
Material Adverse Change.
(q) Tax Law Compliance. The Company and its consolidated subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns,
other than those which would not, individually or in the aggregate, result in a
Material Adverse Change, and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them, except assessments against which appeals have been
or will be promptly taken in good faith or as to which adequate reserves have
been provided. Adequate charges, accruals and reserves have been made in the
applicable financial statements referred to in Section 1(i) above in respect of
all federal, state
8
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its consolidated subsidiaries has not been
finally determined.
(r) Company Not an "Investment Company". The Company is not, and after
receipt of payment for the Shares will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(s) Insurance. The Company is insured as disclosed in the Prospectus under
the caption [ ]. Neither the Company nor any of its subsidiaries has been denied
any insurance coverage which it has sought or for which it has applied.
(t) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares.
(u) ERISA Compliance. The Company and its subsidiaries and any "employee
benefit plan" (within the meaning of the Employee Retirement Income Security Act
of 1974, as amended, and the regulations and published interpretations
thereunder ("ERISA")) established or maintained by the Company, its subsidiaries
and their "ERISA Affiliates" (as defined below) are in compliance with ERISA and
the Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code"), except such as will not, individually
or in the aggregate, result in a Material Adverse Change. "ERISA Affiliate"
means, with respect to the Company and a subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Code of which
the Company or such subsidiary is a member. No "reportable event" (as defined
under ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" for which the Company, its subsidiaries or any of their
ERISA Affiliates would have any liability, which might reasonably be expected
to, individually or in the aggregate, result in a Material Adverse Change. No
"employee benefit plan" for which the Company, its subsidiaries or any of their
ERISA Affiliates would have any liability, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as defined
under ERISA) which might reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change. Neither the Company, its
subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections
412, 4971, 4975 or 4980B of the Code, which might reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Change. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries and any of their ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification, which might reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change. No event or series of events of
the nature described in this Section 1(u) has occurred or is reasonably expected
to occur for which the Company, its subsidiaries or any of their ERISA
Affiliates would have any liability which might reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Change.
(v) Exchange Act Compliance. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of
9
the Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement and any amendments thereto
become effective and at the First Closing Date and the Second Closing Date, as
the case may be, will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
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.
Any certificate signed by an officer of the Company and delivered to the
Representative or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
[B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder represents, warrants and covenants to each Underwriter as
follows:
(a) Accurate Disclosure. To the best knowledge of the Selling Stockholder,
the representations and warranties of the Company contained in Section 1(A)
hereof are true and correct.
(b) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Selling
Stockholder, enforceable in accordance with its terms, except as to rights of
indemnification hereunder, which may be limited by applicable law, and except as
to the enforcement hereof, which may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(c) Title to Shares to be Sold. The Selling Stockholder has, and on the
First Closing Date and the Second Closing Date (as defined below) will have,
good and valid title to all of the Shares which may be sold by the Selling
Stockholder pursuant to this Agreement on such date and has full corporate power
to sell such Shares.
(d) Delivery of the Shares to be Sold. Delivery of the Shares sold by the
Selling Stockholder in accordance with the terms of this Agreement against
payment of the consideration set forth herein will result in the transfer of
good and valid title to such Shares to the Underwriters, assuming the
Underwriters do not have notice of any adverse claim, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or other claim.
(e) Non-Contravention; No Further Authorizations or Approvals Required. The
Selling Stockholder's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus (i)
have been duly authorized by all necessary corporate action and will not result
in any violation of the provisions of the organizational documents of the
Selling Stockholder, (ii) will not conflict with or constitute a breach of, or a
Default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Selling Stockholder, or require
the consent of any other party to, any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the
Selling Stockholder is a party or by which it is bound or to which any of the
property or assets of the Selling Stockholder is subject and (iii) will not
result in any violation of any law, administrative regulation or administrative
or court decree applicable to the Selling Stockholder. No consent, approval,
authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency, is required for the
Selling Stockholder's execution, delivery and
10
performance of this Agreement and consummation of the transactions contemplated
hereby and by the Prospectus, except such as have been obtained or made by the
Selling Stockholder and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
(f) No Applicable Registration or Other Similar Rights. The Selling
Stockholder does not have any registration or other similar rights to have any
equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as are described in the Prospectus.
(g) No Further Consents. Except for the consent of the Selling Stockholder
to the number of Shares to be sold by it pursuant to this Agreement, no consent,
approval or waiver is required under any instrument or agreement to which the
Selling Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, in connection with the offering, sale or
purchase by the Underwriters of any of the Shares which may be sold by the
Selling Stockholder under this Agreement or the consummation by the Selling
Stockholder of any of the other transactions contemplated hereby.
(h) Disclosure Made by Such Selling Stockholder in the Prospectus. All
information furnished by or on behalf of the Selling Stockholder in writing
expressly for use in the Registration Statement and Prospectus is, and on the
First Closing Date and the Second Closing Date will be, correct and complete in
all material respects, and does not, and on the First Closing Date and the
Second Closing Date will not, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Selling Stockholder confirms as accurate the number of shares of
Common Stock set forth opposite its name in the Prospectus under the caption
"Principal Stockholders" (both prior to and after giving effect to the sale of
the Shares).
(i) No Price Stabilization or Manipulation. The Selling Stockholder has not
taken and will not take, directly or indirectly, any action designed to
stabilize or manipulate, or that might be reasonably expected to cause or result
in stabilization or manipulation of, the price of the Common Stock to facilitate
the sale or resale of the Shares.
Any certificate signed by an officer of the Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Selling Stockholder to each
Underwriter as to the matters set forth therein.]
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
The Firm Shares. The Company agrees to issue and sell to the several
Underwriters the Firm Shares upon the terms herein set forth. On the basis of
the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the respective number of
Firm Shares set forth opposite their names on Schedule A. The purchase price per
Firm Common Share to be paid by the several Underwriters to the Company shall be
$[___] per share.
11
[Initial paragraph to be replaced with the following text if only Selling
Stockholders are offering the Firm Shares:]
The Firm Shares. The Selling Stockholders agree to sell to the several
Underwriters the Firm Shares upon the terms set forth herein, each Selling
Stockholder selling the number of Firm Shares set forth opposite such
Selling Stockholder's name on Schedule B. On the basis of the
representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase from the Selling Stockholders
the respective number of Firm Shares set forth opposite their names on
Schedule A. The purchase price per Firm Share to be paid by the several
Underwriters to the Selling Stockholders shall be $[___] per share.
[Initial paragraph to be replaced with the following text if the Company and
Selling Stockholders are offering the Firm Shares:]
The Firm Shares. Upon the terms herein set forth, (i) the Company
agrees to issue and sell to the several Underwriters an aggregate of [___]
Firm Shares and (ii) the Selling Stockholders agree to sell to the several
Underwriters an aggregate of [___] Firm Shares, each Selling Stockholder
selling the number of Firm Shares set forth opposite such Selling
Stockholder's name on Schedule B. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject
to the conditions herein set forth, the Underwriters agree, severally and
not jointly, to purchase from the Company and the Selling Stockholders the
respective number of Firm Shares set forth opposite their names on Schedule
A. The purchase price per Firm Share to be paid by the several Underwriters
to the Company and the Selling Stockholders shall be $[___] per share.
The First Closing Date. Delivery of certificates for the Firm Shares
to be purchased by the Underwriters and payment therefor shall be made at
the offices of [ ] New York, New York (or such other place as may be agreed
to by the Company and the Representative) at 9:00 a.m. New York time, on
[___], or such other time and date not later than 11:30 a.m. New York time,
on [___] as the Representative and the Company shall agree upon (the time
and date of such closing are called the "First Closing Date").
The Optional Shares; the Second Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, [the
Company] [[___], one of the Selling Stockholders] [the Selling
Stockholders] [the Company and the Selling Stockholders] hereby grant[s] an
option to the several Underwriters to purchase, severally and not jointly,
up to an aggregate of [___] Optional Shares from [the Company][such Selling
Stockholder] [the Selling Stockholders] [the Company and the Selling
Stockholders] at the purchase price per share to be paid by the
Underwriters for the Firm Shares. The option granted hereunder is for use
by the Underwriters solely in covering any over-allotments in connection
with the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised at any time (but not more than once) upon notice
by the Representative to [the Company][such Selling Stockholder (with a
copy to the Company)], [the Selling Stockholders (with a copy to the
Company)] [the Company and the Selling Stockholders], which notice may be
given at any time within 30 days from the date of this Agreement. Such
notice shall set forth (i) the aggregate number of Optional Shares as to
which the Underwriters are exercising the option, (ii) the names and
denominations in which the certificates for the Optional Shares are to be
registered and (iii) the time, date and place at which such certificates
will be delivered (which time and date may be simultaneous with, but not
earlier than, the First Closing Date; and in
12
such case the term "First Closing Date" shall refer to the time and date of
delivery of certificates for the Firm Shares and the Optional Shares). Such
time and date of delivery, if subsequent to the First Closing Date, is
called the "Second Closing Date" and shall be determined by the
Representative and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional
Shares are to be purchased, each Underwriter agrees, severally and not
jointly, to purchase the number of Optional Shares (subject to such
adjustments to eliminate fractional shares as the Representative may
determine) that bears the same proportion to the total number of Optional
Shares to be purchased as the number of Firm Shares set forth on Schedule A
opposite the name of such Underwriter bears to the total number of Firm
Shares. The Representative may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to [the Company]
[such Selling Stockholder (with a copy to the Company)] [the Selling
Stockholders (with a copy to the Company)] [the Company and the Selling
Stockholders].
Public Offering of the Shares. The Representative hereby advises the
Company [and the Selling Stockholders] that the Underwriters intend to
offer for sale to the public, as described in the Prospectus, their
respective portions of the Shares as soon after this Agreement has been
executed and the Registration Statement has been declared effective as the
Representative, in its sole judgment, has determined is advisable and
practicable.
[The following Payment and Delivery provisions are to be inserted if all Shares
are being sold only by the Company]
Payment for the Shares. Payment for the Firm Shares shall be made at
the First Closing Date (and, if applicable, for the Optional Shares at the
Second Closing Date) by wire transfer of immediately available funds to a
bank account designated in writing by the Company or in such other manner
of payment as the Company and the Representative may agree.
It is understood that the Representative has been authorized, for its
own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for,
the Firm Shares and any Optional Shares the Underwriters have agreed to
purchase. [ ], individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for any
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representative by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but
any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
Delivery of the Shares. The Company shall deliver, or cause to be
delivered, to the Representatives, for the accounts of the several
Underwriters, certificates for the Firm Shares at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor or in such other manner
of payment as the Company and the Representative may agree. The Company
shall also deliver, or cause to be delivered, to the Representatives, for
the accounts of the several Underwriters, certificates for the Optional
Shares the Underwriters have agreed to purchase at the First Closing Date
or the Second Closing Date, as the case may be, against the irrevocable
release of a wire transfer of immediately available funds for the amount of
the purchase price therefor or in such other manner of payment as the
Company and the Representative may agree. The certificates for the Shares
shall be in definitive form and registered in such names
13
and denominations as the Representatives shall have requested at least two
full business days prior to the First Closing Date (or the Second Closing
Date, as the case may be) and shall be made available for inspection on the
business day preceding the First Closing Date (or the Second Closing Date,
as the case may be) at a location in New York City as the Representatives
may designate. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations
of the Underwriters.
[The following Payment and Delivery provisions are to be inserted if Shares are
being sold by the Company and by Selling Stockholders (or edited appropriately
if Firm Shares or Optional Shares are being sold only by Selling Stockholders)]
Payment for the Shares. Payment for the Firm Shares to be sold by the
Company shall be made at the First Closing Date (and, if applicable, for
the Optional Common Share at the Second Closing Date) by wire transfer of
immediately available funds to a bank account designated in writing by the
Company or in such other manner of payment as the Company and the
Representative may agree. Payment for the Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable,
at the Second Closing Date) by wire transfer of immediately available funds
to a bank account designated in writing by the Selling Stockholder or in
such other manner of payment as the Company and the Representative agree.
It is understood that the Representative has been authorized, for its
own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for,
the Firm Shares and any Optional Shares the Underwriters have agreed to
purchase. [ ], individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for any
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representative by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but
any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
Delivery of the Shares. The Company [and the Selling Stockholders]
shall deliver, or cause to be delivered, to the Representative for the
accounts of the several Underwriters certificates for the Firm Shares [to
be sold by them] at the First Closing Date, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the
purchase price therefor or in such other manner of payment as the Company
and the Representative may agree. The Company [and the Selling
Stockholders] shall also deliver, or cause to be delivered, to the
Representative for the accounts of the several Underwriters, certificates
for the Optional Shares the Underwriters have agreed to purchase [from
them] at the First Closing Date or the Second Closing Date, as the case may
be, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor or in such
other manner of payment as the Company and the Representative may agree.
The certificates for the Shares shall be in definitive form and registered
in such names and denominations as the Representative shall have requested
at least two full business days prior to the First Closing Date (or the
Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the
Second Closing Date, as the case may be) at a location in New York City as
the Representative may designate. Time shall be of the essence, and
delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
14
Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Shares are first released
by the Underwriters for sale to the public, the Company shall deliver or
cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representative shall request.
SECTION 3. COVENANTS[OF THE COMPANY].
[A. COVENANTS OF THE COMPANY]. The Company covenants and agrees with each
Underwriter as follows:
(a) Representative's Review of Proposed Amendments and Supplements. During
such period beginning on the date hereof and ending on the later of the First
Closing Date or such date, as in the opinion of counsel for the Underwriters,
the Prospectus is no longer required by law to be delivered in connection with
sales by an Underwriter or dealer (the "Prospectus Delivery Period"), prior to
amending or supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the Prospectus,
the Company shall furnish to the Representative for review a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Representative reasonably objects.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representative in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the
Prospectus, (iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order preventing or
suspending the use of the Prospectus, or of any proceedings to remove, suspend
or terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall comply
with the provisions of Rules 424(b), 430A and 434, as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) were received in a timely manner by
the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the reasonable determination of the Representative after consultation
with counsel for the Underwriters it is otherwise necessary to amend or
supplement the Prospectus to comply with law, the Company agrees to promptly
prepare (subject to Section 3[(A)](a) hereof), file with the Commission and
furnish at its own expense to the Underwriters and to dealers, amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law provided that if any
Underwriter is required to deliver a prospectus in connection with the sale of
any of the
15
Shares at any time nine months or more after the date of the Prospectus, such
amendments, filing and furnishing shall be at the expense of such Underwriter.
(d) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish to the Representative, without charge, during the Prospectus
Delivery Period, as many copies of the Prospectus and any amendments and
supplements thereto (including any documents incorporated or deemed by reference
therein) as the Representative may reasonably request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representative and counsel for the Underwriters to qualify or register the
Shares for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial Securities laws of those
jurisdictions designated by the Representative, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Shares. Notwithstanding the
foregoing, the Company shall not be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise the
Representative promptly of the suspension of the qualification or registration
of (or any such exemption relating to) the Shares for offering, sale or trading
in any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best efforts
to obtain the withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representative an
earnings statement or statements (which need not be audited) covering the
twelve-month period ending [___] that satisfies the provisions of Section 11(a)
of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission and the New York
Stock Exchange all reports and documents required to be filed under the Exchange
Act. Additionally, the Company shall report the use of proceeds from the
issuance of the Shares as may be required under Rule 463 under the Securities
Act.
(j) Exchange Act Compliance. During the Prospectus Delivery Period, the
Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within
the time periods required by the Exchange Act.
(k) Agreement Not to Offer or Sell Additional Securities. During the period
commencing on the date hereof and ending on the 180th day following the date of
the Prospectus, the Company will not, without the prior written consent of [the
Representative] (which consent may be withheld at the sole discretion of [the
Representative]), directly or indirectly, sell,
16
offer, contract or grant any option to sell, pledge, transfer or establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of,
or file any registration statement under the Securities Act (other than a
registration statement on Form S-8) in respect of, any shares of Common Stock,
options or warrants to acquire shares of the Common Stock or securities
exchangeable or exercisable for or convertible into shares of Common Stock
(other than as contemplated by this Agreement with respect to the Shares);
provided, however, that the Company may issue shares of its Common Stock or
options to purchase its Common Stock, or Common Stock upon exercise of options,
pursuant to any stock option, stock bonus or other stock plan or arrangement
described in the Prospectus, but only if any holder of such shares, options, or
shares issued upon exercise of such options, who is an officer or director of
the Company or any of its subsidiaries has agreed or agrees in writing not to
sell, offer, dispose of or otherwise transfer any such shares or options during
such period without the prior written consent of the Representative (which
consent may be withheld at the sole discretion of the Representative).
(l) Future Reports to the Representative. Until the third anniversary of
the date hereof, the Company will furnish to the Representative at [ ]
Attention:[ ]: (i) as soon as practicable after the end of each fiscal year,
copies of the Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other report filed by the Company with the Commission; and
(iii) from time to time, such other public information concerning the Company as
the Representative may reasonably request.
The Representatives, on behalf of the several Underwriters, may, in their
sole discretion, waive in writing the performance by the Company of any one or
more of the foregoing covenants or extend the time for their performance.
[B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder further
covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such Selling
Stockholder will not, without the prior written consent of [the Representative]
(which consent may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell (including without limitation
any short sale), pledge, transfer, establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose
of any shares of Common Stock, options or warrants to acquire shares of Common
Stock, or securities exchangeable or exercisable for or convertible into shares
of Common Stock currently or hereafter owned either of record or beneficially
(as defined in Rule 13d-3 under Securities Exchange Act of 1934, as amended) by
the undersigned, or publicly announce the undersigned's intention to do any of
the foregoing, for a period commencing on the date hereof and continuing through
the close of trading on the date 180 days after the date of the Prospectus.
(b) Delivery of Forms W-8 and W-9. To deliver to the Representative prior
to the First Closing Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Stockholder is a non-United States
person) or Form W-9 (if the Selling Stockholder is a United States Person).]
17
[C.] [The Representative], on behalf of the several Underwriters, may, in
its sole discretion, waive in writing the performance by the Company [or any
Selling Stockholder] of any one or more of the foregoing covenants or extend the
time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its [and the Selling
Stockholder's] obligations hereunder and in connection with the transactions
contemplated hereby, including without limitation (i) all expenses incident to
the issuance and delivery of the Shares (including all printing and engraving
costs), (ii) all fees and expenses of the registrars and transfer agents of the
Common Stock, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Shares to the Underwriters, (iv)
all fees and expenses of the Company's counsels, independent public or certified
public accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), any preliminary prospectus and the
Prospectus, and all amendments and supplements thereto, (vi) all filing fees,
reasonable attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Shares for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada, and, if requested by the Representative,
preparing and printing a "Blue Sky Survey" or memorandum, and any supplements
thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriters in connection with, the NASD's review
and approval of the Underwriters' participation in the offering and distribution
of the Shares, (viii) the fees and expenses, if any, associated with listing the
Shares on the New York Stock Exchange, and (ix) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement. Except
as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements
of their counsels.
[This Section 4 shall not affect or modify any separate, valid agreement
between the Company and the Selling Stockholders involving the payment of
expenses by the Company or the Selling Stockholder.]
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Shares as
provided herein on the First Closing Date and, with respect to the Optional
Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company [and the Selling
Stockholders] set forth in Section 1 [Sections 1(A) and 1(B)] hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Shares, as of the Second Closing Date as though then
made, to the timely performance by the Company [and the Selling Stockholders] of
its [their respective] covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Representative
shall have received from [___], independent public or certified public
accountants for the Company, a letter dated the date hereof addressed to the
Underwriters, in form and substance satisfactory to the Representative,
containing statements and information of the type ordinarily included in
accountant's "comfort letters" to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration
18
Statement and the Prospectus (and the Representative shall have received an
additional [___] conformed copies of such accountants' letter for each of the
several Underwriters).
(b) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD. For the period from and after effectiveness of this Agreement and
prior to the First Closing Date and, with respect to the Optional Shares, the
Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment
to the Registration Statement containing the information required by such
Rule 430A, and such post-effective amendment shall have become effective;
or, if the Company elected to rely upon Rule 434 under the Securities Act
and obtained the Representative's consent thereto, the Company shall have
filed a Term Sheet with the Commission in the manner and within the time
period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by
the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Shares, the Second Closing Date:
(i) there shall not have occurred any change, or any development that
could reasonably be expected to result in a change, in the condition,
financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course
of business, of the Company and its subsidiaries, considered as one entity,
the effect of which is, in the judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
Offering or delivery of the Shares as contemplated in the Registration
Statement and the Prospectus; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded financial strength or claims paying
ability of the Company or any of its subsidiaries by A.M. Best Company,
Inc. or Standard & Poor's Insurance Rating Services.
(d) Opinion of Counsel for the Company. On each of the First Closing Date
and the Second Closing Date the Representatives shall have received the opinion
and 10b-5 letter of Shearman & Sterling, counsel for the Company, each dated as
of such Closing Date, the forms of which are attached as Exhibit A-1 (and the
Representatives shall have received an additional [ ] conformed copies of
such counsel's legal opinion and 10b-5 letter for each of the several
Underwriters).
19
(e) Opinion of General Counsel of the Company. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
opinion and 10b-5 letter of Xxxxxx X. Xxxxx, Esq., General Counsel for the
Company, dated as of such Closing Date, the forms of which are attached as
Exhibit A-2 (and the Representatives shall have received an additional [ ]
conformed copies of such General Counsel's legal opinion and 10b-5 letter for
each of the several Underwriters).
(f) Opinion of Counsel for the Underwriters. On each of the First Closing
Date and the Second Closing Date the Representative shall have received an
opinion of [___], counsel for the Underwriters, dated as of such Closing Date,
in form and substance satisfactory to the Underwriters.
(g) Officers' Certificate. On each of the First Closing Date and the Second
Closing Date the Representative shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of such Closing Date, to the effect set forth in subsections
(b)(ii) and (c)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement and prior
to such Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set
forth in Section 1[(A)] of this Agreement are true and correct with the
same force and effect as though expressly made on and as of such Closing
Date; and
(iii) the Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(h) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date the Representative shall have received from [___],
independent public or certified public accountants for the Company, a letter
dated such date, in form and substance satisfactory to the Representative, to
the effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection (a) of this Section 5, except that the specified
date referred to therein for the carrying out of procedures shall be no more
than three business days prior to the First Closing Date or Second Closing Date,
as the case may be (and the Representative shall have received an additional
[___] conformed copies of such accountants' letter for each of the several
Underwriters).
(i) [Opinion of Counsel for the Selling Stockholders. On each of the First
Closing Date and the Second Closing Date the Representative shall have received
the favorable opinion of [___], counsel for the Selling Stockholders, dated as
of such Closing Date, the form of which is attached as Exhibit B (and the
Representative shall have received an additional [___] conformed copies of such
counsel's legal opinion for each of the several Underwriters).
(j) Selling Stockholder's Officer's Certificate. On each of the First
Closing Date and the Second Closing Date the Representatives shall receive a
written certificate executed by the President or a Vice President of the Selling
Stockholder, dated as of such Closing Date, to the effect that:
20
(i) the representations and warranties of the Selling Stockholder set
forth in Section 1(B) of this Agreement are true and correct with the same
force and effect as though expressly made by the Selling Stockholder on and
as of such Closing Date; and
(ii) the Selling Stockholder has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(k) Selling Stockholder's Documents. On the date hereof, the Company and
the Selling Stockholder shall have furnished for review by the Representatives
copies of such further information, certificates and documents as the
Representatives may reasonably request.]
(l) Lock-Up Agreement from Certain Securityholders of the Company. On the
date hereof, the Company shall have furnished to the Representatives an
agreement in the form of Exhibit C hereto from [ ] and such agreement shall
be in full force and effect on each of the First Closing Date and the Second
Closing Date.
(m) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, the Representative and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Shares as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of
any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Representative
by notice to the Company [and the Selling Stockholders] at any time on or prior
to the First Closing Date and, with respect to the Optional Shares, at any time
prior to the Second Closing Date, which termination shall be without liability
on the part of any party to any other party, except that Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated (i) by the Representatives pursuant to Section 5, (ii) by the Company
pursuant to Section 7, or (iii) by the Representatives pursuant to Section
11(iv), or if the sale to the Underwriters of the Shares on the First Closing
Date is not consummated because of any refusal, inability or failure on the part
of the Company [or the Selling Stockholder] to perform any agreement herein or
to comply with any provision hereof, the Company agrees to reimburse the
Representatives upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Representatives and the Underwriters in connection
with the proposed purchase and the offering and sale of the Shares, including
but not limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not become
effective until the later of (i) the execution of this Agreement by the parties
hereto and (ii) notification by the Commission to the Company and the
Representatives of the effectiveness of the Registration Statement under the
Securities Act.
21
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company [or the Selling Stockholder]
to any Underwriter, except that, if this Agreement is terminated by the Company
[or the Selling Stockholder], the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4 and
6 hereof, or (b) any Underwriter to the Company [or the Selling Stockholder],
except that in each case the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters by the Company. The Company agrees
to indemnify and hold harmless each Underwriter, its directors, officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act, as applicable, (including
each affiliate of any Underwriter who is deemed a third party beneficiary
pursuant to Section 14 hereof, its directors, officers and employees, and any
controlling person of such affiliate) against any loss, claim, damage, liability
or expense, as incurred, to which such Underwriter or such controlling person
may become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and to reimburse each Underwriter and each such
controlling person for any and all expenses (including the reasonable fees and
disbursements of counsel chosen by the Representatives) as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Representatives expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and provided, further, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person at or prior to the written confirmation of the sale of the Shares
to such person, and if such Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim,
22
damage, liability or expense. The indemnity agreement set forth in this Section
8(a) shall be in addition to any liabilities that the Company may otherwise
have.
(b) [Indemnification of the Underwriters by the Selling Stockholder. The
Selling Stockholder agrees to indemnify and hold harmless each Underwriter, its
directors, officers and employees, and each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the Exchange Act, as
applicable, (including each affiliate of any Underwriter who is deemed a third
party beneficiary pursuant to Section 14 hereof, its directors, officers and
employees, and any controlling person of such affiliate) against any loss,
claim, damage, liability or expense, as incurred, to which such Underwriter or
such controlling person may become subject, under the Securities Act or the
Exchange Act, or other federal or state statutory law or regulation or at common
law or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of the Selling Stockholder), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of 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, or the
Prospectus (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the Selling
Stockholder expressly for use therein; and to reimburse such Underwriter and
each such controlling person for any and all expenses (including the reasonable
fees and disbursements of counsel chosen by the Representatives) as such
expenses are reasonably incurred by such Underwriter or such controlling person
in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that with respect to any preliminary prospectus, the foregoing indemnity
agreement shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, claim, damage, liability or expense purchased Shares, or any
person controlling such Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to Section 2 and a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the sale
of the Shares to such person, and if such Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. Each of the Underwriters hereby acknowledges that
the only information that the Selling Stockholder has furnished to the Company
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth in [ ] in the Prospectus, and the Selling Stockholder confirms that such
statements are correct. The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that the Selling Stockholder may
otherwise have.]
(c) Indemnification of the Company[, the Selling Stockholder] and Certain
Other Persons. Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement[, the Selling Stockholder] and each person, if
any, who controls the Company [or the Selling Stockholder] within the meaning of
the Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which the Company, or any such director,
officer, [the Selling Stockholder] or any controlling person may become
23
subject, under the Securities Act or the Exchange Act, or other federal or state
statutory law or regulation or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or arises out of or is
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, or the Prospectus (or
any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use therein; and to reimburse the Company, or any such director, officer[,
the Selling Stockholder] or any controlling person for any legal and other
expense reasonably incurred by the Company, or any such director, officer[, the
Selling Stockholder] or any controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. [Each of] the Company [and the Selling
Stockholder] hereby acknowledges that the only information that the Underwriters
have furnished to the Company expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in [ ] under the caption "Underwriting" in
the Prospectus, and the Underwriters confirm that such statements are correct.
The indemnity agreement set forth in this Section 8(c) shall be in addition to
any liabilities that each Underwriter may otherwise have.
(d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
24
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party ([the Representative] in the case of Section 8(c) and Section
9), representing the indemnified parties who are parties to such action) or (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(e) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 8(a), Section 8(b) or Section 8(c) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement of the nature
contemplated by Section 8(a), Section 8(b) or Section 8(c) effected without its
consent if such indemnifying party (i) reimburses such indemnified party in
accordance with such request to the extent it determines in good faith such
request to be reasonable and (ii) provides written notice to the indemnified
party substantiating in reasonable detail the unpaid balance as unreasonable, in
each case prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section 8
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company [and the Selling Stockholder,] on the
one hand, and the Underwriters, on the other hand, from the offering of the
Shares pursuant to this Agreement or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company [and the Selling Stockholder,]
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable
25
considerations. The relative benefits received by the Company [and the Selling
Stockholder,] on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Shares pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Shares pursuant to this Agreement (before deducting
expenses) received by the Company [and the Selling Stockholder], and the total
underwriting discount received by the Underwriters, in each case as set forth on
the front cover page of the Prospectus (or, if Rule 434 under the Securities Act
is used, the corresponding location on the Term Sheet) bear to the aggregate
initial public offering price of the Shares as set forth on such cover. The
relative fault of the Company [and the Selling Stockholder,] on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company [or the Selling Stockholder,] on the one
hand, or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(d) and Section 8(e), any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(d) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(d) for purposes of indemnification.
The Company[, the Selling Stockholder] and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Shares underwritten by it
and distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several, and not joint, in proportion to their respective
underwriting commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each director, officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Shares that it
or they have agreed to purchase hereunder on such date, and the aggregate number
of Shares which such defaulting
26
Underwriter or Underwriters agreed but failed or refused to purchase does not
exceed 10% of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated, severally, in the proportions that
the number of Firm Shares set forth opposite their respective names on Schedule
A bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representative with the consent of the non-defaulting
Underwriters, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with respect to which such default occurs exceeds 10%
of the aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to the Representative and the Company for the purchase of such
Shares are not made within 48 hours after such default, this Agreement shall
terminate without liability of any party to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination. In any such case either the Representative or the
Company shall have the right to postpone the First Closing Date or the Second
Closing Date, as the case may be, but in no event for longer than seven days in
order that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing Date
this Agreement may be terminated by the Representatives by notice given to the
Company [and the Selling Stockholder] if at any time (i) trading or quotation in
any of the Company's securities shall have been suspended or limited by the
Commission or by the New York Stock Exchange, or trading in securities generally
on the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD; (ii) a
general banking moratorium shall have been declared by any of United States
federal, New York or California authorities; (iii) there shall have occurred any
outbreak or escalation of hostilities or any crisis or calamity involving or
affecting the United States or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of the Representatives is
material and adverse and makes it impracticable to market the Shares in the
manner and on the terms described in the Prospectus or to enforce contracts for
the sale of securities; or (iv) there shall have occurred any change, or any
development that could reasonably be expected to result in a change, in the
condition, financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity, the
effect of which is, in the judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the Offering or
delivery of the Shares as contemplated in the Registration Statement and the
Prospectus. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company [or the Selling Stockholder] to any
Underwriter except that the Company shall be obligated to reimburse the expenses
of the Representatives and the Underwriters in accordance with Sections 4 and 6
hereof, (b) any Underwriter to the Company [or the Selling Stockholder], or
(c) of any party
27
hereto to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers [, of the Selling Stockholders] and
of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, [or the Selling Stockholders,]
as the case may be, and will survive delivery of and payment for the Shares sold
hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representative:
[ ]
Facsimile:
Attention:
with a copy to:
[ ]
Facsimile:
Attention:
If to the Company:
Odyssey Re Holdings Corp.
000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx,
President and Chief Executive Officer
With a copy to:
Odyssey Re Holdings Corp.
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxx,
Senior Vice President,
General Counsel and Corporate Secretary
[If to the Selling Stockholder];
[ ]
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS; THIRD PARTY BENEFICIARY. This Agreement will inure
to the benefit of and be binding upon the parties hereto, including any
substitute Underwriters
28
pursuant to Section 10 hereof, and their respective successors, and to the
benefit of the employees, officers and directors and controlling persons
referred to in Section 8 and Section 9, and to any third party beneficiary
designated below and any successor of such third party beneficiary, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares as such from any of the Underwriters
merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during negotiations regarding
the provisions hereof, including, without limitation, the indemnification
provisions of Section 8 and the contribution provisions of Section 9, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
29
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
ODYSSEY RE HOLDINGS CORP.
By:
----------------------------------------
[Title]
[SELLING STOCKHOLDERS]
By:
----------------------------------------
[Title]
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representative[s] in New York, New York as of the date first above written.
[REPRESENTATIVE[S]]
Acting as Representative[s] of the
several Underwriters named in
the attached Schedule A.
[By REPRESENTATIVE[S]]
By:
SCHEDULE A
NUMBER OF
FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
[___] ......................................................... [___]
[___] ......................................................... [___]
[___] ......................................................... [___]
[___] ......................................................... [___]
[___] ......................................................... [___]
Total................................................. [___]
SCHEDULE B
NUMBER OF MAXIMUM NUMBER OF
SELLING STOCKHOLDER FIRM SHARES OPTIONAL SHARES
TO BE SOLD TO BE SOLD
------------------- ----------- -----------------
Selling Stockholder #1
[address]
Attention: [___] .......................... [___] [___]
Selling Stockholder #2
[address]
Attention: [___] .......................... [___] [___]
Total:............................ [___] [___]
=========== =================
EXHIBIT A
[Opinion of Shearman & Sterling, counsel for the Company to be delivered
pursuant to Section 5(d) of the Underwriting Agreement.]
A-1
EXHIBIT A-2
[Opinion of Xxxxxx X. Xxxxx, Esq., General Counsel for the Company to be
delivered pursuant to Section 5(e) of the Underwriting Agreement.]
A-1
EXHIBIT B
[Opinion of [ ], counsel for the Selling Stockholder, to be delivered
pursuant to Section 5(i) of the Underwriting Agreement.]
B-1
EXHIBIT C
[Date]
[The Representatives]
As Representatives of the Several Underwriters
[c/o The Representative]
[ ]
RE: Odyssey Re Holdings Corp. (the "Company")
Ladies & Gentlemen:
The undersigned is an officer of the Company or an owner of record or
beneficially of certain shares of common stock of the Company (the "Common
Stock") or securities convertible into or exchangeable or exercisable for Common
Stock. The Company proposes to carry out a public offering of Common Stock (the
"Offering") for which you will act as the representatives of the underwriters.
The undersigned recognizes that the Offering will be of benefit to the
undersigned and will benefit the Company. The undersigned acknowledges that you
and the other underwriters are relying on the representations and agreements of
the undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of [The Representatives]
(which consent may be withheld in their sole discretion), (i) directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, or otherwise dispose of any shares of Common Stock, options or warrants
to acquire shares of Common Stock, or securities exchangeable or exercisable for
or convertible into shares of Common Stock currently or hereafter owned either
of record or beneficially (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by the undersigned, or (ii) enter into any
swap or other arrangement that transfers all or a portion of the economic
consequences associated with the ownership of any Common Stock, or, in each
case, publicly announce the undersigned's intention to do any of the foregoing,
for a period commencing on the date hereof and continuing through the close of
trading on the date 180 days after the date of the Prospectus (as defined in the
Underwriting Agreement). The undersigned also agrees and consents to the entry
of stop transfer instructions with the Company's transfer agent and registrar
against the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
currently or hereafter owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
------------------------------------------
Printed Name of Holder
1
By:
----------------------------------------
Signature
-------------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
2
