EXECUTION COPY
XL CAPITAL LTD
SENIOR DEBT SECURITIES
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UNDERWRITING AGREEMENT
August 18, 2004
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
as Representatives of the several
Underwriters named in the Pricing
Agreement hereinafter described
Ladies and Gentlemen:
From time to time XL Capital Ltd, a Cayman Islands exempted limited
company (the "Company"), proposes to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its senior debt securities (the "Debt
Securities"), specified in Schedule II to such Pricing Agreement (with respect
to such Pricing Agreement, the "Designated Debt Securities").
The terms and rights of any particular issuance of Designated Debt
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture, as amended or supplemented by any supplemental
indenture relating Designated Debt Securities (the "Indenture"), between the
Company and the trustee (the "Trustee"), in each case as identified in the
Pricing Agreement.
1. Particular sales of Designated Debt Securities may be made from time
to time to the Underwriters of such Debt Securities, for whom the firms
designated as representatives of the Underwriters of such Debt Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting
as sole representative of the Underwriters and to Underwriters who act without
any firm being designated as their representative. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the Debt
Securities or as an obligation of any of the Underwriters to purchase any of the
Debt Securities. The obligation of the Company to issue and sell any of the Debt
Securities and the obligation of any of the Underwriters to purchase any of the
Debt Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Debt Securities specified therein. Each Pricing Agreement shall
specify the aggregate principal amount of such Designated Debt Securities, the
initial public offering price of such Designated Debt Securities or the manner
of determining such price, the purchase price to the Underwriters of such
Designated Debt Securities, the names of the Underwriters of such Designated
Debt Securities, the names of the Representatives of such Underwriters, the
aggregate principal amount of such Designated Debt Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Designated Debt Securities, if any, and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the registration
statement and prospectus with respect thereto) the terms of such Designated Debt
Securities, including the interest rates, if any, and maturity of the Designated
Debt Securities, whether such Designated Debt Securities will be convertible at
the option of the holder thereof, any redemption provisions and any sinking fund
requirements. A Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters, as of the date hereof, as of the date of the Pricing Agreement
with respect to any Designated Debt Securities and as of the Time of Delivery
(as defined in Section 4 hereof), that:
(a) The Company meets the requirements for use of Form S-3
under the Act; and a registration statement on Form S-3 (File No
333-116245) (the "Initial Registration Statement") in respect of the
Debt Securities has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding
exhibits to the Initial Registration Statement, but including all
documents incorporated by reference in the prospectus included therein,
to the Representatives for each of the other Underwriters has been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein
has heretofore been filed, or transmitted for filing, with the
Commission (other than the Company's Annual Report on Form 10-K for the
year ended December 31, 2003 (as amended by the Company's Annual Report
on Form 10-K/A filed on August 9, 2004), the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2004, the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and
the Company's Current Reports on Form 8-K dated March
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16, 2004, March 18, 2004, March 24, 2004, May 19, 2004, August 9, 2004
and August 18, 2004 incorporated by reference into the Initial
Registration Statement and the prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the Act,
each in the form heretofore delivered to the Representatives); and no
stop order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement
or filed with the Commission pursuant to Rule 424(a) or Rule 424(b)
under the Act, including the related preliminary prospectus supplement
with respect to the Designated Debt Securities), is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, at the
time such part of the Initial Registration Statement or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective but excluding each Form T-1, each as amended at the
time such part of the Initial Registration Statement became effective
or such part of the Rule 462(b) Registration Statement, if any, became
effective and, as amended, at the time each incorporated document was
filed with the Commission are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Designated
Debt Securities, in the form in which it has most recently been filed,
or transmitted for filing, with the Commission on or prior to the date
of this Agreement, including any prospectus supplements thereto, is
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
the applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Initial Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a), 13(c)
or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated Debt
Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of
the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or
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necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder 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, in
the light of the circumstances under which they were made, not
misleading;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date, as of the date hereof and as of the date of execution
of the Pricing Agreement with respect to such Designated Debt
Securities as to the Registration Statement and any amendment thereto
and as of the applicable filing date and as of the Time of Delivery as
to the Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements in
the Registration Statement not misleading and the statements in the
Prospectus, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter of Designated Debt Securities through
the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Designated Debt Securities; and on the
applicable effective date and at the Time of Delivery, the Indenture
did and will comply in all material respects with the applicable
requirements of the Trust Indenture Act and the rules and regulations
thereunder;
(d) Neither the Company nor any of its Significant
Subsidiaries (as defined below) has sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus which loss or interference would have a Material Adverse
Effect (as defined below), or would reasonably be expected to have a
prospective Material Adverse Effect; and, since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other
than changes resulting from the exercise of stock options or the
conversions of warrants or capital stock which were outstanding as of
such date, or from the exercise of options granted after such date in
the ordinary course of business or from repurchases of capital stock)
or long-term debt of the Company or any of its Significant Subsidiaries
or any material adverse change, or any development that would
reasonably be expected to involve a prospective material adverse
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change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its Significant Subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly
existing as an exempted limited company in good standing under the laws
of the Cayman Islands, with full power and authority to own its
properties and conduct its business as described in the Prospectus and
has been duly qualified as a foreign company for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where such failure
to be so qualified in any such jurisdiction or to have any such power
or authority would not have a material adverse effect on the current or
future condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole or
the transactions contemplated by this Agreement (a "Material Adverse
Effect"); and 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;
(f) The Company had, on June 30, 2004, an authorized
capitalization as set forth in the Prospectus under the caption
"Actual" under the heading "Capitalization", and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(g) This Agreement has been duly authorized, executed and
delivered by the Company, and each Pricing Agreement has been duly
authorized by and, on the date thereof, will be duly executed and
delivered by the Company;
(h) Prior to the execution and delivery of the Pricing
Agreement relating to the Designated Debt Securities, the Designated
Debt Securities shall have been duly and validly authorized, and, when
the Designated Debt Securities are issued and delivered pursuant to the
this Agreement and the Pricing Agreement with respect to such
Designated Debt Securities, and when authenticated by the Trustee in
accordance with the provisions of the Indenture and delivered to and
paid for by the Underwriters, such Designated Debt Securities will have
been duly and validly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and remedies
and to general equity principles, and will be entitled to the benefits
provided by the Indenture; the Indenture has been duly authorized by
the Company, and at the Time of Delivery for such Designated Debt
Securities, will be duly executed and delivered by the Company and will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and remedies and to general
equity principles; the Indenture has been duly qualified under the
Trust Indenture Act;
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and the Designated Debt Securities and the Indenture will conform to
the descriptions thereof contained in the Prospectus as amended or
supplemented with respect to the Designated Debt Securities; the
Indenture is substantially in the form filed as an exhibit to the
Registration Statement;
(i) If the Pricing Agreement with respect to the Designated
Debt Securities specifies that such Designated Debt Securities shall be
listed on an exchange, the Designated Debt Securities will be duly
registered under the Exchange Act and will be authorized for listing on
such exchange subject to official notice of issuance, in each case,
prior to the Time of Delivery;
(j) The issue and sale of the Debt Securities, the execution
and delivery of this Agreement, any Pricing Agreement and the Indenture
and the compliance by the Company with all of the provisions this
Agreement, any Pricing Agreement, the Indenture and the Debt
Securities, and the consummation of the transactions contemplated
herein and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is
subject, nor will such action result in any violation of the provisions
of the Articles of Association or the Memorandum of Association (or
similar organizational documents) of the Company or any of its
Significant Subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body ("Governmental
Agency") having jurisdiction over the Company or any of its Significant
Subsidiaries or any of its respective properties except in each case
(other than with respect to such Articles of Association or Memorandum
of Association (or similar organizational documents)) for such
conflicts, violations, breaches or defaults which would not result in a
Material Adverse Effect;
(k) No consent, approval, authorization, order, filing,
registration or qualification of or with any such Governmental Agency
(a "Governmental Authorization") is required for the issue and sale by
the Company of the Debt Securities or the consummation by the Company
of the transactions contemplated by this Agreement or any Pricing
Agreement or the Indenture, except such as have been, or will have been
prior to the Time of Delivery, obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Debt Securities by the Underwriters;
(l) All of the issued share capital of each Significant
Subsidiary of the Company which is a corporation has been duly and
validly authorized and issued, is fully paid and non-assessable and
(except for (i) a 15% ownership interest in XL Financial Assurance Ltd.
owned by a third party and (ii) directors' qualifying shares) is owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (for purposes of this agreement,
"Subsidiary" means, as applied to any person, any corporation, limited
or general partnership, trust, association or other business entity of
which an aggregate of greater than
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50% of the outstanding Voting Shares of such person is, at any time,
directly or indirectly, owned by such person and/or one or more
subsidiaries of such person and "Significant Subsidiary" shall have the
meaning of "significant subsidiary" as set forth in Regulation S-X
under the Act; for purposes of the definition of " Subsidiary," "Voting
Shares" means, with respect to any corporation, the capital stock
having the general voting power under ordinary circumstances to elect
at least a majority of the board of directors (irrespective of whether
or not at the time stock of any other class or classes shall have or
might have voting power by reason of the happening of any
contingency));
(m) None of the transactions contemplated to be performed by
the Company by this Agreement (including, without limitation, the use
of the proceeds from the sale of the Designated Debt Securities) will
violate or result in a violation of Section 7 of the Exchange Act, or
any regulation promulgated thereunder, including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal
Reserve System;
(n) Prior to the date hereof, neither the Company nor, to the
Company's knowledge, any of its affiliates has taken any action which
is designed to or which has constituted or which might have been
expected to cause or result in stabilization or manipulation of the
price of any security of the Company in connection with the offering of
the Designated Debt Securities in violation of the Exchange Act;
(o) Other than as set forth or incorporated by reference in
the Prospectus, or as encountered in the ordinary course of business in
the Company's claims activities, there are no legal or governmental
actions, suits or proceedings pending to which the Company or any of
its Significant Subsidiaries is a party or of which any property of the
Company or any of its Significant Subsidiaries is the subject, which
would individually or in the aggregate reasonably be expected to have a
Material Adverse Effect on the operations of the Company and its
Significant Subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(p) The financial statements of the Company and its
consolidated subsidiaries incorporated by reference in 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, and except as
otherwise 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;
(q) 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 written notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(r) The Company is subject to Section 13 or 15(d) of the
Exchange Act;
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(s) Neither the Company nor any of its Significant
Subsidiaries is in violation of its Articles of Association or
Memorandum of Association (or similar organizational documents) or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound, except for such defaults which would not result in a Material
Adverse Effect;
(t) The statements set forth in the Prospectus as amended or
supplemented relating to the Designated Debt Securities under the
captions "Description of the Senior Notes," "Prospectus Supplement
Summary," and "Description of XL Capital Debt Securities", insofar as
they purport to constitute a summary of the terms of the Debt
Securities, the Indenture and the other transaction documents described
therein and the statements set forth under the caption "Certain Tax
Consequences" in the Prospectus as amended or supplemented relating to
the Designated Debt Securities insofar as they purport to describe the
provisions of the laws referred to therein, are accurate, complete and
fair in all material respects;
(u) The Company is not and, after giving effect to the
offering and sale of the Debt Securities, will not be an "investment
company", as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(v) PricewaterhouseCoopers LLP, the Company's auditors, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder; and
(w) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the Underwriters to the Cayman Islands or any political
subdivision or taxing authority thereof or therein in connection with
(A) the issuance, sale and delivery by the Company to or for the
respective accounts of the Underwriters of the Designated Debt
Securities or (B) the sale or delivery outside the Cayman Islands by
the Underwriters of the Designated Debt Securities to the initial
purchasers thereof, other than as described in the opinion of Appleby
Spurling Hunter delivered pursuant to Section 7(d) of this Agreement.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Debt Securities and authorization by the Representatives of the
release of the Designated Debt Securities, the several Underwriters propose to
offer the Designated Debt Securities for sale upon the terms and conditions set
forth in the Prospectus as amended or supplemented.
4. Designated Debt Securities to be purchased by each Underwriter
pursuant to the Pricing Agreement relating thereto, in the form specified in
such Pricing Agreement and in such authorized denominations and registered in
such names as the Representatives may request upon at least forty-eight hours'
prior notice to the Company, shall be delivered by or on behalf of the Company
to the Representatives for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by wire
transfer of Federal (same-day) funds to the account specified by the Company to
the Representatives at least twenty-four hours in advance as specified in such
Pricing Agreement, all in the manner and at the place and time and date
specified in
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such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "Time of Delivery" for such Debt Securities.
5. The Company agrees with each of the Underwriters of any Designated
Debt Securities:
(a) To prepare the Prospectus as amended or supplemented in
relation to the applicable Designated Debt Securities in a form
approved by the Representatives and to file such Prospectus pursuant to
Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and
delivery of the Pricing Agreement relating to the applicable Designated
Debt Securities or, if applicable, such earlier time as may be required
by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after
the date of the Pricing Agreement relating to such Debt Securities and
prior to any Time of Delivery for such Debt Securities which shall be
disapproved by the Representatives for such Debt Securities promptly
after reasonable notice thereof; to advise the Representatives promptly
of any such amendment or supplement so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Debt Securities and furnish the Representatives with copies thereof; to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for
so long as the delivery of a prospectus is required in connection with
the offering or sale of such Debt Securities, and during such same
period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Debt
Securities, of the suspension of the qualification of such Debt
Securities for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any prospectus relating to
the Debt Securities or suspending any such qualification, promptly to
use its best efforts to obtain the withdrawal of such order; the
Representatives shall advise the Company when the delivery of a
prospectus is no longer required in connection with the offer or sale
of Designated Debt Securities pursuant to this Section 5(a);
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Debt Securities
for offering and sale under the securities laws of such jurisdictions
as the Representatives may reasonably request and to comply with such
laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of such Debt Securities, provided that
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in connection therewith the Company shall not be required to qualify as
a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 3:00 P.M., New York City time, on the New York
Business Day next succeeding the date of the Pricing Agreement with
respect to the Designated Debt Securities and from time to time, to
furnish the Underwriters with written and electronic copies of the
Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of the Designated Debt Securities and if at such time
any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and
electronic copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Debt Securities and continuing to and
including the earlier of (i) the termination of trading restrictions
for such Designated Debt Securities, as notified to the Company by the
Representatives and (ii) the Time of Delivery for such Designated Debt
Securities, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company that mature more than one year
after such Time of Delivery and that are substantially similar to such
Designated Debt Securities, without the prior written consent of the
Representatives;
(f) To use its best efforts to cause the Designated Debt
Securities to be listed, and to maintain the listing of the Designated
Debt Securities, on the exchange, if any, set forth in Pricing
Agreement with respect to the Designated Debt Securities;
(g) To use the net proceeds received by it from the sale of
the Designated Debt Securities pursuant to this Agreement and the
Pricing Agreement in the manner set forth in the Prospectus as amended
or supplemented under the caption "Use of Proceeds;" and
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(h) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of the Pricing Agreement with respect to the
Designated Debt Securities, and the Company shall at the time of filing
either pay the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters,
subject to any agreements between the Company and the Representatives relating
to expenses, that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Debt Securities under the Act and the
issuance and sale of the Debt Securities and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and any amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, any Indenture, any Blue Sky
Memorandum, and any closing documents (including compilations thereof); (iii)
all expenses in connection with the qualification of the Debt Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Debt Securities; (v) any filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, any required reviews by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Debt Securities; (vi) the cost of preparing
the Debt Securities; (vii) the fees and expenses of any Trustee and any agent of
any Trustee and the fees and disbursements of counsel for any such persons in
connection with any Indenture or the Debt Securities; (viii) all expenses and
taxes arising as a result of the issuance, sale and delivery of the Designated
Debt Securities, of the sale and delivery outside of the Cayman Islands of the
Designated Debt Securities by the Underwriters to the initial purchasers thereof
in the manner contemplated under this Agreement and the Pricing Agreement,
including, in any such case, any Cayman Islands income, capital gains,
withholding, transfer or other tax asserted against a Underwriter by reason of
the purchase and sale of the Designated Debt Securities pursuant to the
Underwriting Agreement and the Pricing Agreement; (ix) any cost incurred in
connection with the listing of the Designated Debt Securities on the exchange,
if any, set forth in the Pricing Agreement with respect to the Designated Debt
Securities; and (x) all other costs and expenses incident to the performance of
its obligations hereunder and under any Pricing Agreement which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8, 11 and 19 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Debt Securities by them,
and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Debt
Securities under the Pricing Agreement relating to such Designated Debt
Securities shall be subject, in the discretion of the Representatives, to the
condition that all representations and warranties and other statements of the
Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Debt
11
Securities are, at and as of the Time of Delivery for such Designated Debt
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Debt Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date
of the Pricing Agreement with respect to such Designated Debt
Securities; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Simpson Thacher & Bartlett LLP, counsel for the
Underwriters, shall have furnished to the Representatives their written
opinion or opinions and letter, dated such Time of Delivery, in form
and substance reasonably satisfactory to the Representatives, in the
form attached hereto in Annex II-1 and Annex II-2, respectively, and
such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Cahill Gordon & Reindel LLP, United States counsel for the
Company, shall have furnished to the Representatives their written
opinion or opinions and letter, dated such Time of Delivery, in form
and substance reasonably satisfactory to the Representatives, in the
form attached hereto in Annex III-1 and Annex III-2, respectively;
(d) Appleby Spurling Hunter, Cayman Islands counsel for the
Company, shall have furnished to the Representatives their written
opinion or opinions, dated such Time of Delivery, in form and substance
reasonably satisfactory to the Representatives, in the form attached
hereto in Annex IV;
(e) Paul S. Giordano, Executive Vice President and General
Counsel to the Company, shall have furnished to the Representatives his
written opinion or opinions, dated such Time of Delivery, in form and
substance reasonably satisfactory to the Representatives, in the form
attached hereto in Annex V;
(f) On the date of the Pricing Agreement for such Designated
Debt Securities and at the Time of Delivery for such Designated Debt
Securities, PricewaterhouseCoopers LLP, the independent registered
public accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated
by reference in the Registration Statement shall have furnished to the
Representatives a letter or letters, dated the respective dates of
delivery thereof, in form and substance reasonably satisfactory to the
Representatives;
12
(g) (i) Neither the Company nor any of its Significant
Subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Debt Securities any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Agreement relating to the Designated Debt
Securities, and (ii) since the respective dates as of which information
is given in the Prospectus as amended or supplemented prior to the date
of the Pricing Agreement relating to the Designated Debt Securities,
there shall not have been any change in the capital stock (other than
changes resulting from the exercise of options or the conversion of
warrants or capital stock which were outstanding as of such date, or
from the exercise of options granted after such date in the ordinary
course of business or from repurchases of capital stock) or long-term
debt of the Company or any of its Significant Subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
Significant Subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated Debt
Securities, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impractical or inadvisable to proceed with the
public offering or the delivery of the Designated Debt Securities on
the terms and in the manner contemplated in the Prospectus as amended
or supplemented relating to the Designated Debt Securities;
(h) On or after the date of the Pricing Agreement relating to
the Designated Debt Securities (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities or the Company's
financial strength or claims paying ability by any "nationally
recognized statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
other than any announcements made prior to the date of the Pricing
Agreement, no such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities or the Company's
financial strength or claims paying ability;
(i) On or after the date of the Pricing Agreement relating to
the Designated Debt Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange (the "Exchange");
(ii) a suspension or material limitation in trading in the Company's
securities on the Exchange; (iii) a general moratorium on commercial
banking activities in New York, the Cayman Islands or Bermuda declared
by the relevant authority or a material disruption in commercial
banking or securities settlement or clearance services in the United
States or any other relevant jurisdiction; (iv) the outbreak or
escalation of hostilities involving the United States, the Cayman
Islands or Bermuda or the declaration by the United States, the Cayman
Islands or Bermuda of a national emergency or war, if the effect of any
such event specified in this clause (iv) in the judgment of the
Representatives is so material and adverse as to make it
13
impractical or inadvisable to proceed with the public offering or the
delivery of the Designated Debt Securities on the terms and in the
manner contemplated in the Prospectus as amended or supplemented
relating to the Designated Debt Securities; (v) a change or development
involving a prospective change in the Cayman Islands or Bermuda
taxation affecting the Company, the Designated Debt Securities or the
transfer thereof or the imposition of exchange controls by the United
States, Bermuda or the Cayman Islands or (vi) the occurrence of any
other calamity or crisis or any change in financial, political or
economic conditions in the United States or currency exchange rates or
controls in the United States, the Cayman Islands, Bermuda or
elsewhere, if the effect of any such event specified in this clause
(vi) in the judgment of the Representatives is so material and adverse
as to make it impractical or inadvisable to proceed with the public
offering or the delivery of the Designated Debt Securities on the terms
and in the manner contemplated in the Prospectus as amended or
supplemented relating to the Designated Debt Securities;
(j) The Designated Debt Securities at the Time of Delivery
shall have been duly listed, subject to notice of issuance, on the
exchange, if any, set forth in the Pricing Agreement with respect to
such Designated Debt Securities;
(k) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of the Pricing
Agreement relating to such Designated Debt Securities;
(l) The Company shall have furnished or caused to be furnished
to the Representatives at the Time of Delivery for the Designated Debt
Securities certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) relating to the effectiveness of the
Registration Statement and no stop orders, the matters set forth in
subsections (g) and (h) of this Section and as to such other matters as
the Representatives may reasonably request; and
(m) Prior to the Time of Delivery, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Debt Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal expenses of one counsel (in addition to
any local counsel) engaged reasonably incurred by such Underwriter in
14
connection with investigating or defending any such action or claim as such
expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Debt
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Debt Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Debt Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Debt Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Debt Securities, or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred, including the reasonable fees and expenses of one counsel (in addition
to any applicable local counsel).
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation (except as set forth below). Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the
15
right to employ separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of interest;
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Debt Securities on the other from the offering of the
Designated Debt Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters of the Designated Debt Securities on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and such Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by such Underwriters. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or such Underwriters on the other 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 contributions pursuant to this subsection (d) 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
16
which does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Designated Debt Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Underwriters
of Designated Debt Securities in this subsection (d) to contribute are several
in proportion to their respective underwriting obligations with respect to such
Debt Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Debt Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Debt Securities, the Representatives may
in their discretion arrange for themselves or another party or other parties
satisfactory to the Company to purchase such Designated Debt Securities on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such
Designated Debt Securities then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Designated Debt
Securities on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Designated Debt Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated Debt
Securities, the Representatives or the Company shall have the right to postpone
the Time of Delivery for such Designated Debt Securities for a period of not
more than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Debt Securities.
17
(b) If, after giving effect to any arrangements for the purchase of the
Designated Debt Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Debt Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Debt Securities, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the principal amount of Designated
Debt Securities which such Underwriter agreed to purchase under the Pricing
Agreement relating to such Designated Debt Securities and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on
the principal amount of Designated Debt Securities which such Underwriter agreed
to purchase under such Pricing Agreement) of the Designated Debt Securities of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Debt Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated Debt
Securities to be purchased at the Time of Delivery, as referred to in subsection
(b) above, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Designated Debt Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Debt Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Debt Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Debt Securities with respect to which such
Pricing Agreement shall have been terminated except as provided in Sections 6, 8
and 19 hereof; but, if for any other reason, Designated Debt Securities are not
delivered by or on behalf of the Company as provided herein, the Company will
reimburse the Underwriters through the Representatives for all out-of-pocket
expenses approved in writing by the Representatives, including reasonable fees
and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Debt
Securities, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Debt Securities except as provided
in Sections 6, 8 and 19 hereof.
18
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Debt Securities shall act on behalf of each of such Underwriters,
and the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; PROVIDED, HOWEVER, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its principal
address, which address will be supplied to the Company by the Representatives
upon written request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Debt
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. The Company irrevocably (i) agrees that any legal suit, action or
proceeding against the Company brought by any Underwriter or by any person who
controls any Underwriter arising out of or based upon this Agreement, any
Pricing Agreement or the transactions contemplated hereby or thereby may be
instituted in the federal district court for the Southern District of New York
and the New York County Court, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the exclusive
jurisdiction of such courts in any such suit, action or proceeding. The Company
has appointed CT Corporation System, New York, New York, as its authorized agent
(the "Authorized Agent") upon whom process may be served in any such action
arising out of or based on this Agreement, any Pricing Agreement or the
transactions contemplated hereby or thereby which may be instituted in the
federal district court for the Southern District of New York and the New York
County Court by any Underwriter or by any person who controls any Underwriter,
expressly consents to the jurisdiction of any such court in respect of any such
action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable. The
Company represents and warrants that the Authorized Agent has agreed to act as
such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.
19
15. Time shall be of the essence in each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business. "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
16. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
18. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, without the Underwriters imposing any limitation of any kind.
19. In respect of any judgment or order given or made for any amount
due hereunder or under any Pricing Agreement that is expressed and paid in a
currency (the "judgment currency") other than United States dollars, the Company
will indemnify each Underwriter against any loss incurred by such Underwriter as
a result of any variation between (i) the rate of exchange at which the United
States dollar amount is converted into the judgment currency for the purpose of
such judgment or order and (ii) the rate of exchange at which an Underwriter is
able to purchase United States dollars with the amount of judgment currency
actually received by such Underwriter. The foregoing indemnity shall constitute
a separate and independent obligation of the Company and shall continue in full
force and effect notwithstanding any such judgment or order aforesaid. The term
"rate of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
20
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and one for each of the Representatives
counterparts hereof.
Very truly yours,
XL Capital Ltd
By: /s/ Christopher V. Greetham
-----------------------------------
Name: Christopher V. Greetham
Title: Executive Vice President &
Chief Investment Officer
Accepted as of the date hereof:
Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
By: Morgan Stanley & Co. Incorporated
By: /s/ Harold J. Hendershot III
-----------------------------
Name: Harold J. Hendershot III
Title: Executive Director
By: Lehman Brothers Inc.
By: /s/ Martin Goldberg
-----------------------------
Name: Martin Goldberg
Title: Senior Vice President
ANNEX I
PRICING AGREEMENT
-----------------
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
As Representatives of the several
Underwriters named in Schedule I hereto
August 18, 2004
Ladies and Gentlemen:
XL Capital Ltd, a Cayman Islands exempted limited company (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated August 18, 2004 (the "Underwriting
Agreement"), between the Company on the one hand and Morgan Stanley & Co.
Incorporated and Lehman Brothers Inc., on the other hand, to issue and sell to
the Underwriters named in Schedule I hereto (the "Underwriters") the Debt
Securities specified in Schedule II hereto (the "Designated Debt Securities").
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Debt Securities which are the subject of this Pricing Agreement.
Each reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Debt Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Debt Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the aggregate principal amount of Designated Debt Securities set forth opposite
the name of such Underwriter in Schedule I hereto.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and one for each of the Representatives
plus one for each counsel counterparts hereof, and upon acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination, upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
XL Capital Ltd
By: ________________________________
Name:
Title:
Accepted as of the date hereof:
Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
By: Morgan Stanley & Co. Incorporated
By:_____________________________
Name:
Title:
By: Lehman Brothers Inc.
By:_____________________________
Name:
Title:
For themselves and the other several Underwriters named in Schedule I to the
foregoing Agreement.
SCHEDULE I
PRINCIPAL AMOUNT OF
DESIGNATED DEBT SECURITIES
UNDERWRITER TO BE PURCHASED
Morgan Stanley & Co. Incorporated $150,000,000
Lehman Brothers Inc. $150,000,000
------------
Total............................................. $300,000,000
============
SCHEDULE II
TITLE OF DESIGNATED DEBT SECURITIES:
5.25% Senior Notes due 2014
AGGREGATE PRINCIPAL AMOUNT OF DESIGNATED DEBT SECURITIES:
$300,000,000
INITIAL OFFERING PRICE TO PUBLIC:
99.432% of the principal amount of the Designated Debt Securities, plus
accrued interest, if any, from August 23, 2004.
PURCHASE PRICE BY UNDERWRITERS:
98.982% of the principal amount of the Designated Debt Securities, plus
accrued interest, if any, from August 23, 2004.
UNDERWRITERS' COMMISSION:
0.450%
FORM OF DESIGNATED DEBT SECURITIES:
Book-entry only form represented by one or more global certificates
deposited with The Depository Trust Company ("DTC") of its designated custodian,
to be made available for checking by the Representatives at least 24 hours prior
to the Time of Delivery.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (Same-Day) funds
INDENTURE:
Indenture, dated June 2, 2004, between the Company and The Bank of New
York, as Trustee, as supplemented by the First Supplemental Indenture, to be
dated as of August 23, 2004
MATURITY:
September 15, 2014
INTEREST RATE:
5.25% per annum
INTEREST PAYMENT DATES:
March 15 and September 15, commencing on March 15, 2005
RECORD DATES:
The relevant record dates will be the March 1 and September 1 preceding
the relevant payment dates
REDEMPTION PROVISIONS:
The Notes are redeemable at the option of the Company (i) in whole at
any time or in part from time to time at a make-whole redemption price described
in the Prospectus under the caption "Description of the Senior Notes--Optional
Redemption" and (ii) if a "tax event" occurs, as described in the Prospectus
under the caption "Description of the Senior Notes--Tax Event Redemption"), in
each case in accordance with and subject to the terms to be set forth in the
Indenture.
SINKING FUND PROVISIONS:
No sinking fund provisions
ADDITIONAL CLOSING CONDITIONS:
None
TIME OF DELIVERY:
9:30 A.M., New York City time, on August 23, 2004
TIME OF DELIVERY LOCATION:
Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New
York 10017
DELAYED DELIVERY:
None
LISTING:
None
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
Address for Notices, etc.: Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Attn: Financial Services Group
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Attn: Debt Capital Markets,
Financial Institutions
Group (with a copy to the General
Counsel at the same address)
OTHER TERMS:
None
ANNEX II-1
SIMPSON THACHER & BARTLETT LLP FORM OF OPINION
ANNEX II-2
SIMPSON THACHER & BARTLETT LLP FORM OF NEGATIVE ASSURANCE LETTER
ANNEX III-1
CAHILL GORDON & REINDEL LLP FORM OF OPINION
ANNEX III-2
CAHILL GORDON & REINDEL LLP FORM OF NEGATIVE ASSURANCE LETTER
ANNEX IV
APPLEBY SPURLING HUNTER FORM OF OPINION
ANNEX V
XL CAPITAL LTD FORM OF OPINION