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ENDURANCE SPECIALTY HOLDINGS LTD.
9,800,000 Ordinary Shares
PURCHASE AGREEMENT
Dated: December 2, 2004
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TABLE OF CONTENTS
SECTION 1. Representations and Warranties..................................................................2
(a) Representations and Warranties by the Company...................................................2
(i) Compliance with Registration Requirements..................................................2
(ii) Independent Accountants....................................................................2
(iii) Financial Statements.......................................................................2
(iv) No Material Adverse Change in Business.....................................................3
(v) Good Standing of the Company...............................................................3
(vi) Good Standing of Subsidiaries..............................................................3
(vii) Capitalization.............................................................................4
(viii) Authorization and Execution of Agreement...................................................4
(ix) Authorization and Description of Securities................................................4
(x) Absence of Defaults and Conflicts..........................................................4
(xi) Financial Assistance.......................................................................5
(xii) Absence of Labor Dispute...................................................................5
(xiii) Absence of Proceedings.....................................................................5
(xiv) Accuracy of Exhibits.......................................................................5
(xv) Possession of Intellectual Property........................................................5
(xvi) Absence of Further Requirements............................................................6
(xvii) Licenses and Permits.......................................................................6
(xviii) Compliance with Applicable Laws............................................................6
(xix) Tax Liabilities and Reserves...............................................................6
(xx) Internal Controls..........................................................................7
(xxi) Property and Leases........................................................................7
(xxii) Investment Company Act.....................................................................7
(xxiii) Stamp Duty, Excise Tax, Etc................................................................7
(xxiv) Currency Exchange Control..................................................................7
(xxv) Registration Rights........................................................................7
(xxvi) No Ratings Downgrade.......................................................................7
(xxvii) Listing Approval...........................................................................7
(b) Representations and Warranties by the Selling Shareholders......................................8
(i) Accurate Disclosure........................................................................8
(ii) Authorization of this Agreement............................................................8
(iii) Noncontravention...........................................................................8
(iv) Certificates Suitable for Transfer.........................................................8
(v) Valid Title................................................................................9
(vi) Delivery of Securities.....................................................................9
(vii) Absence of Manipulation....................................................................9
(viii) Absence of Further Requirements............................................................9
(ix) No Association with NASD...................................................................9
(c) Officer's Certificates.........................................................................10
SECTION 2. Sale and Delivery to Underwriter; Closing......................................................10
(a) Initial Securities.............................................................................10
(b) Additional Securities..........................................................................10
(c) Payment........................................................................................10
(d) Denominations; Registration....................................................................11
(e) U.K. Selling Restrictions......................................................................11
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SECTION 3. Covenants of the Company.......................................................................12
(a) Filings with the Commission....................................................................12
(b) Amendments or Supplements......................................................................12
(c) Notice to the Underwriter......................................................................12
(d) Delivery of Registration Statements............................................................12
(e) Delivery of Prospectus.........................................................................13
(f) Continued Compliance with Securities Laws......................................................13
(g) Blue Sky Qualifications........................................................................13
(h) Rule 158.......................................................................................13
(i) Restriction on Sale of Securities..............................................................13
(j) Reporting Requirements.........................................................................14
SECTION 4. Payment of Expenses............................................................................14
(a) Expenses.......................................................................................14
(b) Expenses of Selling Shareholders...............................................................14
(c) Allocation of Expenses.........................................................................14
(d) Termination of Agreement.......................................................................14
SECTION 5. Conditions of Underwriter's Obligations........................................................15
(a) Effectiveness of Registration Statement........................................................15
(b) Opinion of Counsel for Company.................................................................15
(c) Opinion of Bermuda Counsel for Company.........................................................15
(d) Opinion of United Kingdom Counsel for Company..................................................15
(e) Opinion of Counsel for Selling Shareholders....................................................15
(f) Opinion of Counsels for Underwriter............................................................15
(g) Officers' Certificate..........................................................................16
(h) Certificate of Selling Shareholders............................................................16
(i) Accountant's Comfort Letter....................................................................16
(j) Lock-up Agreements.............................................................................16
(k) Delivery of Prospectus.........................................................................16
(l) Conditions to the purchase of the Additional Securities........................................16
(m) Additional Documents...........................................................................17
(n) Termination of Agreement.......................................................................17
SECTION 6. Indemnification................................................................................18
(a) Indemnification of Underwriter.................................................................18
(b) Indemnification of Company, Directors and Officers and Selling Shareholders....................18
SECTION 7. Contribution...................................................................................20
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................20
SECTION 9. Termination of Agreement.......................................................................21
(a) Termination; General...........................................................................21
(b) Liabilities....................................................................................21
SECTION 10. Notices........................................................................................21
SECTION 11. Parties........................................................................................21
SECTION 12. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE...........................................22
SECTION 13. Waiver of Immunity.............................................................................22
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SECTION 14. Effect of Headings.............................................................................22
SCHEDULES
Schedule A - List of Selling Shareholders...................................................................Sch A-1
Schedule B - List of Persons subject to Lock-up.............................................................Sch B-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Company's Outside Counsel....................................................A-1-1
Exhibit A-2 - Form of Negative Assurance Letter of Company's Outside Counsel..................................A-2-1
Exhibit A-3 - Form of Tax Opinion of Company's Outside Counsel................................................A-3-1
Exhibit A-4 - Form of Opinion of Company's General Counsel....................................................A-4-1
Exhibit B - Form of Opinion of Company's Bermuda Counsel........................................................B-1
Exhibit C - Form of Opinion of Company's United Kingdom Counsel.................................................C-1
Exhibit D - Form of Opinion of Selling Shareholders.............................................................D-1
Exhibit E - Form of Lock-up Letter..............................................................................E-1
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ENDURANCE SPECIALTY HOLDINGS LTD.
(A BERMUDA HOLDING COMPANY)
9,800,000 ORDINARY SHARES
(PAR VALUE $1.00 PER SHARE)
PURCHASE AGREEMENT
December 2, 2004
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Certain shareholders named in Schedule A hereto (each, a "Selling
Shareholder" and collectively, the "Selling Shareholders") of Endurance
Specialty Holdings Ltd., an exempted company incorporated in Bermuda as a
holding company (the "Company"), propose, subject to the terms and conditions
stated herein, to sell to Xxxxxxx, Sachs & Co. (the "Underwriter") up to
9,800,000 ordinary shares, par value U.S. $1.00 per share, of the Company (the
"Ordinary Shares"). The Underwriter shall initially purchase 6,000,000 Ordinary
Shares from the selling shareholders (such Ordinary Shares being referred to
herein as the "Initial Securities") and, conditional upon and following the
delivery by it of the Resale Notice (as defined herein), shall purchase the
remaining 3,800,000 Ordinary Shares (such additional Ordinary Shares being
referred to herein as the "Additional Securities"), in each case subject to the
terms and conditions set forth herein. The Initial Securities and the Additional
Securities are referred to collectively herein as the "Securities".
The Company and the Selling Shareholders understand that the
Underwriter proposes to make a public offering of the Securities as soon as it
deems advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "1933 Act") a
registration statement on Form S-3 (No. 333-116505) including a prospectus (the
"Basic Prospectus"), relating to certain of its debt securities, preference
shares, Ordinary Shares (including the Securities), depositary shares, warrants,
stock purchase contracts and stock purchase units to be issued by the Company
from time to time in accordance with Rule 415 under the 1933 Act. Such
registration statement was declared effective on June 30, 2004. The Company
shall file with the Commission pursuant to Rule 424 under the 1933 Act a
prospectus supplement specifically relating to the Securities (the "Prospectus
Supplement"). The registration statement, as amended at the time it became
effective, including the information, if any, deemed pursuant to Rule 430A under
the 1933 Act to be part of the registration statement at the time of its
effectiveness ("Rule 430 Information"), is referred to herein as the
"Registration Statement"; and as used herein, the term "Prospectus" means the
Basic Prospectus as supplemented by the Prospectus Supplement in the form first
used to confirm sales of the Securities. Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Registration Statement
and the Prospectus. References herein to the Registration Statement, the Basic
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by
reference therein. The terms "supplement," "amendment" and "amend" as used
herein with respect to the Registration Statement or the Prospectus shall be
deemed to refer to and include any documents filed by the Company under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (the "Exchange Act") subsequent to the date of this
Agreement which are deemed to be incorporated by reference therein. For purposes
of this Agreement, the term "Effective Time" means the date and time the
Registration Statement became effective.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter as of the date hereof and as of the
Closing Time and the Additional Closing Time, each as referred to in Section
2(c) hereof, and agrees with the Underwriter, as follows:
(i) Compliance with Registration Requirements. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the company, are
contemplated by the Commission.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the Closing
Time and the Additional Closing Time, the Registration Statement and
any amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus or
any amendments or supplements thereto were issued and at the Closing
Time and at the Additional Closing Time, included or will include an
untrue statement of a material fact or omitted or will 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.
If Rule 434 is used, the Company will comply with the requirements of
Rule 434 and the Prospectus shall not be "materially different", as
such term is used in Rule 434, from the prospectus included in the
Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Underwriter expressly for
use in the Registration Statement or the Prospectus.
Each prospectus used in connection with the offering and filed
as part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the 1933 Act
and the Prospectus delivered to the Underwriter for use in connection
with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act.
(iii) Financial Statements. The consolidated financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, together with the related schedules and
notes present fairly, in all material respects, the financial position
of the
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Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
except as otherwise disclosed in the Registration Statement and
Prospectus, said financial statements have been prepared in conformity
with United States generally accepted accounting principles ("U.S.
GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules included or incorporated by reference in the
Registration Statement present fairly, in all material respects, in
accordance with U.S. GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included or incorporated by reference in the Prospectus and
Registration Statement present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included or incorporated
by reference in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its share
capital.
(v) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as an exempted company in good
standing under the laws of Bermuda and has the necessary corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign company or corporation to transact business
and is in good standing in 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 where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each of Endurance
Specialty Insurance Ltd. ("Endurance Bermuda"), Endurance Reinsurance
Corporation of America ("Endurance U.S.") and Endurance Worldwide
Insurance Limited ("Endurance U.K.") (each, a "Designated Subsidiary"
and collectively, the "Designated Subsidiaries") has been duly
incorporated or organized and is validly existing as a company or
corporation in good standing under the laws of the jurisdiction of its
incorporation or organization and has the necessary corporate power to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed
in the Registration Statement, all of the issued and outstanding share
capital or capital stock of each such Designated Subsidiary has been
duly authorized and validly issued, is fully paid and non assessable
and is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of share capital or
capital stock of any Designated Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Designated Subsidiary. Except for
3
Endurance Worldwide Holdings Limited ("Endurance U.K. Holdings"),
Endurance U.S. Holdings Corp. ("Endurance U.S. Holdings"), Endurance
Services Ltd. ("Endurance Services") and Endurance Specialty Marketing
Corp. ("Endurance Marketing"), each of which are immaterial and are not
"significant subsidiaries" of the Company as such term is defined in
Rule 1-02 of Regulation S-X of the rules and regulations of the
Commission under the 1933 Act, the Designated Subsidiaries are the only
subsidiaries of the Company. Each of Endurance U.K. Holdings, Endurance
U.S. Holdings, Endurance Services and Endurance Marketing has been duly
organized and is validly existing as a company or corporation in good
standing under the laws of the jurisdiction of its organization or
incorporation.
(vii) Capitalization. The authorized, issued and outstanding
share capital of the Company as of September 30, 2004 conforms in all
material respects to the description thereof in the Prospectus. Based
solely on the Certified Registers of Members: (A) all of the currently
issued and outstanding shares of share capital of both the Company
(including the Securities) and the Designated Subsidiaries have been
duly and validly authorized and issued and are fully paid and
non-assessable (which term when used herein shall mean that no further
sums are required to be paid by the holders thereof in connection with
the issue of such shares) (collectively, the "Outstanding Shares"); (B)
all of the currently issued and outstanding shares of the subsidiaries
are held directly or indirectly by the Company and are free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and (C) none of the Outstanding Shares were issued in violation
of the preemptive or other similar rights of any member of the Company
or the Designated Subsidiaries. Except as set forth in the Prospectus,
there are no outstanding options, warrants or other rights requiring
the issuance of, and there are no commitments, plans or arrangements to
issue, any shares of share capital of the Company or any of its
subsidiaries or any security convertible into or exchangeable or
exercisable for any shares of share capital of the Company or any of it
subsidiaries. The form of certificates for the Securities conforms to
the requirements of the laws of Bermuda and the New York Stock Exchange
("NYSE").
(viii) Authorization and Execution of Agreement. This Agreement
has been duly authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The
Securities are validly issued, fully paid and non assessable; the
Ordinary Shares conform, in all material respects, to all statements
relating thereto contained in the Prospectus and such description
conforms, in all material respects, to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder.
(x) Absence of Defaults and Conflicts. Neither the Company
nor any of its Designated Subsidiaries is in violation of its charter,
memorandum of association, bye-laws, by-laws or similar incorporation
or organizational documents or in violation or default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
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 subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
under the material Agreements and Instruments that would not result in
a Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
in this Agreement, and in the Registration Statement and compliance by
the Company with its obligations under this Agreement do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of
4
any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
charter, memorandum of association, bye-laws, by-laws or similar
organizational documents of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or
any of their assets, properties or operations (except for such
violations that would not result in a Material Adverse Effect). As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness
that is material to the operations or financial results of the Company
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xi) Financial Assistance. On the date hereof and at the
Closing Time and the Additional Closing Time, the Company is and will
be in compliance with Section 39 and/or entitled to one or more of the
exclusions therefrom set forth in Section 39A of the Companies Act 1981
of Bermuda (the "Companies Act").
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any Designated Subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or any Designated Subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened or against the Company or any
subsidiary or the properties or assets thereof, which is required to be
disclosed in the Registration Statement (other than as disclosed
therein), or which would reasonably be expected to result in a Material
Adverse Effect, or which would reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in
this Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of
which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, would not reasonably be
expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described or filed as required.
(xv) Possession of Intellectual Property. The Company and the
Designated Subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them except where the failure
to own or possess, or to be able to acquire such Intellectual Property,
would not have a Material Adverse Effect, and neither the Company nor
any of the Designated Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to
5
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its Designated Subsidiaries therein,
and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
exemption, qualification or decree of, any court or governmental
authority or agency or any sub-division thereof is necessary or
required for the performance by the Company of its obligations
hereunder, in connection with the offering or sale of the Securities
under this Agreement or the consummation of the transactions
contemplated by this Agreement, except (i) such as have been already
obtained or as may be required under the 1933 Act and state securities
or blue sky laws, (ii) such as have been obtained from the Bermuda
Monetary Authority and (iii) the Prospectus will be filed at the
Registrar of Companies in Bermuda pursuant to the laws of Bermuda.
(xvii) Licenses and Permits. Each of the Company and its
subsidiaries possesses all consents, authorizations, approvals, orders,
licenses, certificates, or permits issued by any regulatory agencies or
bodies (collectively, "Permits") which are necessary to conduct the
business now conducted by it as described in the Prospectus, except
where the failure to possess such Permits, individually or in the
aggregate, would not have a Material Adverse Effect; all of such
Permits are valid and in full force and effect, except where the
invalidity of such Permits or the failure to be in full force and
effect, individually or in the aggregate, would not have a Material
Adverse Effect. There is no pending, or to the Company's knowledge,
threatened action, suit, proceeding or investigation against or
involving the Company and its subsidiaries (and the Company knows of no
reasonable basis for any such action, suit, proceeding or
investigation) that individually or in the aggregate would reasonably
be expected to lead to the revocation, modification, termination,
suspension or any other material impairment of the rights of the holder
of any such Permit which revocation, modification, termination,
suspension or other material impairment would have a Material Adverse
Effect. Except as otherwise described in the Prospectus, no insurance
regulatory authority has issued to the Company or any Designated
Subsidiary any order impairing, restricting or prohibiting (A) the
payment of dividends by the Company or any of its Designated
Subsidiaries, (B) the making of a distribution on any Designated
Subsidiary's capital stock, (C) the repayment to the Company of any
loans or advances to any Designated Subsidiaries from the Company or
(D) the transfer of any Designated Subsidiaries property or assets to
the Company or any other subsidiary of the Company.
(xviii) Compliance with Applicable Laws. Neither the Company nor
any of its Designated Subsidiaries is in violation or default of any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency or other governmental body
having jurisdiction over the Company or any such Designated Subsidiary
or any of its properties, as applicable, except for such violations or
defaults which, individually or in the aggregate, would not have a
Material Adverse Effect.
(xix) Tax Liabilities and Reserves. Any tax returns required
to be filed by the Company or any of its subsidiaries in any
jurisdiction have been filed and any taxes, including any withholding
taxes, excise taxes, penalties and interest, assessments and fees and
other charges due or claimed to be due from such entities have been
paid, other than any of those being contested in good faith and for
which adequate reserves have been provided or any of those currently
payable without penalty or interest, except to the extent that the
failure to so file or pay would not result in a Material Adverse
Effect.
6
(xx) Internal Controls. The Company and the Designated
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general, or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxi) Property and Leases. Neither the Company nor any of its
Designated Subsidiaries hold title to any real property. All of the
leases and subleases under which the Company or any of its Designated
Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any Designated Subsidiary
has any notice of any claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such Designated Subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease, except where the failure to have such leases in full
force and effect or the failure to have any such notice of any such
claim would not, individually or in the aggregate, have a Material
Adverse Effect.
(xxii) Investment Company Act. The Company is not and, solely
after giving effect to the offer and sale of the Securities and the
application of the proceeds thereof as described under the caption "Use
of Proceeds" in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(xxiii) Stamp Duty, Excise Tax, Etc. Neither the Underwriter nor
any subsequent purchasers of the Securities (other than purchasers
resident in Bermuda for Bermuda exchange control purposes) is subject
to any stamp duty, transfer, excise or similar tax imposed in Bermuda
in connection with the issuance, offering or sale of the Securities to
the Underwriter or to any subsequent purchasers.
(xxiv) Currency Exchange Control. There are no currency
exchange control laws or withholding taxes, in each case of Bermuda,
that would be applicable to the payment of dividends on the Securities
by the Company (other than as may apply to residents of Bermuda for
Bermuda exchange control purposes).
(xxv) Registration Rights. Except as disclosed in the
Prospectus and the Registration Statement, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxvi) No Ratings Downgrade. The Company has no knowledge of
any threatened or pending downgrading of any of its or its
subsidiaries' financial strength rating by Standard & Poor's Rating
Services, Xxxxx'x Investor Service and A.M. Best Company Inc., the only
"nationally recognized statistical rating organizations," as such term
is defined for purposes of Rule 463(g)(2) under the 1933 Act which
currently has publicly released a rating of the financial strength of
the Company or any of its subsidiaries.
(xxvii) Listing Approval. The Securities have been approved for
listing on the NYSE.
7
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder represents and warrants, severally and not jointly and
solely with respect to itself, to the Underwriter as of the date hereof, as of
the Closing Time and the Additional Closing Time, referred to in Section 2(c)
hereof, and agrees with the Underwriter, as follows:
(i) Accurate Disclosure. (A) The Registration Statement, when it
became effective, did not contain and, as amended or supplemented, if
applicable, and at the Closing Time and the Additional Closing Time
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties set forth in this
Section 1(b)(i) are limited to statements or omissions made in reliance
on information furnished in writing by or on behalf of such Selling
Shareholder expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto); it is understood and agreed that the only written information
furnished to the Company by each Selling Shareholder expressly for use
in the Registration Statement, and the Prospectus is the information
relating to such Selling Shareholder set forth under the caption
"Selling Shareholders" therein (but not the percentage set forth
therein). Such Selling Shareholder is not prompted to sell the
Securities to be sold by such Selling Shareholder hereunder by any
information concerning the Company or any subsidiary of the Company
which is not set forth in the Prospectus.
(ii) Authorization of this Agreement. This Agreement has been
duly authorized, executed and delivered by or on behalf of such Selling
Shareholder.
(iii) Noncontravention. The execution and delivery of this
Agreement and the sale and delivery of the Securities to be sold by
such Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by such Selling Shareholder with its
obligations hereunder (A) do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by such Selling Shareholder or any property or assets of
such Selling Shareholder pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, (B) nor will
such action result in any violation of the provisions of the charter or
by-laws or other organizational instrument of such Selling Shareholder
or any applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over such Selling
Shareholder or any of its properties, except, in the case of clause
(A), as would not, individually or in the aggregate, result in a
Material Adverse Effect or have a material adverse effect on the
ability of such Selling Shareholder to consummate the offering of the
Securities or otherwise perform its obligations under this Agreement.
(iv) Certificates Suitable for Transfer. The Securities to be
sold by such Selling Shareholder pursuant to this Agreement will, at
the Closing Time and the Additional Closing Time, be certificated
securities in registered form and will not be held in any securities
account or by or through any securities intermediary within the meaning
of the Uniform Commercial Code as in effect in the State of New York
(the "UCC"). Certificates for all of the Securities to be sold
8
by such Selling Shareholder pursuant to this Agreement, in suitable
form for transfer by delivery or accompanied by duly executed and
effective instruments of transfer or assignment indorsed to the
Underwriter or in blank with signatures guaranteed, will be delivered
at the Closing Time and the Additional Closing Time to the Underwriter
pursuant to this Agreement.
(v) Valid Title. Such Selling Shareholder has, and at the Closing
Time and the Additional Closing Time will have, valid title to the
Securities to be sold by it free and clear of all security interests,
claims, liens, equities or other encumbrances and the requisite
corporate power and authority, and all authorization and approval
required by law, except such as may be required under the 1933 Act,
state securities laws or required by the Bermuda Monetary Authority, to
enter into this Agreement and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder.
(vi) Delivery of Securities. Upon payment for the Securities to
be sold by such Selling Shareholder pursuant to this Agreement,
delivery of such Securities, as directed by the Underwriter, to Cede &
Co. ("Cede") or such other nominee as may be designated by the
Depository Trust Company ("DTC"), registration of such Securities in
the name of Cede or such other nominee and the crediting of such Shares
on the books of DTC to securities accounts of the Underwriter (assuming
that neither DTC nor the Underwriter has notice of any adverse claim
(within the meaning of Section 8-105 of the UCC to such Securities),
(A) DTC shall be a "protected purchaser" of such Securities within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the
UCC, the Underwriter will acquire a valid security entitlement in
respect of such Securities and (C) no action based on any "adverse
claim", within the meaning of Section 8-102 of the UCC, to such
Securities may be asserted against the Underwriter with respect to such
security entitlement; for purposes of this representation, such Selling
Shareholder may assume that when such payment, delivery and crediting
occur, (x) such Securities will have been registered in the name of
Cede or another nominee designated by DTC, in each case on the
Company's share registry in accordance with its certificate of
incorporation, bylaws and applicable law, (y) DTC will be registered as
a "clearing corporation" within the meaning of Section 8-102 of the UCC
and (z) appropriate entries to the accounts of the Underwriter on the
records of DTC will have been made pursuant to the UCC.
(vii) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which would be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(viii) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Shareholder of its obligations hereunder, or in connection with the
sale and delivery of the Securities to be sold by such Selling
Shareholder hereunder or the consummation of the transactions
contemplated by this Agreement, except (A) such as may have previously
been made or obtained or as may be required under the 1933 Act or state
securities laws, and (B) such as may be required and obtained from the
Bermuda Monetary Authority.
(ix) No Association with NASD. Other than as disclosed to the
Underwriter in writing, neither such Selling Shareholder nor any of its
affiliates directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or is a
person associated with (within the meaning of Article I (dd) of the
By-laws of the National Association of Securities Dealers, Inc. (the
"NASD")), any member firm of the NASD.
9
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Underwriter or to
counsel for the Underwriter shall be deemed a representation and warranty by the
Company to the Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the Underwriter or to counsel for the Underwriter pursuant to the
terms of this Agreement shall be deemed a representation and warranty by such
Selling Shareholder to the Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each Selling Shareholder agrees to sell to the Underwriter, and the
Underwriter agrees to purchase from such Selling Shareholder, at $32.70 per
share, that number of Initial Securities set forth in Schedule A under the
column "Number of Initial Securities" opposite the name of such Selling
Shareholder.
(b) Additional Securities. In addition, effective upon and subject to
the condition of receipt of the Resale Notice, and on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, each Selling Shareholder agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from such Selling
Shareholder, at $32.70 per share less an amount per share equal to any dividends
or distributions declared by the Company and payable on the Initial Securities
but not payable on the Additional Securities, that number of Additional
Securities set forth in Schedule A under the column "Number of Additional
Securities" opposite the name of such Selling Shareholder.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., or at such other place as shall be
agreed upon by the Underwriter and the Company, at 9:00 A.M. (Eastern time) on
the third business day after the date hereof, or such other time not later than
ten business days after such date as shall be agreed upon by the Underwriter and
the Company (such time and date of payment and delivery being herein called
"Closing Time"). The date of payment and delivery for the Additional Securities
(the "Additional Closing Time") shall be determined by the Underwriter, but
shall not be prior to the Closing Time, as hereinafter defined. Payment of the
purchase price for and delivery of certificates for, the Additional Securities
shall be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Underwriter and the Company, and specified in the Resale
Notice.
Payment shall be made to the Selling Shareholders by wire transfer of
immediately available funds to bank accounts designated by the Selling
Shareholders, against delivery to the Underwriter of certificates for the
Initial or Additional Securities, as the case may be, to be purchased by it.
Each Selling Shareholder agrees that, during the period beginning from
the date of the final Prospectus and continuing to and including the date 45
days after the date of such Prospectus (the "Lock-Up Period"), it will not,
without the prior written consent of the Underwriter, directly or indirectly,
offer, sell, contract to sell, pledge, grant any option to purchase, make any
short sale or otherwise dispose of any Ordinary Shares, or any options, rights
or warrants to purchase any Ordinary Shares, or any securities convertible into,
exchangeable or exercisable for or that represent the right to receive Ordinary
Shares, whether now owned or hereinafter acquired by the Selling Shareholder
(including holding as a custodian) or with respect to which the Selling
Shareholder has or hereafter acquires beneficial ownership within the rules and
regulations of the Commission (the "Lock-Up Agreement"), other than its
disposition of the Initial Securities and the Additional Securities to the
Underwriter in accordance with the terms of this Agreement.
10
The foregoing restrictions are expressly agreed to preclude the Selling
Shareholder from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Selling Shareholder's Ordinary Shares even if such Ordinary
Shares would be disposed of by someone other than the Selling Shareholder. Such
prohibited hedging or other transactions would include without limitation any
short sale or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any of the Selling
Shareholder's Ordinary Shares or with respect to any security that includes,
relates to, or derives any significant part of its value from such Ordinary
Shares.
Notwithstanding the foregoing: (i) if the Selling Shareholder is a
partnership, the partnership may transfer any Ordinary Shares (or any securities
convertible into, exercisable for, or exchangeable for Ordinary Shares) to a
partner of such partnership; (ii) if the Selling Shareholder is an individual,
he or she may transfer Ordinary Shares (or any securities convertible into,
exercisable for, or exchangeable for Ordinary Shares) by gift, will, or
intestate succession to his or her immediate family or to a trust the
beneficiaries of which are exclusively the Selling Shareholder and/or a member
or members of his or her immediate family (for purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor); and (iii) the Selling Shareholder may transfer any
Ordinary Shares (or any securities convertible into, exercisable for, or
exchangeable for Ordinary Shares) to an affiliate thereof (as such term is
defined in Rule 144(a) of the regulations under the Securities Act of 1933);
provided, however, that in any such case it shall be a condition to the transfer
that (a) each transferee execute an agreement stating that the transferee is
receiving and holding the Ordinary Shares (or any securities convertible into,
exercisable for, or exchangeable for Ordinary Shares) subject to the provisions
of the Lock-Up Agreement, and there shall be no further transfer of such
Ordinary Shares (or any securities convertible into, exercisable for, or
exchangeable for Ordinary Shares) except in accordance with the Lock-Up
Agreement, (b) each transferee certifies in writing to the Underwriter that such
transferee is in compliance with the terms of the Lock-Up Agreement as if such
transferee had been bound by the Lock-Up Agreement from the original date of the
Lock-Up Agreement and (c) no filing by any party (transferee or transferor)
under Section 16(a) of or Regulation 13D-G under the Exchange Act shall be
required or shall be made voluntarily in connection with such transfer or
distribution.
The Selling Shareholder also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the Selling Shareholder's Ordinary Shares except in compliance
with the foregoing restrictions.
(d) Denominations; Registration. Certificates for the Initial
Securities and Additional Securities, as applicable, shall be in such
denominations and registered in such names as the Underwriter may request in
writing at least one full business day before the Closing Time or the Additional
Closing Time, as applicable.
(e) U.K. Selling Restrictions. The Underwriter represents, warrants and
agrees that: (i) it has not offered or sold and, prior to the expiry of a period
of six months from the closing of the offering of the Ordinary Shares, will not
offer or sell any Ordinary Shares to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has only communicated or
caused to be communicated and will only communicate or cause to be communicated
any invitation or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act 2000 (the
"FSMA")) received by it in connection with the issue or sale of any Ordinary
Shares in circumstances in which section 21(1) of the FSMA does not apply to the
Company; and (iii) it has
11
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Ordinary Shares in, from or otherwise
involving the United Kingdom.
SECTION 3. Covenants of the Company. The Company covenants with
the Underwriter as follows:
(a) Filings with the Commission. The Company will file the Prospectus
in a form approved by the Underwriter with the Commission pursuant to Rule 424
under the 1933 Act not later than the close of business on the second business
day following the date of determination of the public offering price of the
Securities or, if applicable, such earlier time as may be required by Rule
424(b) and Rule 430A under the 1933 Act; and the Company will furnish copies of
the Prospectus to the Underwriter in New York City prior to 9:00 a.m., New York
City time, on the second business day next succeeding the date of this Agreement
in such quantities as the Underwriter may reasonably request.
(b) Amendments or Supplements. Before filing any amendment or
supplement to the Registration Statement or the Prospectus, the Company will
furnish to the Underwriter and counsel for the Underwriter a copy of the
proposed amendment or supplement for review and will not file any such proposed
amendment or supplement to which the Underwriter reasonably objects.
(c) Notice to the Underwriter. During the period when a prospectus is
required by the 1933 Act or the Exchange Act to be delivered in connection with
sales of the Securities (the "Prospectus Delivery Period"), the Company will
advise the Underwriter promptly, and confirm such advice in writing, (i) when
any post-effective amendment to the Registration Statement has been filed or
becomes effective; (ii) when any supplement to the Prospectus or any amendment
to the Prospectus has been filed; (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or the receipt of any comments from the Commission relating to the
Registration Statement or any other request by the Commission for any additional
information; (iv) of the issuance by the Commission of any order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Prospectus or the initiation or threatening of any proceeding for that
purpose; and (v) of the receipt by the Company of any notice with respect to any
suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its reasonable best efforts to prevent the
issuance of any such order suspending the effectiveness of the Registration
Statement, preventing or suspending the use of the Prospectus or suspending any
such qualification of the Securities and, if any such order is issued, will
obtain as soon as reasonably possible the withdrawal thereof.
(d) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriter and counsel for the Underwriter, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts. The copies of the Registration Statement and each amendment thereto
furnished to the Underwriter will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
12
(e) Delivery of Prospectus. The Company will, prior to 9:00 a.m. on the
second business day next succeeding the date of this Agreement and from time to
time, furnish to the Underwriter, without charge during the Prospectus Delivery
Period, such number of copies of the Prospectus (as amended or supplemented) as
the Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S T.
(f) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time during the Prospectus Delivery Period, any event shall occur or condition
shall exist as a result of which it is necessary, in the reasonable opinion of
counsel for the Underwriter or counsel for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of such counsel, at any such time to amend the Registration Statement or amend
or supplement any Prospectus in order to comply with the requirements of the
1933 Act, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriter such number of copies of such amendment or supplement as the
Underwriter may reasonably request.
(g) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriter, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Underwriter may reasonably designate
and to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign company or corporation
or other entity or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement.
(h) Rule 158. The Company will timely file such reports pursuant to the
Exchange Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(i) Restriction on Sale of Securities. During a period of 45 days from
the date of the Prospectus, the Company will not, without the prior written
consent of the Underwriter, (i) directly or indirectly, offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of any Ordinary Shares, or any options, rights or warrants to purchase
any Ordinary Shares, or any securities convertible into, exchangeable or
exercisable for or that represent the right to receive Ordinary Shares, or file
any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) engage in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Ordinary Shares, whether any such hedging or transaction
described in clause (i) or (ii) above is to be settled by delivery of Ordinary
Shares or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to the Securities to be sold hereunder. The Company may,
however, grant options to purchase Ordinary Shares and restricted share units,
and issue Ordinary Shares upon the conversion of outstanding Class A Shares, par
value U.S.
13
$1.00 per share of the Company ("Class A Shares"), the exercise of warrants for
Ordinary Shares or Class A Shares, or the exercise of outstanding options or
restricted share units under the existing stock option plan (it being understood
that any Ordinary Shares so issued to any of the persons listed in Schedule B
hereto shall be subject to the terms and restrictions of the Lock-up Agreement
as attached hereto as Exhibit E).
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the Exchange Act,
will file all documents required to be filed with the Commission pursuant to the
Exchange Act within the time periods required by the Exchange Act.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriter of this
Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the fees
and disbursements of the Company's counsel, accountants and other advisors, (iv)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto (such fees and disbursements of counsel not to exceed $10,000), (v) the
printing and delivery to the Underwriter of copies of each preliminary
prospectus, any Term Sheets and the Prospectus and any amendments or supplements
thereto, (vi) the preparation, printing and delivery to the Underwriter of
copies of the Blue Sky Survey and any supplement thereto, (vii) the cost of
printing certificates representing the Securities, (viii) the fees and expenses
of any transfer agent or registrar for the Securities, (ix) the fees and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Securities,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and a proportional share of the cost of any
aircraft chartered in connection with the road show, (xi) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriter in connection with, the review by the NASD of the terms of the sale
of the Securities, provided, however, except as provided in this Section and
Sections 6 and 9(b) hereof, the Underwriter will pay all of its own costs and
expenses, including the fees of its counsel, stock transfer taxes on resale of
any of the Securities by it, and any advertising expenses connected with any
offers it may make.
(b) Expenses of Selling Shareholders. The Selling Shareholders will pay
all expenses incident to the performance of their obligations hereunder, and the
consummation of the transactions contemplated by, this Agreement which are not
otherwise specifically provided for in this Section, including (i) any stamp
duties, capital duties and stock transfer taxes, if any, payable upon the sale
of the Securities to the Underwriter and (ii) the fees and disbursements of
their counsel and other advisors.
(c) Allocation of Expenses. The provisions of this Section shall not
supersede or otherwise affect any agreement between the Company and any Selling
Shareholder with respect to the sharing of such costs and expenses.
(d) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company shall
14
reimburse the Underwriter for all of its out of pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The
obligations of the Underwriter hereunder are subject to the accuracy of the
representations and warranties of the Company and each Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or by or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement
has become effective, and at Closing Time and the Additional Closing Time no
stop order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefore initiated or threatened
by the Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriter. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been filed
with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter
shall have received (i) the favorable opinions and negative assurance letter,
dated as of Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, outside
counsel for the Company, in form and substance reasonably satisfactory to
counsel for the Underwriter to the effect set forth in Exhibit X-0, Xxxxxxx X-0
and Exhibit A-3 hereto and (ii) the favorable opinion, dated as of the Closing
Time, of Xxxx X. Del Col, General Counsel of the Company, in form and substance
reasonably satisfactory to counsel for the Underwriter, to the effect set forth
in Exhibit A-4.
(c) Opinion of Bermuda Counsel for Company. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of Xxxxxxx Xxxxxxxx & Xxxxxx, special Bermuda counsel for the Company, in form
and substance reasonably satisfactory to counsel for the Underwriter to the
effect set forth in Exhibit B hereto.
(d) Opinion of United Kingdom Counsel for Company. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of Ashurst, special United Kingdom counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriter to the effect
set forth in Exhibit C hereto.
(e) Opinion of Counsel for Selling Shareholders. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of counsel for each of the Selling Shareholders, in form and substance
reasonably satisfactory to counsel for the Underwriter, to the effect set forth
in Exhibit D hereto.
(f) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., U.S. counsel for the Underwriter,
with respect to the matters set forth in clause (h) and the first and final
paragraphs of Exhibit A-2 hereto. In giving such opinion LeBoeuf, Lamb, Xxxxxx &
XxxXxx, L.L.P. may limit its opinion to the law of the State of New York and the
federal law of the United States and the General Corporation Law of the State of
Delaware. Such counsels for the Underwriter may also state
15
that, insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(g) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriter shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to the Company's knowledge, threatened by the
Commission.
(h) Certificate of Selling Shareholders. At Closing Time, the
Underwriter shall have received a certificate of a duly authorized officer of
each Selling Shareholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of such Selling Shareholder contained in Section
1(b) hereof are true and correct in all respects with the same force and effect
as though expressly made at and as of Closing Time and (ii) such Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(i) Accountant's Comfort Letter. At the Closing Time, the Underwriter
shall have received from Ernst & Young a letter dated such date, in form and
substance satisfactory to the Underwriter, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus, with a
specified date not more than three business days prior to Closing Time.
(j) Lock-up Agreements. At the Closing Time, the Underwriter shall have
received a Lock-Up Agreement substantially in the form of Exhibit E hereto
signed by the persons listed on Schedule B hereto.
(k) Delivery of Prospectus. The Company shall have complied with the
provisions of Section 3(d) hereof with respect to the furnishing of the
prospectus on the business day next succeeding the date of this Agreement.
(l) Conditions to the Purchase of the Additional Securities. It shall
be a condition to the purchase and sale of the Additional Securities that the
Underwriter shall have orally notified the Selling Shareholders and the Company
(the "Resale Notice") that the Underwriter has resold at least 3,800,000 of the
Initial Securities to purchasers who are not associates (as defined in Section
422(4) of the FSMA) of the Underwriter. Following receipt of the Resale Notice,
the representations and warranties of the Company and the Selling Shareholders
contained herein and the statements in any certificates furnished by the Company
or any subsidiary of the Company or the Selling Shareholders hereunder shall be
true and correct as of the Additional Closing Time. Each of the parties hereto
agrees and acknowledges that in the event the Resale Notice is received in
sufficient time on the day of the Closing Time for the Additional Closing Time
to occur on the same day, no additional documentation will be required as a
condition to the purchase and sale of the Additional Securities. In the event
that the Resale Notice is not
16
received in time for such condition to be met, as a condition to the purchase
and sale of the Additional Securities, at the Additional Closing Time, the
Underwriter shall have received:
(i) Officers' Certificate. A certificate, dated the day of the
Additional Closing Time, of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company confirming that the certificate delivered at the Closing Time
pursuant to Section 5(g) hereof remains true and correct as of such
Additional Closing Time.
(ii) Certificate of Selling Shareholders. A certificate, dated
the day of the Additional Closing Time, of a duly authorized officer of
each Selling Shareholder confirming that the certificate delivered at
the Closing Time pursuant to Section 5(h) hereof remains true and
correct as of the Additional Closing Time.
(iii) Opinion of Counsel for Company. The favorable opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, outside counsel for the
Company, together with the favorable opinion of Xxxx X. Del Col,
General Counsel of the Company, Xxxxxxx Xxxxxxxx & Xxxxxx, special
Bermuda counsel for the Company, and Ashurst, special United Kingdom
counsel for the Company, each in form and substance reasonably
satisfactory to counsel for the Underwriters, dated the day of the
Additional Closing Time, relating to the Additional Securities and
otherwise to the same effect as the opinion required by Sections 5(b),
5(c) and 5(d) hereof.
(iv) Opinion of Counsel for Selling Shareholders. The favorable
opinion of counsel for each of the Selling Shareholders, dated the day
of the Additional Closing Time, relating to the Additional Securities
to be purchased at the Additional Closing Time and otherwise to the
same effect as the opinion required by Section 5(e) hereof.
(v) Opinion of Counsel for Underwriters. The favorable opinions
of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., U.S. counsel for the
Underwriters, dated the day of the Additional Closing Time, relating to
the Additional Securities to be purchased at the Additional Closing
Time and otherwise to the same effect as the opinion required by
Section 5(f) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young, in
form and substance satisfactory to the Lead Representatives and dated
the day of the Additional Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (i) of this Section, except that the specified date referred
to shall be a date not more than five days prior to the Additional
Closing Time.
(m) Additional Documents. At the Closing Time and the Additional
Closing Time, counsel for the Underwriter shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Initial Securities and
Additional Securities, as the case may be, as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and each Selling Shareholder in connection with the
issuance and sale of the Initial Securities and Additional Securities, as the
case may be, as herein contemplated shall be reasonably satisfactory in form and
substance to the Underwriter and counsel for the Underwriter.
(n) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriter by notice to the Company and each
Selling Shareholder at any time at or prior to the Closing Time or the
Additional Closing Time and such termination shall be without liability of any
party to any other party
17
except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriter.
(i) The Company will indemnify and hold harmless the Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
the Underwriter may become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse the Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter through for use therein.
(ii) Each Selling Shareholder will, severally and not jointly,
indemnify and hold harmless the Underwriter against any losses, claims, damages
or liabilities, joint or several, to which the Underwriter may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and will
reimburse the Underwriter for any legal or other expenses reasonably incurred by
the Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred, but only with reference to information
relating to such Selling Shareholder furnished in writing by or on behalf of
such Selling Shareholder expressly for use in the any preliminary prospectus,
the Registration Statement, or the Prospectus, or any amendment or supplement
thereto (it being understood and agreed that the only such information furnished
by any such Selling Shareholder consists of the information about such Selling
Shareholder under the caption "Selling Shareholders" in the Prospectus (but not
the percentage set forth therein)); provided, however, that with respect to its
indemnification obligations hereunder no such Selling Shareholder shall be
required to pay an amount in excess of the net proceeds (before deducting
expenses) received by such Selling Shareholder from the Securities sold by it
hereunder.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders. The Underwriter will indemnify and hold harmless the Company and
each Selling Shareholder against any losses, claims, damages or liabilities to
which the Company may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement, or alleged untrue statement or omission, or alleged
omission was made in any preliminary prospectus, the Registration Statement or
the Prospectus or
18
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(i) Actions against Parties; Notification. Promptly after receipt by an
indemnified party under subsection (a) and (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection to the extent it is not materially prejudiced as a result thereof. In
the case of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by the Underwriter, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Company and the Selling Shareholders. In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(ii) Control Persons. The obligations of the Company and the Selling
Shareholders under this Section 6 shall be in addition to any liability which
the Company and the respective Selling Shareholders may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter or within the meaning of the Act and the obligations of the
Underwriter under this Section 6 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company or any Selling Shareholder within the meaning of
the Act.
19
SECTION 7. Contribution.
If the indemnification provided for in Section 6 is unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
Section 6, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriter on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under Section 6I above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriter on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriter on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and each Selling Shareholder
bear to the total underwriting discounts and commissions received by the
Underwriter, in each case as set forth in the table on the cover page of the
Prospectus (for purposes of this Section 7, the benefit to the Company shall be
deemed to equal the total net proceeds of the offering of the Securities (before
deducting expenses)). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Shareholders on the one hand
or the Underwriter on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Notwithstanding the provisions of this Section 7, no Selling
Shareholder shall be required to pay an amount in excess of the net proceeds
(before deducting expenses) received by such Selling Shareholders from the
shares sold by it hereunder.
The Company, the Selling Shareholders and the Underwriter agree that it
would not be just and equitable if contributions pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 7. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this Section 7 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 7, each person, if any, who controls the Underwriter within the
meaning of the Act shall have the same rights to contribution as the
Underwriter, and each officer and director of the Company, and each person, if
any, who controls the Company or any Selling Shareholder within the meaning of
the Act or shall have the same rights to contribution as the Company or any
Selling Shareholder, as the case may be. The Underwriter's obligations in this
Section 7 to contribute are several in proportion to their respective
underwriting obligations and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the
20
Company or any of its subsidiaries or any Selling Shareholder submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company or any Selling Shareholder, and shall survive
delivery of the Securities to the Underwriter.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriter may terminate this Agreement,
by notice to the Company and each Selling Shareholder, at any time at or prior
to the Closing Time or, as applicable, the Additional Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus (exclusive of any
supplement thereto), any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or in the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriter, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Initial Securities and
Additional Securities, as the case may be, or (iii) if trading in any securities
of the Company has been suspended or materially limited by the Commission or the
NYSE, or if trading generally on the American Stock Exchange or the NYSE or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, or
(iv) if a banking moratorium has been declared by either federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to the Underwriter at Xxxxxxx, Xxxxx & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Registration Department;
notices to the Company shall be directed to it at Xxxxxxxxx Xxxxx, 00 Xxxxx Xxx
Xxxx, Xxxxxxxx XX 00, Bermuda, attention: General Counsel; and notices to the
Selling Shareholders shall be directed to Aon Corporation, 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxx, Xx 00000, attention: General Counsel.
SECTION 11. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriter, the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm,
company or corporation, other than the Underwriter, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriter, the Company and the Selling Shareholders
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm, company or
21
corporation. No purchaser of Securities from the Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW; TIME APPOINTMENT OF AGENT FOR SERVICE.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
EACH OF THE PARTIES HERETO IRREVOCABLY (i) AGREES THAT ANY LEGAL SUIT,
ACTION OR PROCEEDING AGAINST THE COMPANY BROUGHT BY ANY UNDERWRITER OR BY ANY
PERSON WHO CONTROLS ANY UNDERWRITER ARISING OUT OF OR BASED UPON THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN ANY UNITED STATES
FEDERAL OR STATE COURT IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, STATE
OF NEW YORK (A "NEW YORK COURT"), (ii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH PROCEEDING AND (iii) SUBMITS TO THE EXCLUSIVE
JURISDICTION OF SUCH NEW YORK COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE
COMPANY EXPRESSLY CONSENTS TO THE JURISDICTION OF ANY NEW YORK COURT IN RESPECT
OF ANY SUCH ACTION, AND WAIVES ANY OTHER REQUIREMENTS OF OR OBJECTIONS TO
PERSONAL JURISDICTION WITH RESPECT THERETO.
The Company hereby irrevocably appoints CT Corporation System in New
York City as its agent for service of process in any suit, action or proceeding
described in the preceding paragraph. The Company agrees that service of process
in any such suit, action or proceeding may be made upon it at the office of its
agent. The Company waives, to the fullest extent permitted by law, any other
requirements of or objections to personal jurisdiction with respect thereto. The
Company represents and warrants that its agent has agreed to act as agent for
service of process, and agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect.
SECTION 13. Waiver of Immunity. To the extent that the Company or
any Selling Shareholder has or hereafter may acquire any immunity (sovereign or
otherwise) from any legal action, suit or proceeding, from jurisdiction of any
court of from set-off or any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise) with
respect to itself or any of its property, it irrevocable waives, to the fullest
extent permitted by law, such immunity in respect of its obligations under this
Agreement.
SECTION 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
[The remaining page intentionally left blank.]
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriter, the Company and the Selling Shareholders in accordance
with its terms.
Very truly yours,
ENDURANCE SPECIALTY HOLDINGS LTD.
By: /s/ Xxxx X. Del Col
----------------------------------
Name: Xxxx X. Del Col
Title: General Counsel & Secretary
[Intentionally Left Blank]
23
AON CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
VIRGINIA SURETY COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
COMBINED INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
AON WARRANTY SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
RESOURCE LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
LONDON GENERAL INSURANCE COMPANY LIMITED
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman
24
COMBINED LIFE ASSURANCE COMPANY OF
EUROPE LTD.
By: /s/ X. Xxxxxxxx
--------------------------------
Name: X. Xxxxxxxx
Title: Director
[Intentionally Left Blank]
25
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX, XXXXX & CO.
By: /s/ Xxxxxxx, Sachs & Co.
-----------------------------------
(XXXXXXX, XXXXX & CO.)
26
SCHEDULE A
Number of Number of
Name of Selling Shareholder Initial Securities Additional Securities
--------------------------- ------------------ ---------------------
Aon Corporation 232,545 147,306
Aon Warranty Services, Inc. 351,839 222,873
Combined Insurance Company of America 792,652 502,107
Combined Life Assurance Company of Europe Limited 45,915 29,085
London General Insurance Company Limited 2,244 1,421
Resource Life Insurance Company 91,830 58,170
Virginia Surety Company, Inc. 4,482,975 2,839,038
--------- ---------
Total 6,000,000 3,800,000
========= =========
Schedule A-1
SCHEDULE B
LIST OF ADDITIONAL PERSONS AND ENTITIES
SUBJECT TO LOCK-UP
Capital Z Financial Services Fund II, LP
Capital Z Financial Services Private Fund II, L.P.
Capital Z Management LLC
Capital Z Investments, LLC
Perry Partners International, Inc.
Perry Partners, LP
Xxxxxx X. Xxx (Alternative) Cayman Fund V, L.P.
Xxxxxx X. Xxx (Alternative) Fund V, L.P.
Xxxxxx X. Xxx (Alternative) Parallel Fund V,L.P.
Xxxxxx X. Xxx Investors Limited Partnership
THL Advisors (Alternative) V,L.P.
TPG Dutch Parallel III, C.V.
TPG Endurance Investments (Cayman), L.P.
TPG Endurance Partners (Cayman), L.P.
Schedule B-1
