Exhibit 1.1
Execution Copy
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ALLEGHANY CORPORATION
(A Delaware corporation)
985,000 Shares of 5.75% Mandatory Convertible Preferred Stock
PURCHASE AGREEMENT
Dated: June 19, 2006
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ALLEGHANY CORPORATION
(A Delaware corporation)
985,000 Shares of 5.75% Mandatory Convertible Preferred Stock
(Par Value $1.00 Per Share)
PURCHASE AGREEMENT
June 19, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
as Representative of the several Underwriters
4 World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Alleghany Corporation, a Delaware corporation (the "Company"), confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx is acting as representative (in such capacity,
the "Representative"), with respect to (i) the sale by the Company of 985,000
shares of its 5.75% mandatory convertible preferred stock, par value $1.00 per
share ("Preferred Stock") and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of shares of Preferred Stock set
forth in Schedule A hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 147,000 additional shares of
Preferred Stock to cover overallotments, if any. The aforesaid 985,000 shares of
Preferred Stock (the "Initial Securities") to be purchased by the Underwriters
and all or any part of the 147,000 shares of Preferred Stock subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") an automatic shelf registration statement on Form S-3 (No.
333-134996), and has also filed the related Preliminary Prospectuses, pursuant
to the Securities Act of 1933, as amended (the "1933 Act") and the rules and
regulations of the Commission thereunder (the "1933 Act Regulations"). Such
registration statement covers the registration of the Securities under the 1933
Act. Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430B
("Rule 430B") of the 1933 Act Regulations and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations. Any information included in such
prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of and included in such
registration statement pursuant to Rule 430B is referred to as "Rule 430B
Information." Each prospectus used in connection with the offering of the
Securities that omitted the Rule 430B Information is herein called a
"Preliminary Prospectus." Such registration statement, at any given time,
including the amendments thereto to such time, the exhibits and any schedules
thereto at such time, the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act at such time and the documents
otherwise deemed to be a part thereof or included therein by 1933 Act
Regulations, is herein called the "Registration Statement." The Registration
Statement at the time it originally became effective is herein called the
"Original Registration Statement." The final prospectus in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act at the time of the execution of this
Agreement and any Preliminary Prospectuses that form a part thereof, is herein
called the "Prospectus." For purposes of this Agreement, all references to the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any Preliminary Prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in or otherwise deemed by 1933 Act Regulations to be a part of or
included in the Registration Statement, any Preliminary Prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in or otherwise deemed by 1933 Act Regulations to be a
part of or included in the Registration Statement, such Preliminary Prospectus
or the Prospectus, as the case may be, in each case, to the extent not modified
or superseded at such time pursuant to the provisions of Rule 412 of the 1933
Act Regulations.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, the Applicable Time
defined in Section 1(a)(ii) hereof, as of the Closing Time referred to in
Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof, and agrees with each Underwriter, as follows:
(i) Status as a Well-Known Seasoned Issuer. (A) At the time of filing
the Original Registration Statement, (B) at the time of the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of
the 1933 Act (whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act
or form of prospectus), (C) at the time the Company or any person acting on
its behalf (within the meaning, for this clause only, of Rule 163(c) of the
1933 Act Regulations) made any offer relating to the Securities in reliance
on the exemption of Rule 163 of the 1933 Act Regulations and (D) at the
date hereof, the Company was and is a "well-known seasoned issuer" as
defined in Rule 405 of the 1933 Act Regulations ("Rule 405"), including not
having been and not being an "ineligible issuer" as defined in Rule 405.
The Registration Statement is an "automatic shelf registration statement,"
as defined in Rule 405, and the Securities, since their registration on the
Registration Statement, have been and remain eligible for registration by
the Company on a Rule 405 "automatic shelf registration statement." The
Company has not received from the Commission any notice pursuant to Rule
401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic
shelf registration statement form.
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At the time of filing the Original Registration Statement, at the
earliest time thereafter that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933
Act Regulations) of the Securities and at the date hereof, the Company was
not and is not an "ineligible issuer," as defined in Rule 405.
(ii) Compliance with Registration Requirements. The Original
Registration Statement became effective upon filing under Rule 462(e) of
the 1933 Act Regulations ("Rule 462(e)") on June 14, 2006, and any
post-effective amendment thereto also became effective upon filing under
Rule 462(e). 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, and any request on the part of
the Commission for additional information has been complied with.
Any offer that is a written communication relating to the Securities
made prior to the filing of the Original Registration Statement by the
Company, or any person acting on its behalf (within the meaning, for this
paragraph only, of Rule 163(c) of the 1933 Act Regulations) has been filed
with the Commission in accordance with the exemption provided by Rule 163
of the 1933 Act Regulations ("Rule 163") and otherwise complied with the
requirements of Rule 163, including without limitation the legending
requirement, to qualify such offer for the exemption from Section 5(c) of
the 1933 Act provided by Rule 163.
At the respective times the Original Registration Statement and each
amendment thereto became effective, at each deemed effective date with
respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act
Regulations and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations 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 such amendment or supplement was
filed with the Commission and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), 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.
As of the Applicable Time (as defined below), the Issuer General Use
Free Writing Prospectus(es) (as defined below) issued at or prior to the
Applicable Time and the Statutory Prospectus (as defined below) as of the
Applicable Time and the information included on Schedule F hereto, all
considered together (collectively, the "General Disclosure Package"), will
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
As of the time of the filing of the Final Term Sheet, the General
Disclosure Package, when considered together with the Final Term Sheet (as
defined in Section 3(b)) will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
As used in this subsection and elsewhere in this Agreement:
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"Applicable Time" means 7:00 A.M. New York time on June 20, 2006 or
such other time as agreed by the Company and the Representative.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433 of the 1933 Act Regulations ("Rule
433"), relating to the Securities that (i) is required to be filed with the
Commission by the Company, (ii) is a "road show that is a written
communication" within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission or (iii) is exempt from filing
pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, in
each case in the form filed or required to be filed with the Commission or,
if not required to be filed, in the form required to be retained in the
Company's records pursuant to Rule 433(g).
"Issuer General Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being specified in Schedule E hereto.
"Statutory Prospectus" as of any time means the prospectus relating to
the Securities that is included in the Registration Statement immediately
prior to that time, including any document incorporated by reference
therein and any preliminary or other prospectus deemed to be a part
thereof.
"Specified Issuer Free Writing Prospectus" means (i) any Issuer
General Use Free Writing Prospectus and (ii) the Final Term Sheet.
Each Specified Issuer Free Writing Prospectus, as of its issue date
and at all subsequent times through the completion of the public offer and
sale of the Securities or until any earlier date that the issuer notified
or notifies the Representative as described in Section 3(e), did not, does
not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or
the Prospectus including any document incorporated by reference therein and
any preliminary or other prospectus deemed to be a part thereof that has
not been superseded or modified.
Except for the Specified Issuer Free Writing Prospectuses and any
Permitted Free Writing Prospectus approved in accordance with Section 3(l),
neither the Company nor the Underwriters has created, authorized or
otherwise used, and neither of them will create, authorize or otherwise
use, any Issuer Free Writing Prospectus relating to the Securities. In
addition, neither the Company nor the Underwriters has prepared or
provided, by or on behalf of the Company, within the meaning of Rule
433(h)(3) of the 1933 Act Regulations, any written communication or
information, including any "issuer information," as defined in Rule
433(h)(2), as a result of which any "free writing prospectus," as defined
in Rule 405, is or will be required to be filed, or has been filed, with
the Commission by the Company.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement, the
Prospectus or any Specified Issuer Free Writing Prospectus made in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through the Representative expressly for use therein or to
the statements set forth in "Underwriting -- Selling Restrictions" in the
Prospectus.
Each Preliminary Prospectus (including the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto) complied when so filed in all material respects with the 1933 Act
Regulations and each Preliminary Prospectus and the
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Prospectus delivered to the Underwriters 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.
(iii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in or deemed to be a part of the Registration
Statement, the Preliminary Prospectus and the Prospectus, when they became
effective or at the time they were or hereafter are filed with the
Commission, (i) complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and (ii) when read together with the other
information (A) in the prospectus included as part of the Original
Registration Statement at the time the Original Registration Statement
became effective, (B) in the Preliminary Prospectus, as supplemented on
June 19, 2006, at the earlier of the time the Preliminary Prospectus, as so
supplemented, was first used and the Applicable Time and (C) in the
Prospectus at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), 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.
(iv) Independent Accountants. KPMG LLP, 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 and the 1933 Act Regulations.
(v) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules included in
the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement. All disclosures contained in the Registration Statement, the
General Disclosure Package or the Prospectus regarding "non-GAAP financial
measures" (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G of the Securities Exchange Act of 1934
("1934 Act") and Item 10 of Regulation S-K of the 1933 Act, to the extent
applicable.
(vi) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement, the
General Disclosure Package or 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) except for regular
dividends on the Company's common stock, par value $1.00 per share (the
"Common Stock"), in amounts per share consistent with past practice, there
has
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been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vii) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the General Disclosure Package and the Prospectus and to enter
into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign 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 reasonably be expected to result in a Material
Adverse Effect.
(viii) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each
a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the General Disclosure Package and 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 reasonably be expected to result in a Material
Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock of each such
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; and none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are the subsidiaries listed on Schedule C
hereto.
(ix) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the General Disclosure Package and
the Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the General Disclosure Package and the Prospectus or
pursuant to the exercise of convertible securities or options referred to
in the General Disclosure Package and the Prospectus). The shares of issued
and outstanding capital stock have been duly authorized and validly issued
and are fully paid and non-assessable; none of the outstanding shares of
capital stock was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) Authorization and Description of Common Stock. The description of
the Common Stock contained or incorporated by reference in the General
Disclosure Package and the Prospectus conforms in all material respects to
the rights set forth in the instruments defining the same. Upon issuance
and delivery of the Securities in accordance with this Agreement, the
Securities will be convertible at the option of the holder thereof for
shares of Common Stock in accordance with the terms of the Securities; the
shares of Common Stock issuable upon conversion of the Securities have been
duly authorized and reserved for issuance upon such
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conversion by all necessary corporate action and such shares, when issued
upon such conversion, will be validly issued and will be fully paid and
non-assessable; no holder of such shares will be subject to personal
liability by reason of being such a holder; and the issuance of such shares
upon such conversion will not be subject to the preemptive or other similar
rights of any securityholder of the Company.
(xii) Authorization and Description of Securities. The Securities to
be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and non-assessable; the description of the Securities contained
in the General Disclosure Package and the Prospectus 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; and the issuance of the Securities is not
subject to the preemptive or other similar rights of any securityholder of
the Company.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default
(nor, to the knowledge of the Company, is any counterparty in 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 that would not singly or in the
aggregate reasonably be expected to result in a Material Adverse Effect;
and the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
the Prospectus under the caption "Use of Proceeds" and the issuance of the
shares of Common Stock issuable upon conversion of the Securities) and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and 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 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, defaults or Repayment Events or liens, charges or
encumbrances that would not singly or in the aggregate reasonably be
expected to result in a Material Adverse Effect), nor will such action
result in any violation of (i) 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 singly or in the aggregate
reasonably be expected to result in a Material Adverse Effect), or (ii) the
provisions of the charter or by-laws of the Company or any subsidiary. As
used herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (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.
(xiv) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any 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
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subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, would reasonably be expected to result in a Material
Adverse Effect.
(xv) 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, against or affecting the Company or any
subsidiary, 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 properties or assets thereof or 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.
(xvi) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated therein or to be filed as exhibits thereto
which have not been so described and filed as required.
(xvii) Possession of Intellectual Property. The Company and its
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 on reasonable terms such Intellectual Property would not,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to 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 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 reasonably be
expected to result in a Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder, the issuance of shares of Common Stock upon
conversion of Securities or the consummation of the transactions
contemplated by this Agreement and in the Registration Statement, except
such as have been already obtained or as may be required under the 1933 Act
or the 1933 Act Regulations or state securities laws.
(xix) Absence of Manipulation. Neither the Company nor any affiliate
of the Company has taken, nor will the Company or any affiliate 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, as such terms are used in Regulation M promulgated by the
Commission and related interpretations, of the price of any security of the
Company to facilitate the sale or resale of the Securities.
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(xx) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure so to possess would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to result in a Material Adverse
Effect.
(xxi) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other material properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(a) are described in the General Disclosure Package and the Prospectus or
(b) do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or
any of its subsidiaries holds properties described in the General
Disclosure Package and the Prospectus, are in full force and effect, and
neither the Company nor any subsidiary has any notice of any material 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
subsidiary to the continued possession of the leased or subleased premises
under any such lease or sublease.
(xxii) Investment Company Act. The Company is not required, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the General
Disclosure Package and the Prospectus will not be required, to register as
an "investment company" under the Investment Company Act of 1940, as
amended (the "1940 Act").
(xxiii) Environmental Laws. Except as described in the General
Disclosure Package and the Prospectus and except as would not, singly or in
the aggregate, reasonably be expected to result in a Material Adverse
Effect, (A) neither the Company nor any of its subsidiaries is in violation
of any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products, asbestos-containing materials or mold (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and its
subsidiaries
9
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that would
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxiv) Registration Rights. 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.
(xxv) Accounting Controls and Disclosure Controls. The Company and
each of its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability
for assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the General Disclosure Package and the
Prospectus, since the end of the Company's most recent audited fiscal year,
there has been (1) no material weakness in the Company's internal control
over financial reporting (whether or not remediated) and (2) no change in
the Company's internal control over financial reporting that has materially
adversely affected, or is reasonably likely to materially adversely affect,
the Company's internal control over financial reporting.
The Company and its consolidated subsidiaries employ disclosure
controls and procedures that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or
submits under the 1934 Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission's rules and forms, and
is accumulated and communicated to the Company's management, including its
principal executive officer or officers and principal financial officer or
officers, as appropriate, to allow timely decisions regarding disclosure.
(xxvi) Compliance with the Xxxxxxxx-Xxxxx Act. There is and has been
no failure on the part of the Company or, to the knowledge of the Company,
any of the Company's directors or officers, in their capacities as such, to
comply in all material respects with any provision of the Xxxxxxxx-Xxxxx
Act of 2002 and all rules and regulations promulgated thereunder or
implementing the provisions thereof (the "Xxxxxxxx-Xxxxx Act"), including
Section 402 related to loans and Sections 302 and 906 related to
certifications.
(xxvii) Pending Proceedings and Examinations. The Registration
Statement is not the subject of a pending proceeding or examination under
Section 8(d) or 8(e) of the 1933 Act, and the Company is not the subject of
a pending proceeding under Section 8A of the 1933 Act in connection with
the offering of the Securities.
(xxviii) Payment of Taxes. All United States federal income tax
returns of the Company and its subsidiaries required by law to be filed
have been filed and all taxes shown by such returns
10
or otherwise assessed, which are due and payable, have been paid, except
assessments against which appeals have been or will be promptly taken and
as to which adequate reserves have been provided. The United States federal
income tax returns of the Company through the fiscal year ended December
31, 2001 have been settled and no assessment in connection therewith has
been made against the Company. The Company and its subsidiaries have filed
all other tax returns that are required to have been filed by them pursuant
to applicable foreign, state, local or other law except insofar as the
failure to file such returns would not result in a Material Adverse Effect,
and has paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company and its subsidiaries, except for such
taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The charges, accruals and reserves on
the books of the Company in respect of any income and corporation tax
liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional income tax for any years not
finally determined, except to the extent of any inadequacy that would not
singly or in the aggregate reasonably be expected to result in a Material
Adverse Effect.
(xxix) Insurance. The Company and its subsidiaries carry or are
entitled to the benefits of insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as is generally
maintained by companies of established repute engaged in the same or
similar business, and all of such insurance is in full force and effect.
Except as disclosed in the General Disclosure Package and the Prospectus,
the Company has no reason to believe that it or any subsidiary will not be
able to either renew such coverage as and when such policies expire, or
obtain comparable coverage from similar institutions, at a cost that would
not reasonably be expected to result in a Material Adverse Effect.
(xxx) Statistical and Market-Related Data. Any statistical and
market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate, and the Company is
not aware of any necessary written consent to the use of such data from
such sources, except such as have been obtained.
(xxxi) Foreign Corrupt Practices Act. Neither the Company nor, to the
knowledge of the Company, any director, officer, agent, employee, affiliate
or other person acting on behalf of the Company or any of its subsidiaries
is aware of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder (the "FCPA"),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any "foreign official" (as such term is
defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA
and the Company has conducted its business in compliance with the FCPA and
has instituted and maintains policies and procedures designed to ensure,
and which are reasonably expected to continue to ensure, continued
compliance therewith.
(xxxii) Money Laundering Laws. The operations of the Company are and
have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (collectively, the "Money Laundering
Laws") and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
11
Company with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
(xxxiii) OFAC. Neither the Company nor, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or person acting
on behalf of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC"); and the Company will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(xxxiv) Insurance Regulatory Matters. Each of the Company and each of
its subsidiaries that is engaged in the business of insurance (each, an
"Insurance Subsidiary"), is duly licensed or registered as a holding
company or as an insurer, as the case may be, under the insurance laws
(including laws that relate to companies that control insurance companies)
and the rules, regulations and interpretations of the insurance regulatory
authorities thereunder (collectively, "Insurance Laws"), of each
jurisdiction in which the conduct of its business as described in the
General Disclosure Package and the Prospectus requires such licensing (each
such license, an "Insurance License") or registration. Each of the Company
and its Insurance Subsidiaries has made all required material filings under
applicable holding company statutes or other Insurance Laws in each
jurisdiction where such filings are required. Each of the Insurance
Subsidiaries has all other necessary material authorizations, approvals,
orders, consents, certificates, permits, registrations and qualifications
of and from all insurance regulatory authorities (together with the
Insurance Licenses, the "Insurance Licenses and Authorizations") necessary
to conduct its business as described in the General Disclosure Package and
the Prospectus and all of the foregoing are in full force and effect. Each
of the Insurance Subsidiaries has fulfilled and performed all obligations
necessary to maintain the Insurance Licenses and Authorizations. There is
no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or investigation that would result in the revocation,
termination or suspension of any of the Insurance Licenses and
Authorizations that would, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. None of the Company or any
of its Insurance Subsidiaries has received any notification from any
insurance regulatory authority or other governmental authority to the
effect that any additional Insurance Licenses and Authorizations are needed
to be obtained by either the Company or any of its Insurance Subsidiaries.
Except as otherwise described in the General Disclosure Package or the
Prospectus, no insurance regulatory authority has issued to the Company or
any of its Insurance Subsidiaries any order impairing, restricting or
prohibiting (A) the payment of dividends by the Company or any of the
Insurance Subsidiaries, (B) the making of a distribution on any Insurance
Subsidiary's capital stock, (C) the repayment to the Company of any loans
or advances to any Insurance Subsidiary from the Company or (D) the
transfer of any Insurance Subsidiary's property or assets to the Company or
any other subsidiary of the Company.
(xxxv) Insurance Reserving Practices. Except as disclosed in the
General Disclosure Package and the Prospectus, the Company and its
Insurance Subsidiaries have made no material change in their insurance
reserving practices since December 31, 2005.
(xxxvi) Reinsurance. All reinsurance treaties, contracts and
arrangements to which any Insurance Subsidiary is a party are in full force
and effect and no Insurance Subsidiary is (nor, to the knowledge of the
Company, is any counterparty) in material violation of, or in default in
the performance, observance or fulfillment of, any material obligation,
agreement, covenant or condition contained therein. No Insurance Subsidiary
has received any notice that any of the
12
other parties to such treaties, contracts or arrangements intends not to,
or will be unable to, perform such treaty, contract or arrangement in any
material respect, and the Company has no reason to believe that any of the
other parties to such treaties or arrangements will be unable to materially
perform such treaty, contract or arrangement except to the extent
adequately and properly reserved for in the audited historical financial
statements of the Company included in the Prospectus.
(xxxvii) Statutory Financial Statements. All statutory financial
statements of the Insurance Subsidiaries have been prepared for each
relevant period in conformity with statutory accounting principles or
practices required or permitted by the National Association of Insurance
Commissioners and by the Insurance Laws of the jurisdiction of domicile of
each Insurance Subsidiary (and the statutory financial statements of the
Insurance Subsidiaries are not required to be prepared pursuant to the
Insurance Laws of any other jurisdiction), and such statutory financial
statements fairly represent the financial position and the results of
operations of the relevant Insurance Subsidiary as of the dates and for the
periods to which such financial statements relate in accordance with
Statutory Accounting Principles.
(xxxviii) Rating. The Company has no knowledge of any threatened or
pending downgrading of the financial strength rating of its Insurance
Subsidiaries by A.M. Best Company, Inc. ("A.M. Best") or Standard & Poor's
Ratings Group, a division of XxXxxx-Xxxx, Inc. ("S&P"), as applicable. None
of the Company's Insurance Subsidiaries has received any notice from A.M.
Best or S&P of any intended or potential decrease in such rating or any
notice of a possible change in such rating that does not indicate the
direction of the possible change.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representative or to counsel
for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 147,000 shares of Preferred Stock.
The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
overallotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representative to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representative, but shall not be
earlier than two or later than seven full business days after the exercise of
said option, nor in any event prior to the Closing Time, as hereinafter defined.
If the option is exercised as to all or any portion of the Option Securities,
each of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities,
13
subject in each case to such adjustments as the Representative in its sole
discretion shall make to eliminate any sales or purchases of fractional shares.
(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 LLP, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other place as shall be agreed upon by the Representative and
the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representative and the Company (such time and date of payment
and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Company, on each Date of Delivery as specified in the notice from the
Representative to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representative may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430B, and will notify the Representative promptly, (i) when any post-effective
amendment to the Registration Statement or new registration statement relating
to the Securities shall become effective, or any supplement to the Prospectus or
any amended Prospectus shall have been filed, (ii) of the receipt of any
comments relating to the Registration Statement and the General Disclosure
Package from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or the filing of a new registration
statement or any amendment or supplement to the Prospectus or any document
incorporated by reference therein or otherwise deemed to be a part thereof or
for additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or such new
registration statement or of any order preventing or suspending the use of any
Preliminary
14
Prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant to Section
8(e) of the 1933 Act concerning the Registration Statement and (v) if the
Company becomes the subject of a proceeding under Section 8A of the 1933 Act in
connection with the offering of the Securities. The Company will effect the
filings required under Rule 424(b), in the manner and within the time period
required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment. The Company shall pay the
required Commission filing fees relating to the Securities within the time
required by Rule 456(b)(1)(i) of the 1933 Act Regulations without regard to the
proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the
1933 Act Regulations (including, if applicable, by updating the "Calculation of
Registration Fee" table in accordance with Rule 456(b)(1)(ii) either in a
post-effective amendment to the Registration Statement or on the cover page of a
prospectus filed pursuant to Rule 424(b)).
(b) Filing of Amendments and Exchange Act Documents. The Company will give
the Representative notice of its intention to file or prepare any amendment to
the Registration Statement or new registration statement relating to the
Securities or any amendment, supplement or revision to either any Preliminary
Prospectus (including any prospectus included in the Original Registration
Statement or amendment thereto at the time it became effective) or to the
Prospectus, and will furnish the Representative with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall reasonably object. The
Company has given the Representative notice of any filings made pursuant to the
1934 Act or the 1934 Act Regulations within 48 hours prior to the Applicable
Time; the Company will give the Representative notice of its intention to make
any such filing from the Applicable Time to the Closing Time and will furnish
the Representative with copies of any such documents a reasonable amount of time
prior to such proposed filing, as the case may be, and will not file or use any
such document to which the Representative or counsel for the Underwriters shall
reasonably object. The Company has prepared a final term sheet reflecting the
final terms of the Securities, a copy of which is attached hereto as Schedule F
(the "Final Term Sheet"), and shall file such Final Term Sheet as an "issuer
free writing prospectus" pursuant to Rule 433 prior to the close of business two
business days after the date hereof.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representative and counsel for the Underwriters, without charge,
signed copies of the Original Registration Statement and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein or
otherwise deemed to be a part thereof) and signed copies of all consents and
certificates of experts, and will also deliver to the Representative, without
charge, a conformed copy of the Original Registration Statement and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Original Registration Statement and each amendment thereto furnished to the
Underwriters 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.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each Preliminary Prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required (or but for the exemption in Rule 172 would be required)
to be delivered under the 1933 Act,
15
such number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters 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.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations 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 when a
prospectus is required (or but for the exemption in Rule 172 would be required)
by the 1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or 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 opinion of such
counsel, at any such time to amend the Registration Statement or to file a new
registration statement or amend or supplement the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section 3(b),
such amendment, supplement or new registration statement as may be necessary to
correct such statement or omission or to comply with such requirements, the
Company will use its best efforts to have such amendment or new registration
statement declared effective as soon as practicable (if it is not an automatic
shelf registration statement with respect to the Securities) and the Company
will furnish to the Underwriters such number of copies of such amendment,
supplement or new registration statement as the Underwriters may reasonably
request. If at any time following issuance of an Issuer Free Writing Prospectus
and prior to the completion of the distribution of the Securities as
contemplated in this Agreement and the Prospectus there occurred or occurs an
event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement relating to the Securities, the Statutory Prospectus or any
Preliminary Prospectus, or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances,
prevailing at that subsequent time, not misleading, the Company will promptly
notify the Representative and will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities and the shares of
Common Stock issuable upon conversion of Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions as the
Representative may designate and to maintain such qualifications in effect for a
period of not less than one year from the date hereof; provided, however, that
the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or so subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. The Company will also supply the Underwriters with such
information as is necessary for the determination of the legality of the
Securities for investment under the laws of such jurisdictions as the
Underwriters may reasonably request.
(g) Rule 158. The Company will timely file such report pursuant to the 1934
Act as is necessary in order to make generally available to its securityholders
an earnings statement for the purposes of, and to provide to the Underwriters
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
16
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the listing of
the Common Stock issuable upon the conversion of the Securities on the New York
Stock Exchange. In addition, if the Representative reasonably determines that
the Securities satisfy the requirements for listing on the New York Stock
Exchange, the Company shall use its best efforts to effect the listing of the
Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days from the
date of the Prospectus, the Company will not, without the prior written consent
of the Representative, (i) directly or indirectly, offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Preferred Stock or any share of Common Stock
or any securities convertible into or exercisable or exchangeable for Preferred
Stock or Common Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Preferred Stock or
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Preferred Stock or Common Stock or
such other securities, in cash or otherwise. The foregoing sentence shall not
apply to any offering, sale, issuance or registration of (A) the Securities to
be sold hereunder or any Common Stock issuable upon the conversion of the
Securities, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof, (C) any shares of Common Stock issued or options to purchase
Common Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus or (D) any shares of Common Stock issued pursuant
to any non-employee director stock plan or dividend reinvestment plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required (or but for the exemption in Rule 172 would be required)
to be delivered under the 1933 Act, will file all documents required to be filed
with the Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
(l) Issuer Free Writing Prospectuses. The Company represents and agrees
that, unless it obtains the prior consent of the Representative, and each
Underwriter represents and agrees that, unless it obtains the prior consent of
the Company and the Representative, it has not made and will not make any offer
relating to the Securities that would constitute an "issuer free writing
prospectus," as defined in Rule 433, or that would otherwise constitute a "free
writing prospectus," as defined in Rule 405, required to be filed with the
Commission; provided, however, that prior to the filing of the Final Term Sheet
in accordance with Section 3(b), the Underwriters are authorized to use the
information set forth in the Final Term Sheet in communications conveying
information relating to the offering to investors, it being understood that the
foregoing shall not be construed so as to permit the creation by the
Underwriters of any "issuer free writing prospectus," as defined in Rule 433
that is required to be filed with the Commission by the Company. Any such free
writing prospectus consented to by the Representative or by the Company and the
Representative, as the case may be, is hereinafter referred to as a "Permitted
Free Writing Prospectus." The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an "issuer free
writing prospectus," as defined in Rule 433, and has complied and will comply
with the requirements of Rule 164 and Rule 433 applicable to any Permitted Free
Writing Prospectus, including timely filing with the Commission where required,
legending and record keeping.
17
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid 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
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities or the issuance or delivery of the Common
Stock issuable upon conversion thereof, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters and the
certificates for the Common Stock issuable upon conversion of the Securities,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities and the
Common Stock 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 Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each Preliminary Prospectus, any
Permitted Free Writing Prospectus and of the Prospectus and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities and
the Common Stock, (ix) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with the
marketing 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, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, but not including the cost of aircraft chartered in connection with
the road show, (x) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. (the "NASD") of the terms
of the sale of the Securities, (xi) the fees and expenses incurred in connection
with the listing of the Securities and the Common Stock issuable upon the
conversion thereof on the New York Stock Exchange and (xii) the costs and
expenses (including without limitation any damages or other amounts payable in
connection with legal or contractual liability) associated with the reforming of
any contracts for sale of the Securities made by the Underwriter caused by a
breach of the representation contained in the third paragraph of Section
1(a)(i). None of the foregoing items (i) through (xii) shall include any
internal time charges or overhead or internal expense allocation of any
Underwriter. Notwithstanding the foregoing, the Underwriters hereby agree to (i)
reimburse the Company for up to Five Hundred Thousand Dollars ($500,000) of the
foregoing expenses and (ii) pay for the cost of any aircraft chartered in
connection with the road show.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all out-of-pocket
expenses reasonably incurred by the Underwriters in connection with the
transactions contemplated by the Registration Statement, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
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:
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(a) Effectiveness of Registration Statement; Filing of Prospectus; Payment
of Filing Fee. The Registration Statement has become effective and at Closing
Time no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor 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 Underwriters. A prospectus containing the Rule
430B Information shall have been filed with the Commission in the manner and
within the time frame required by Rule 424(b) without reliance on Rule 424(b)(8)
or a post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430B. The
Company shall have paid the required Commission filing fees relating to the
Securities within the time period required by Rule 456(1)9i) of the 1933 Act
Regulations without regard to the proviso therein and otherwise in accordance
with Rules 456(b) and 457(r) of the 1933 Act Regulations and, if applicable,
shall have updated the "Calculation of Registration Fee" table in accordance
with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration
Statement or on the cover page of a prospectus filed pursuant to Rule 424(b).
(b) Opinions of Counsel for Company. At Closing Time, the Representative
shall have received (i) the favorable opinions, dated as of Closing Time, of
Xxxxx Xxxxxxxxxx LLP and Morris, Nichols, Arsht & Xxxxxxx LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A-1 hereto; (ii) the favorable
opinion, dated as of Closing Time, of Dechert LLP, special tax counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A-2 hereto; and (iii) the
favorable opinions, dated as of Closing Time, of special local counsel for each
of the Insurance Subsidiaries, in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of each such letter
for each of the other Underwriters to the effect set forth in Exhibit A-3
hereto. In giving each such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the
Representative. Such counsel may also state 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.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP, counsel for the Underwriters, in
form and substance satisfactory to the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Representative. Such counsel may
also state 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.
(d) 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 or the General Disclosure Package, 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 Representative 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
19
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
their knowledge, contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from KPMG LLP a letter dated
such date, in form and substance satisfactory to the Representative, together
with signed or reproduced copies of such letter for each of the other
Underwriters 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, the General Disclosure Package and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from KPMG LLP a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to shall
be a date not more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Common Stock issuable on
conversion of the Securities shall have been approved for listing on the New
York Stock Exchange, subject only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the Representative
shall have received an agreement substantially in the form of Exhibit B hereto
signed by the persons listed on Schedule D hereto.
(j) Maintenance of Rating. Since the execution of this Agreement, there
shall not have been any decrease in the rating of the financial strength rating
of the Insurance Subsidiaries by A.M. Best or S&P. None of the Insurance
Subsidiaries shall have received any notice from A.M. Best or S&P of any
intended or potential decrease in such rating or any notice of a possible change
in such rating that does not indicate the direction of the possible change.
(k) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company and any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representative shall have received:
(i) Officers' Certificate. A certificate, dated such Date of Delivery,
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(e) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinions of Xxxxx
Xxxxxxxxxx LLP and Morris, Nichols, Arsht & Xxxxxxx LLP, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b) hereof.
20
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from KPMG LLP, in form and
substance satisfactory to the Representative and dated such Date of
Delivery, substantially in the same form and substance as the letter
furnished to the Representative pursuant to Section 5(f) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities 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 in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.
(m) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representative by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party 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 Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), its selling agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430B Information or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company;
21
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Representative),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430B Information, or
any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
(or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430B Information or any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representative expressly for use therein.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Upon such notification, the indemnifying party will assume the
defense of such action or proceeding and will employ counsel reasonably
satisfactory to the indemnified party and will pay the reasonable fees and
expenses of such counsel. Notwithstanding the preceding sentence, the
indemnified party will be entitled to employ counsel separate from counsel for
the indemnifying party and from any other party in such action but reasonably
satisfactory to the indemnifying party if the indemnified party reasonably
determines that a conflict of interest exists which makes representation by
counsel chosen by the indemnifying party inadvisable, if the indemnified party
reasonably determines that one or more legal defenses may be available to it
that are different from or additional to those available to the indemnifying
party or if the indemnifying party fails to assume the defense of the action or
proceeding in a timely manner. In such event, the reasonable fees and
disbursements of such separate counsel will be paid by the indemnifying party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from the
indemnifying parties' own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim
22
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.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have properly requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) or settlement of any claim in connection
with any violation referred to in Section 6(e) effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request for reimbursement, (ii) such
indemnifying party shall have received notice of the terms of such proposed
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus bear to the aggregate initial public
offering price of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 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
23
Underwriter has otherwise been required to pay by reason of any 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 0000 Xxx) 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 an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company and (ii) delivery of
and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Company, at any time at or prior to 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 or General Disclosure
Package, 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 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
Representative, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange 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 (iv) a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (v) 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.
24
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representative shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation
of the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the (i) Representative or (ii) the Company shall have
the right to postpone Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Default by the Company. If the Company shall fail at Closing
Time or at the Date of Delivery to sell and deliver the number of Securities
that it is obligated to sell hereunder, then this Agreement shall terminate
without any liability on the part of any nondefaulting party; provided, however,
that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and
effect. No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee, representative
or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to the Company relating to such tax
treatment and tax structure. For purposes of the foregoing, the term "tax
treatment" is the purported or claimed federal income tax treatment of the
transactions contemplated hereby, and the term "tax structure" includes any fact
that may be relevant to understanding the purported or claimed federal income
tax treatment of the transactions contemplated hereby.
SECTION 13. 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
25
telecommunication. Notices to the Underwriters shall be directed to the
Representative at 4 World Financial Center, Xxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxxxx X. Xxxxxxxxx, Director; and notices to the
Company shall be directed to it at 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention Chief Financial Officer, with a copy to the attention of the
General Counsel.
SECTION 14. No Advisory or Fiduciary Relationship. The Company acknowledges
and agrees that (a) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the public offering price of the
Securities and any related discounts and commissions, is an arm's-length
commercial transaction between the Company, on the one hand, and the several
Underwriters, on the other hand, (b) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as a principal and is not the agent or fiduciary
of the Company, or its stockholders, creditors, employees or any other party,
(c) no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company on other matters) and no
Underwriter has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company, and (e) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.
SECTION 15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the
Underwriters, or any of them, with respect to the subject matter hereof.
SECTION 16. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company 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 Underwriters and the Company 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 or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 20. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
26
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 Underwriters and the Company in accordance with its terms.
Very truly yours,
ALLEGHANY CORPORATION
By /s/ Xxxxx X. Xxxxxx
-------------------------------------
Title: Xxxxx X. Xxxxxx
Senior Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Authorized Signatory
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated...................... 788,000
Wachovia Capital Markets, LLC........ 88,650
Xxxxxxx & Partners Securities, LLC... 59,100
Xxxxxx Xxxxxxxxxx Xxxxx LLC.......... 49,250
-------
Total............................. 985,000
=======
Sch A-1
SCHEDULE B
ALLEGHANY CORPORATION
985,000 Shares of 5.75% Mandatory Convertible Preferred Stock
(Par Value $1.00 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $264.60.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $256.662, being an amount equal to the initial
public offering price set forth above less $7.938 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by 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 Option Securities.
Sch B-1
SCHEDULE C
SUBSIDIARIES
Alleghany Capital Corporation (Delaware)
Alleghany Consulting, Inc. (Delaware)
Alleghany Funding Corporation (Delaware)
Alleghany Properties Holdings LLC (Delaware)
Alleghany Properties LLC (California)
Xxxx Steel and Supply Company (Delaware)
MSL Property Holdings, Inc. (Delaware)
MSL Capital Recovery Corp. (Delaware)
J & E Corporation (Tennessee)
Alleghany Insurance Holdings LLC (Delaware)
AIHL Re LLC (Vermont)
Capitol Transamerica Corporation (Wisconsin)
Capitol Facilities Corporation (Wisconsin)
Capitol Indemnity Corporation (Wisconsin)
Capitol Specialty Insurance Corporation (Wisconsin)
Platte River Insurance Company (Nebraska)
RSUI Group, Inc. (Delaware)
Resurgens Specialty Underwriting, Inc. (Georgia)
RSA Surplus Lines Insurance Services, Inc. (Delaware)
RSUI Indemnity Company (New Hampshire)
Landmark American Insurance Company (Oklahoma)
Darwin Professional Underwriters, Inc. (Delaware-- 54.9%)
Darwin Group, Inc. (Delaware)
Darwin National Assurance Company (Delaware)
Darwin Select Insurance Company (Arkansas)
Sch C-1
SCHEDULE D
PERSONS SUBJECT TO LOCK-UP
F.M. Xxxxx
Xxxxxx X. Xxxxx
Xxx X. Xxxxx
Xxxx X. Xxxxx, Xx.
Xxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxx, Xx.
Xxxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Will
Xxxxxxx X.X. Xxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Sch D-1
SCHEDULE E
EACH ISSUER GENERAL USE FREE WRITING PROSPECTUS
None
Sch E-1
SCHEDULE F
FINAL TERM SHEET
ALLEGHANY CORPORATION
985,000 SHARES 5.75% MANDATORY CONVERTIBLE PREFERRED STOCK
Issuer: Alleghany Corporation
Offering Size: 985,000 Shares of Preferred Stock
Overallotment Option: 147,000 Shares of Preferred Stock
Total Number of Shares Authorized For Issuance: 1,132,000 Shares
Issue Price: $264.60
Estimated Net Proceeds to Alleghany (assuming the exercise in full of the
underwriters' overallotment option): $290 million
Liquidation Preference: $264.60
Maturity: June 15, 2009
Annual Dividend Rate: 5.75%
Dividend Payment Dates: March 15, June 15, September 15, December 15
First Dividend Payment Date: September 15, 2006
First Dividend Payment: $3.4655
Subsequent Quarterly Dividend Payment: $3.8036
Conversion Premium: 18.0%
Reference Price: $264.60
Threshold Appreciation Price: $312.23
Settlement Ratio at Maturity: If Share Price < or = $264.60, 1 share (Maximum
Conversion Rate)
If Share Price > $264.60 and < $312.23,
264.60/Share Price (between 0.8475 share and
1 share)
If Share Price > or = $312.23, 0.8475 share
(Minimum Conversion Rate)
Early Conversion Rate: 0.8475
Dividend Protection: Full protection via conversion ratio adjustment
Discount Rate For Cash Acquisition Make-Whole Amount: 6.65%
Conversion Upon Cash Acquisition: If Alleghany is the subject of specified cash
acquisitions on or prior to June 15 2009, under certain circumstances, it will:
(1) permit conversion of its Preferred Stock during the period beginning on the
date that is 15 days prior to the anticipated effective date of the applicable
cash acquisition and ending on the date that is 15 days after the actual
effective date at a specified conversion rate for each hypothetical stock price
and effective date referenced by the following table and (2) pay converting
holders an amount equal to the sum of any accumulated and unpaid dividends plus
the present value of all remaining dividends on such Preferred Stock through
June 15, 2009.
Sch F-1
STOCK PRICE ON EFFECTIVE DATE
---------------------------------------------------------------------------------------
$150 $200 $250 $264.60 $275 $300 $325 $350 $400 $500 $600
------ ------ ------ ------- ------ ------ ------ ------ ------ ------ ------
At issue 0.9743 0.9115 0.8538 0.8448 0.8405 0.8359 0.8362 0.8385 0.8430 0.8467 0.8473
June 15, 2007 0.9920 0.9486 0.8800 0.8647 0.8564 0.8447 0.8414 0.8420 0.8451 0.8472 0.8474
June 15, 2008 0.9996 0.9853 0.9233 0.8999 0.8848 0.8589 0.8483 0.8462 0.8470 0.8474 0.8475
June 15, 2009 1.0000 1.0000 1.0000 1.0000 0.9622 0.8820 0.8475 0.8475 0.8475 0.8475 0.8475
However, if such acquisition constitutes a public acquirer change of control,
Alleghany may elect, in lieu of providing for conversion and paying the dividend
amount, to make the Preferred Stock convertible into public acquirer common
stock.
************************
The issuer has filed a registration statement (including a prospectus) with the
SEC for the offering to which this communication relates. Before you invest, you
should read the prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the issuer
and this offering. You may get these documents for free by visiting XXXXX on the
SEC web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus if
you request it by calling toll-free (000)000-0000.
Sch F-2
Exhibit A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)(i)
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
General Disclosure Package and the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(iii) To our knowledge, none of the issued and outstanding shares of
capital stock of the Company was issued in violation of any preemptive or other
similar right of any person or entity that was a securityholder of the Company
at the time of issuance.
(iv) The Securities have been duly authorized for issuance and sale to
the Underwriters pursuant to the Purchase Agreement and, when issued and
delivered by the Company pursuant to the Purchase Agreement against payment of
the consideration set forth in the Purchase Agreement, will be validly issued
and fully paid and non-assessable, and, to our knowledge, none of such
Securities is subject to any preemptive or other similar right of any existing
securityholder of the Company. The shares of Common Stock issuable upon
conversion of the Securities have been duly authorized and reserved for issuance
upon such conversion by all necessary corporate action; such shares, when issued
upon such conversion, will be validly issued and will be fully paid and
non-assessable and, to our knowledge, none of such shares is subject to any
preemptive or other similar right of any existing securityholder of the Company.
(v) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Original Registration Statement was filed and became
effective on June 14, 2006; Preliminary Prospectuses were filed pursuant to Rule
424(b) on June 14, 2006 and June 19, 2006; the Final Term Sheet was filed
pursuant to Rule 433(d) on June 20, 2006; and the Prospectus was filed pursuant
to Rule 424(b) on June 20, 2006; and, to our knowledge, 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
threatened by the Commission.
(vii) The Registration Statement, the Preliminary Prospectuses, the
Prospectus and the Final Term Sheet, as of their respective effective or issue
dates (except for the financial statements and the notes thereto and the
financial statement schedules and other accounting and financial data included
therein or omitted therefrom, as to which we express no opinion) complied as to
form in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(viii) To our knowledge, all documents incorporated by reference in
the Registration Statement as of their respective dates complied as to form in
all material respects with the requirements of the 1934 Act and the 1934 Act
Regulations.
(ix) The form of certificate used to evidence the Mandatory
Convertible Preferred Stock complies in all material respects with all
applicable statutory requirements and with any applicable requirements of the
Certificate of Incorporation and the By-Laws.
A-1-1
(x) To our knowledge, there are no legal or governmental proceedings,
inquiries or investigations pending or threatened which are of a character
required to be disclosed in the Registration Statement or the General Disclosure
Package which are not disclosed as required or which would reasonably be
expected to materially and adversely affect the ability of the Company to
consummate the transactions contemplated by the Purchase Agreement or to perform
its obligations thereunder.
(xi) The statements set forth in the General Disclosure Package and
the Prospectus under the captions "Description of Capital Stock," "Description
of the Mandatory Convertible Preferred Stock" and in Part II of the Registration
Statement under Item 15, Limitations on director liability and indemnification
of directors and officers, to the extent that such statements purport to
summarize statutes, legal and governmental proceedings and contracts and other
documents referred to therein, fairly present in all material respects the
information called for with regard to such legal matters or documents under the
requirements of the 1933 Act and the 1933 Act Regulations.
(xii) All descriptions in the Registration Statement of contracts or
agreements to which the Company or any of the Subsidiaries is a party and which
are filed as exhibits to the Registration Statement are accurate in all material
respects. To our knowledge, there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments which are of a
character (1) required to be described in the Registration Statement or the
Prospectus which are not described as required or (2) required to be filed as
exhibits to the Registration Statement which are not filed as required.
(xiii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any State of New York or
federal court or governmental authority or agency, or of any State of Delaware
court or governmental authority or agency acting pursuant to the Delaware
General Corporation Law, is required to be obtained or made by the Company for
the issuance and sale of the Securities as contemplated by the Purchase
Agreement except (1) such as has been obtained under the 1933 Act and (2) as may
be required under the securities or blue sky laws of the various states or by
the National Association of Securities Dealers, Inc., as to which we express no
opinion.
(xiv) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated thereby
(including the use of the proceeds from the sale of the Securities as described
in the General Disclosure Package and the Prospectus under the caption "Use of
Proceeds") will not, whether with or without the giving of notice or lapse of
time or both, (1) conflict with or constitute a breach of or default under any
of the terms or provisions of the Company's Certificate of Incorporation or
By-laws, (2) to our knowledge conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xiii) of the Purchase
Agreement) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease, agreement or instrument filed as an exhibit to
the Registration Statement (except for such conflicts, breaches, defaults or
Repayment Events or liens, charges or encumbrances that would not have a
Material Adverse Effect), (3) result in any violation of the Delaware General
Corporation Law, (4) result in any violation of any federal law of the United
States or law of the State of New York applicable to the Company, or (5) result
in any violation of the provisions of any applicable judgment, order, writ or
decree of any State of New York or federal court or, to our knowledge,
governmental authority or agency, or of any State of Delaware court known to us
to have jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties, assets or operations.
(xv) To our knowledge, there are no contracts, agreements, or
understandings between the Company and any person granting such person the right
to require the Company to file a registration
A-1-2
statement under the 1933 Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the 0000 Xxx.
(xvi) The Company is not required, and upon the issuance and sale of
the Securities as contemplated by the Purchase Agreement and the application of
the net proceeds therefrom as described in the Prospectus under the caption "Use
of Proceeds" will not be required, to register as an "investment company" under
the 1940 Act.
X-0-0
Xxxxxxx X-0
FORM OF OPINION OF COMPANY'S SPECIAL TAX COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)(ii)
The statements set forth under the heading "Certain U.S. Federal Income Tax
Considerations" in the Registration Statement, the Preliminary Prospectus and
the Prospectus, insofar as such statements constitute summaries of certain legal
matters or legal conclusions, fairly summarize the matters and terms described
therein in all material respects.
X-0-0
Xxxxxxx X-0
FORM OF OPINION OF LOCAL COUNSEL FOR EACH OF THE INSURANCE SUBSIDIARIES
TO BE DELIVERED PURSUANT TO SECTION 5(b)(iii)
(i) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any State of [____] court or
governmental authority or agency is required to be obtained or made by the
Company or by [domestic subsidiaries] for the issuance and sale of the
Securities as contemplated by the Purchase Agreement except such as may be
required under the Securities or Blue Sky laws of the State of [____].
(ii) The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated thereby will not, whether
with or without the giving of notice or lapse of time or both (1) result in any
violation of any law of the State of [____] applicable to the Company or to
[domestic subsidiaries], or (2) result in any violation of the provisions of any
applicable judgment, order, writ or decree of any State of [____] court or
governmental authority or agency known to us to have jurisdiction over the
Company or [domestic subsidiaries] or any of their respective properties, assets
or operations.
A-3-1
Exhibit B
_____, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
as Representative of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
4 World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Alleghany Corporation
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of Alleghany
Corporation, a Delaware corporation (the "Company"), understands that Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx") proposes to enter into a Purchase Agreement (the "Purchase Agreement")
with the Company providing for the public offering of shares of the Company's
5.75% mandatory convertible preferred stock, par value $1.00 (the "Preferred
Stock"). In recognition of the benefit that such an offering will confer upon
the undersigned as a stockholder and an officer and/or director of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the Purchase Agreement that, during a period of 90 days from the
date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise dispose of or transfer any shares of the Preferred Stock or any
shares of the Company's common stock, par value $1.00 (the "Common Stock") or
any securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file, or cause to be filed, any registration statement under the Securities Act
of 1933, as amended, with respect to any of the foregoing (collectively, the
"Lock-Up Securities") or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Preferred Stock, Common
Stock or other securities, in cash or otherwise.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.
B-2-1
Very truly yours,
Signature:
-----------------------------
Print Name:
----------------------------
B-2-2
