EXHIBIT 1.1
3,300,000 Shares
W. R. BERKLEY CORPORATION
Common Stock, $.20 par value
UNDERWRITING AGREEMENT
November 1, 2001
November 1, 2001
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
As Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
W. R. Berkley Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") 3,300,000 shares of its common stock, $.20 par value (the "Firm
Shares"). The Company also proposes to issue and sell to the Underwriters not
more than an additional 495,000 shares of common stock, $.20 par value (the
"Additional Shares") if and to the extent that you, as Managers of the offering,
shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares." The shares of common stock, $.20 par value, of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-57546) covering the
registration of the securities of the Company, including the Shares, under the
Securities Act of 1933, as amended (the "Securities Act"), including the related
preliminary prospectus or prospectuses, and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the Securities Act (the "Rules and Regulations") and the Company has filed
such post-effective amendments thereto as may be required prior to the execution
of this Agreement. Promptly after execution and delivery of this Agreement, the
Company will prepare and file a final prospectus and final prospectus supplement
in accordance with the provisions of paragraph (b) of Rule 424 of the Rules and
Regulations. Such registration statement, as amended, including the exhibits and
schedules thereto, if any, and the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the Rules and Regulations (the "Rule 430A
Information") is referred to herein as the "Registration Statement," and the
final prospectus and the final prospectus supplement relating to the offering of
the Shares, in the form first furnished to the Underwriters by the Company for
use in connection with the offering of the Shares, are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), prior to the execution of this
Agreement. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
applicable registration statement became effective and any amendment or
supplement thereto that omitted the Rule 430A Information that was used after
such effectiveness and prior to the execution and delivery of the applicable
underwriting agreement.
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the knowledge
of the Company, threatened by the Commission.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all respects to the requirements of the
Securities Act and the Rules and Regulations and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of this Agreement, the Registration Statement
and the Prospectus will conform in all respects to the requirements of the
Securities Act and the Rules and Regulations; the Prospectus does not
include and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein, in light of
the circumstances under which they were made, or necessary to make the
statements therein not misleading, except that the foregoing does not apply
to statements in or omissions from any of such documents based upon written
information furnished to the Company by any Underwriter through the
representatives or representatives of the Underwriters, if any
("Representatives"), specifically for use therein; and the documents
incorporated by reference in the Prospectus, at the time they were, or
hereafter, are filed with the Commission, complied and, at any time when a
prospectus relating to the Shares is required to be delivered under the
Securities Act in connection with sales by any Underwriter or dealer, will
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except in such
jurisdictions where the failure to be so qualified would not individually
or in the aggregate have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole ("Material Adverse Effect").
(d) Each Significant Subsidiary (as defined below) of the Company has
been duly incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its
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properties and conduct its business as described in the Prospectus; and
each Significant Subsidiary of the Company is, to the extent applicable,
duly qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not individually or in the aggregate have
a Material Adverse Effect; all of the issued and outstanding capital stock
of each Significant Subsidiary of the Company has been duly authorized and
validly issued and is fully paid and nonassessable; and the capital stock
of each Significant Subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects. As used
herein, "Significant Subsidiaries" means Berkley Regional Insurance
Company, Berkley Insurance Company, Admiral Insurance Company and Berkley
Risk Administrators Company, L.L.C., which are currently the only operating
insurance companies that are "significant subsidiaries" of the Company as
that term is defined in Rule 1-02(w) of Regulation S-X of the Rules and
Regulations.
(e) The Shares and all other outstanding shares of capital stock of
the Company have been duly authorized; all outstanding shares of capital
stock of the Company are, and, when the Shares have been delivered and paid
for in accordance with this Agreement on each of the Closing Date and the
Option Closing Date (as defined below), if applicable, such Shares will
have been, validly issued, fully paid and nonassessable and will conform to
the description thereof contained in the Prospectus; the stockholders of
the Company have no preemptive rights with respect to the Common Stock; and
the authorized, issued and outstanding capital stock of the Company set
forth under the caption "Capitalization" in the Prospectus is accurate as
of the date of such information and has not materially changed since such
date.
(f) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
this offering.
(g) 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 statement under the Securities 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 Securities Act.
(h) The Shares have been approved for listing on the New York Stock
Exchange, subject to notice of issuance.
(i) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Shares by the Company, except
such as have been obtained and made under the
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Securities Act, as contemplated under Section 5(a) hereof, and such as may
be required under state securities laws.
(j) The execution, delivery and performance of this Agreement, and the
issuance and sale of the Shares will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over the Company or
any Significant Subsidiaries of the Company or any of their material
properties, or any material agreement or instrument to which the Company or
any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the Company or any
such subsidiary is subject, or the charter or by-laws of the Company or any
such subsidiary, and the Company has full power and authority to authorize,
issue and sell the Shares as contemplated by this Agreement.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) Except as disclosed in the Prospectus, the Company and its
Significant Subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case
free from liens, encumbrances and defects that would affect the value
thereof or interfere with the use made or to be made thereof by them, other
than liens, encumbrances and defects that would not individually or in the
aggregate have a Material Adverse Effect; and except as disclosed in the
Prospectus, the Company and its subsidiaries hold any leased real or
personal property under valid and enforceable leases with no exceptions
that would individually or in the aggregate have a Material Adverse Effect.
(m) The Company and its Significant Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its Significant Subsidiaries,
would individually or in the aggregate have a Material Adverse Effect.
(n) The Company has made all required filings under applicable
insurance holding company statutes, and has received approvals of
acquisition of control and/or affiliate transactions, in each jurisdiction
in which such filings or approvals are required, except where the failure
to have made such filings or receive such approvals in any such
jurisdiction would not have individually or in the aggregate a Material
Adverse Effect; each of the Company's Significant Subsidiaries that is
required to be organized and licensed as an insurance or reinsurance
company (the "Insurance Subsidiaries") in its jurisdiction of incorporation
is duly organized and licensed as an insurance or reinsurance company in
its respective jurisdiction of incorporation, and each such Significant
Subsidiary is duly licensed or authorized as an insurer or reinsurer (the
"Insurance Licenses") in each other jurisdiction in which such licensing or
authorization is required, except where the failure to be so licensed or
authorized in any such jurisdiction would not
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have individually or in the aggregate a Material Adverse Effect; there is
no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or investigation that would reasonably be expected to lead to
the revocation, termination or suspension of any such Insurance Licenses,
the revocation, termination or suspension of which would have individually
or in the aggregate a Material Adverse Effect; and except as disclosed in
the Prospectus, no insurance regulatory agency or body has issued any order
or decree impairing, restricting or prohibiting the payment of dividends of
any Company subsidiary to its respective parent which would have
individually or in the aggregate a Material Adverse Effect.
(o) The Company and each of its Significant Subsidiaries is in
compliance with the requirements of all laws, ordinances, governmental
rules or regulations or court decree to which it may be subject, and has
filed all notices, reports, documents or other information required to be
filed thereunder, except where the failure to so comply or file would not
individually or in the aggregate have a Material Adverse Effect.
(p) Neither the Company nor any of its Insurance Subsidiaries is in
violation of, or in default in the performance, observance or fulfillment
of, any obligation, agreement, covenant or condition contained in
reinsurance treaties, contracts, agreements and arrangements to which the
Company or any of its Insurance Subsidiaries is a party, except for such
violations or defaults which would not individually or in the aggregate
have a Material Adverse Effect; neither the Company nor any of its
Insurance Subsidiaries has received any notice from any of the other
parties to such treaties, contracts, agreements or arrangements that such
other party intends not to perform its obligations thereunder and none of
them has any reason to believe that any of the other parties to such
treaties, contracts, agreements or arrangements will be unable to perform
its obligations thereunder, except to the extent that such nonperformance
would not individually or in the aggregate have a Material Adverse Effect.
(q) To the knowledge of the Company and its Insurance Subsidiaries, no
change in any insurance law or regulation is pending that would reasonably
be expected to have individually or in the aggregate a Material Adverse
Effect, except as described in the Prospectus.
(r) No labor dispute with the employees of the Company or any
Significant Subsidiary exists or, to the knowledge of the Company, is
imminent that would reasonably be expected to have individually or in the
aggregate a Material Adverse Effect.
(s) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect.
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(t) Except as disclosed in the Prospectus, neither the Company nor any
of its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or
is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware of
any pending investigation which would reasonably be expected to lead to
such a claim.
(u) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that would individually
or in the aggregate have a Material Adverse Effect, or would materially and
adversely affect the ability of the Company to perform its obligations
under this Agreement; and no such actions, suits or proceedings are, to the
Company's knowledge, threatened or contemplated.
(v) KPMG LLP, who have certified the financial statements and
supporting schedules of the Company and its subsidiaries contained or
incorporated by reference in the Prospectus, are independent public
accountants within the meaning of the Securities Act and the Rules and
Regulations; except as disclosed in the Prospectus, the financial
statements included in the Registration Statement and the Prospectus
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown; except as disclosed in the Prospectus, such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis; except as disclosed in the Prospectus, the schedules included or
incorporated in the Registration Statement present fairly the information
required to be stated therein; and except as disclosed in the Prospectus,
the Company and its Insurance Subsidiaries have made no material change in
their insurance reserving practices since the most recent audited financial
statements included in the Prospectus.
(w) The statutory annual and quarterly statements of the Insurance
Subsidiaries required to file such statutory statements and the statutory
balance sheets and income statements included in such statutory annual and
quarterly statements, most recently filed in each jurisdiction, have been
prepared in conformity with required or permitted or prescribed statutory
accounting principles or practices applied on a consistent basis, except as
may otherwise be indicated in the notes thereto, and present fairly the
financial position of the Insurance Subsidiaries (on a statutory basis) for
the period covered thereby.
(x) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii)
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transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(y) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus, (i) there
has been no material adverse change, nor any development or event involving
a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole, (ii) there have not been any
transactions entered into by the Company or any of its subsidiaries other
than in the ordinary course of business which are material to the Company
and its subsidiaries taken as a whole, and, (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(z) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as defined in the
Investment Company Act of 1940.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth in Schedule I hereto
opposite its name at $51.30 a share (the "Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 495,000 Additional
Shares at the Purchase Price. If you, on behalf of the Underwriters, elect to
exercise such option, you shall so notify the Company in writing not later than
30 days after the date of this Agreement, which notice shall specify the number
of Additional Shares to be purchased by the Underwriters and the date on which
such Additional Shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 90 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or
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contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any shares convertible
into or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other Shares, in cash or otherwise. The foregoing
sentence shall not apply to (A) the sale of the Shares under this Agreement, (B)
the issuance by the Company of any shares of Common Stock upon the exercise of
an option or warrant or the conversion of a security outstanding on the date
hereof of which the Underwriters have been advised in writing, or (C) grants of
options to purchase Common Stock pursuant to the terms of any employee stock
option plan, directors' stock option plan, deferred compensation plan, employee
stock purchase plan or dividend reinvestment plan in effect on the date hereof.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
$54.00 a share (the "Public Offering Price") and to certain dealers selected by
you at a price that represents a concession not in excess of $1.76 a share under
the Public Offering Price, and that no Underwriter may allow, and no dealer may
reallow, a concession to any Underwriter or to other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on November 6, 2001, or at such
other time on the same or such other date, not later than November 13, 2001, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the notice described in
Section 2 or at such other time on the same or on such other date, in any event
not later than December 3, 2001, as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "Option Closing
Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
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5. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(5) not later than the second business
day following the execution and delivery of this Agreement.
(b) The Company will advise Morgan Stanley & Co. Incorporated promptly
of any proposal to amend or supplement the Registration Statement or the
Prospectus and will afford Morgan Stanley & Co. Incorporated a reasonable
opportunity to comment on any such proposed amendment or supplement;
provided, however, the Company shall not file any such proposed amendment
or supplement to which Morgan Stanley & Co. Incorporated reasonably
objects; and the Company will also advise Morgan Stanley & Co. Incorporated
promptly of the filing of any such amendment or supplement and of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Shares as in the
opinion of counsel for the Underwriters is required to be delivered under
the Securities Act in connection with sales by any Underwriter or dealer,
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading the
Company promptly will notify Morgan Stanley & Co. Incorporated of such
event, and if such event shall occur or if, in the opinion of counsel for
the Underwriters, it is necessary at any time to amend the Prospectus to
comply with the Securities Act, the Company will promptly prepare and file
with the Commission, at its own expense, an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Neither Morgan Stanley & Co. Incorporated's consent to,
nor the Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6 hereof.
(d) As soon as practicable, but not later than 16 months, after the
date of this Agreement, the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
registration statement relating to the Shares, (ii) the effective date of
the most recent post-effective amendment to the Registration Statement to
become effective prior to the date of this Agreement and (iii) the date of
the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of this Agreement, which will satisfy the
provisions of Section 11(a) of the Securities Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus
and all amendments and supplements to such documents, in each case prior to
3:00 P.M. New York City time on the business day next succeeding the date
of this Agreement or as soon as possible, with
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respect to any amendment or supplement, during the period mentioned in
Section 5(c) above and in such quantities as Morgan Stanley & Co.
Incorporated reasonably requests. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Shares for
sale under the laws of such jurisdictions as Morgan Stanley & Co.
Incorporated reasonably designates and will continue such qualifications in
effect so long as required for the distribution; provided, that in
connection therewith the Company shall not be required to qualify to do
business in any jurisdiction or to file or consent or otherwise subject
itself to service of process or taxation in any jurisdiction where it is
not already so subject.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to stockholders, and (ii)
from time to time, such other information concerning the Company as Morgan
Stanley & Co. Incorporated may reasonably request.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery
of the Shares to the Underwriters, including any transfer or other taxes
payable thereon, (iii) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating
to the Common Stock and all costs and expenses incident to listing the
underlying securities on the New York Stock Exchange, (iv) the cost of
printing certificates representing the Shares, (v) the costs and charges of
any transfer agent, registrar or depositary, (vi) travel and lodging
expenses of officers and employees of the Company for any "road show"
undertaken in connection with the marketing of the offering of the Shares,
and one-half of the cost of any aircraft chartered in connection with the
road show, and (vii) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 9 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements
of their counsel, stock transfer taxes payable on resale of any of the
Shares by them and any advertising expenses connected with any offers they
may make.
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6. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the following conditions:
(a) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
(c) The Underwriters shall have received on the Closing Date an
opinion of Willkie Farr & Gallagher, outside counsel for the Company, dated
the Closing Date, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware;
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement;
(iii) The Shares have been duly authorized by all necessary
corporate action and validly issued, are fully paid and nonassessable
and conform in all material respects to the description thereof
contained in the Prospectus; and the stockholders of the Company have
no statutory preemptive rights with respect to the Shares;
(iv) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company,
except such as have been obtained and made under the Securities Act
and such as may be required under state securities and insurance laws,
and the execution and delivery of this Agreement and the consummation
of the transactions herein contemplated will not conflict with or
constitute a breach of, or default under, the certificate of
incorporation or by-laws of the Company;
-11-
(v) The Registration Statement has become effective under the
Securities Act, the Prospectus was filed with the Commission pursuant
to the subparagraph of Rule 424(b) specified in such opinion on the
date specified therein, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement and the
Prospectus (but not including any document incorporated by reference
therein), as of the date of this Agreement, and any amendment or
supplement thereto, and as of its date, complied as to form in all
material respects with the requirements of the Securities Act and the
Rules and Regulations; it being understood that such counsel need
express no opinion as to the financial statements or other financial
data contained in the Registration Statement or the Prospectus;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The information in the Prospectus under the captions
"Description of Our Capital Stock -- Common Stock" and "Underwriters,"
to the extent that such information is applicable to the Shares and
constitutes matter of law or legal conclusions or descriptions of
documents referred to therein, has been reviewed by them and is
correct in all material respects; and
(viii) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
The opinion of Willkie Farr & Gallagher described in this Section 6(c)
above shall be rendered to the Underwriters at the request of the Company and
shall so state therein.
In rendering such opinions, such counsel may state that (i) its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the corporate law of the State of Delaware
and (ii) it has relied, as to matters of fact and to the extent it deems proper,
on certificates of responsible officers of the Company or public officials. In
addition to the matters set forth above, such counsel shall state that it has no
reason to believe that the Registration Statement, as of the date of this
Agreement or as of the Closing Date, or any amendment thereto, as of its date or
as of the Closing Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of the
date of this Agreement or as of such Closing Date, or any amendment or
supplement thereto, as of its date or as of the Closing Date, contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being understood
that such counsel need express no view as to the financial statements or other
financial data contained in the Registration Statement or the Prospectus.
-12-
(d) The Underwriters shall have received on the Closing Date an
opinion of Ira S. Lederman, Senior Vice President and General Counsel -
Insurance Operations of the Company, dated the Closing Date, to the effect
that:
(i) The Company has an authorized capitalization as is set forth
in the Prospectus; and, to the best of such counsel's knowledge, the
stockholders of the Company have no preemptive rights with respect to
the Shares;
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would
not individually or in the aggregate have a Material Adverse Effect;
(iii) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, has the corporate
power and authority to own, lease and operate its properties and to
conduct the business described in the Registration Statement and, to
the extent applicable, is duly qualified as a foreign corporation to
transact business and is in good standing as such in each jurisdiction
in which it owns or leases substantial properties or in which the
conduct of its business requires such qualification (except in such
jurisdictions where the failure to be so qualified would not
individually or in the aggregate have a Material Adverse Effect) (such
counsel may note in his opinion that insurance laws of certain of such
jurisdictions where the Significant Subsidiaries hold an insurance
license do not require such due qualification as a foreign
corporation); except as set forth in the Registration Statement, all
of the issued and outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued
and are owned directly or indirectly by the Company, free and clear of
any pledges, liens, encumbrances, claims or equities; and all such
shares are fully paid and nonassessable;
(iv) There are no contracts, agreements or understandings known
to such counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Securities 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 Act;
(v) To the best of such counsel's knowledge, there are no
licenses, franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described in the Registration Statement or to be filed as an exhibit
thereto other than those described therein or filed or incorporated by
reference as exhibits thereto;
-13-
(vi) The execution, delivery and performance of this Agreement
and the issuance and sale of the Shares and compliance with the terms
and provisions thereof will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any
Significant Subsidiary of the Company or the charter or by-laws of any
such subsidiary, or, to the best of such counsel's knowledge, any of
their material properties, or any material agreement, contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject;
(vii) The Company has made all required filings under applicable
insurance holding company statutes, and has received approvals of
acquisition of control and/or affiliate transactions, in each
jurisdiction in which such filings or approvals are required, except
where the failure to have made such filings or receive such approvals
in any such jurisdiction would not reasonably be expected to have
individually or in the aggregate a Material Adverse Effect; each of
the Insurance Subsidiaries is duly organized and licensed as an
insurance or reinsurance company in its respective jurisdiction of
incorporation, and each such Insurance Subsidiary owns the Insurance
Licenses in each other jurisdiction in which such licensing or
authorization is required, except where the failure to be so licensed
or authorized in any such jurisdiction would not reasonably be
expected to have individually or in the aggregate a Material Adverse
Effect; there is no pending or, to the best of such counsel's
knowledge, threatened action, suit, proceeding or investigation that
would be reasonably likely to lead to the revocation, termination or
suspension of any such Insurance Licenses, the revocation, termination
or suspension of which would reasonably be expected to have
individually or in the aggregate a Material Adverse Effect; and except
as disclosed in the Prospectus, no insurance regulatory agency or body
has issued any order or decree impairing, restricting or prohibiting
the payment of dividends of any Company subsidiary to its respective
parent which would reasonably be expected to have individually or in
the aggregate a Material Adverse Effect;
(viii) Except as would not individually or in the aggregate have
a Material Adverse Effect and except as described in the Prospectus,
(i) to the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened which are required to
be disclosed in the Registration Statement, other than those disclosed
therein, and (ii) there are no pending legal or governmental
proceedings, to the best of such counsel's knowledge, to which the
Company or any subsidiary is a party or of which any of their property
is the subject which are not described in the Registration Statement
but are required to be so described in the Registration Statement,
including ordinary routine litigation incidental to the business;
(ix) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act (other than
the financial
-14-
statements, supporting schedules and other financial information
included or incorporated by reference therein, as to which no opinion
need to be rendered), at the time they were filed with the Commission
or delivered to the security holders, as the case may be, complied as
to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; and
(x) The descriptions in the Registration Statement and Prospectus
of legal and governmental proceedings and contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown; and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act.
In rendering such opinions, such counsel may state that (i) its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the corporate law of the State of Delaware
and (ii) it has relied, as to matters of fact and to the extent it deems proper,
on certificates of responsible officers of the Company or public officials. In
addition to the matters set forth above, such counsel shall state that it has no
reason to believe that the Registration Statement, as of the date of this
Agreement or as of the Closing Date, or any amendment thereto, as of its date or
as of the Closing Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of the
date of this Agreement or as of such Closing Date, or any amendment or
supplement thereto, as of its date or as of the Closing Date, contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being understood
that such counsel need express no view as to the financial statements or other
financial data contained in the Registration Statement or the Prospectus.
(e) The Underwriters shall have received on the Closing Date an
opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the
Underwriters, dated the Closing Date, with respect to the incorporation of
the Company, the validity of the Shares delivered on such Closing Date, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(f) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date, of the President or any Vice President
and a principal financial or accounting officer of the Company in which
such officers, to the best of their knowledge and after reasonable
investigation, shall state that the representations and warranties of the
Company in this Agreement are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, that no
stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission and that,
-15-
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(g) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance agreed to by LeBoeuf, Lamb,
Greene & MacRae, L.L.P., counsel for the Underwriters, from KPMG LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and each of the directors of the Company, Mr.
William R. Berkley and certain members of his immediate family relating to
sales and certain other dispositions of shares of Common Stock or certain
other securities, delivered to you on or before the date hereof, shall be
in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
7. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (b) below; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such
-16-
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 5(e) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 7(a) or 7(b), such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a),
and by the Company, in the case of parties indemnified pursuant to Section
7(b). The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss
or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second and third sentences
of this paragraph, the indemnifying party agrees that it
-17-
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (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 Shares or (ii) if
the allocation provided by clause 7(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 7(d)(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 that resulted
in such losses, claims, damages or liabilities, 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 Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. 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 the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or 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 that does not take
account of the equitable considerations referred to in Section 7(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection
-19-
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law
or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
8. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if: (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the National Association of
Securities Dealers, Inc., (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse; and (b) in the case of any of the events specified in clauses
8(a)(i) through 8(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided, that in no event shall the number of
Shares
-19-
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, New
York, New York 10036, Attention: Corporate Finance Execution, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at address
and numbers of the Company set forth in the Registration Statement, Attention:
Ira S. Lederman, Senior Vice President; provided, however, that any notice to an
Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
11. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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-21-
Very truly yours,
W. R. BERKLEY CORPORATION
By: /s/ Eugene G. Ballard
---------------------------------------------
Name: Eugene G. Ballard
Title: Senior Vice President,
Chief Financial Officer and Treasurer
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ Michael J. Caputo
-------------------------
Name: Michael J. Caputo
Title: Vice President
-22-
SCHEDULE I
Number of
Firm Shares
Underwriter To Be Purchased
Morgan Stanley & Co. Incorporated 1,006,668
Credit Suisse First Boston Corporation 1,006,666
Merrill Lynch, Pierce, Fenner & Smith Incorporated 1,006,666
Dowling & Partners Securities, LLC 70,000
Ferris, Baker Watts, Incorporated 70,000
Keefe, Bruyette & Woods, Inc. 70,000
Sandler O'Neill & Partners, L.P. 70,000
---------
Total............... 3,300,000
=========