Exhibit 1.2
The Chubb Corporation
16,000,000 Common Stock Purchase Contracts
$400,000,000 2.25% Senior Notes Due 2008
in the form of
16,000,000 7.00% Corporate Units
Underwriting Agreement
New York, New York
June 18, 2003
Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center, North Tower
New York, NY 10080
As Representatives of the several Underwriters
Ladies and Gentlemen:
The Chubb Corporation, a corporation organized under the laws of New
Jersey (the "COMPANY"), proposes to issue and sell to the several underwriters
named in Schedule II hereto (the "UNDERWRITERS"), for whom you (the
"REPRESENTATIVES") are acting as representatives, the number of its Common Stock
Purchase Contracts set forth in Schedule I hereto (each a "PURCHASE CONTRACT"
and collectively the "PURCHASE CONTRACTS") and the aggregate principal amount of
its debt securities identified in Schedule I hereto (the "NOTES") (said Purchase
Contracts and Notes to be issued and sold by the Company being hereinafter
called the "UNDERWRITTEN SECURITIES") and, at the election of the Underwriters,
an option to purchase up to the number of additional Purchase Contracts and
additional aggregate principal amount of Notes set forth in Schedule I hereto
(the "OPTION SECURITIES"; the Option Securities, together with the Underwritten
Securities, being hereinafter called the "SECURITIES"). The
Purchase Contracts and Notes will be issued together in the form of 7.00%
Corporate Units (the "CORPORATE UNITS"), each of which will represent one
Purchase Contract and $25 principal amount of the Notes. The Purchase Contracts
will be issued under a Purchase Contract Agreement dated as of the Closing Date
(as defined herein) (the "PURCHASE CONTRACT AGREEMENT") between the Company and
Bank One Trust Company, N.A., as Purchase Contract agent (the "PURCHASE CONTRACT
AGENT"). Each Purchase Contract will obligate the holder to purchase from the
Company on August 16, 2006 for a settlement price of $25 in cash the number of
shares of Common Stock, $1.00 par value (the "COMMON STOCK") of the Company
specified in the Purchase Contract Agreement, together with the rights (the
"RIGHTS") evidenced by such Common Stock to the extent provided in the Rights
Agreement dated as of March 12, 1999 between the Company and EquiServe Trust
Company, N.A. The Notes will be issued under the Senior Indenture (the
"INDENTURE") dated as of October 25, 1989 between the Company and Bank One Trust
Company, N.A., successor in interest to the First National Bank of Chicago, as
trustee (the "TRUSTEE"). The holders of the Corporate Units will pledge their
interests in the Notes represented by the Corporate Units to BNY Midwest Trust
Company, as collateral agent (the "COLLATERAL AGENT"), under a Pledge Agreement
dated as of the Closing Date (the "PLEDGE AGREEMENT") among the Company, the
Purchase Contract Agent and the Collateral Agent to secure their obligations
under the Purchase Contracts to purchase shares of Common Stock. The Company
simultaneously proposes to issue and sell 13,500,000 shares of Common Stock (or
15,525,000 if the Underwriters exercise their option to purchase additional
shares in full). The offering of the Securities and the Common Stock are not
conditioned on each other. To the extent there are no additional Underwriters
listed on Schedule II other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed
to be incorporated therein by reference. Certain terms used herein are defined
in Section 17 hereof.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
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(a) The Company meets the requirements for use of Form
S-3 under the Act and has prepared and filed with the Commission a
registration statement (the file number of which is set forth in
Schedule I hereto) on Form S-3, including a related basic prospectus,
for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto,
including a Preliminary Final Prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission
one of the following: (i) after the Effective Date of such registration
statement, a final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b), (ii) prior to the Effective Date
of such registration statement, an amendment to such registration
statement (including the form of final prospectus supplement) or (iii)
a final prospectus in accordance with Rules 415 and 424(b). In the case
of clause (i), the Company has included in such registration statement,
as amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Final Prospectus. As
filed, such final prospectus supplement or such amendment and form of
final prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein. The Registration
Statement, at the Execution Time, meets the requirements set forth in
Rule 415(a)(1)(x);
(b) On the Effective Date, the Registration Statement did
or will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date and on any date on
which Option Securities are purchased, if such date is not the Closing
Date (a "SETTLEMENT DATE"), the Final Prospectus (and any supplement
thereto) will, comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act
and the respective rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Final Prospectus, if not filed pursuant to Rule 424(b), will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing
Date and any settlement date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
(i) that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement
thereto);
(c) The Company and each of its subsidiaries that is a
"significant subsidiary" within the meaning of Rule 1-02 of Regulation
S-X (each a "Subsidiary") have been duly incorporated and are validly
existing as corporations in good standing under the laws of the
jurisdiction in which they are chartered or organized with full
corporate power and authority to own or lease, as the case may be, and
to operate their properties and conduct their business as described in
the Final Prospectus, and are duly qualified to do business as foreign
corporations and are in good standing under the laws of each
jurisdiction in which the conduct of their business or their ownership
or leasing of property requires such qualification, except to the
extent the failure to be so qualified or in good standing would not
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT");
(d) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Final Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances, except in
each case as would not have a Material Adverse Effect;
(e) Since the respective dates as of which information is
given in the final Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
(B) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except
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for regular dividends on the Common Stock in amounts per share that are
consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
of its capital stock.
(f) The Company's authorized equity capitalization is as
set forth in the Final Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof contained
in the Final Prospectus; the outstanding shares of Common Stock have
been duly and validly authorized and issued and are fully paid and
nonassessable; and the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights to
subscribe for the Securities; and, except as set forth in the Final
Prospectus, no options, Purchase Contracts or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding;
(g) Each of the Purchase Contract Agreement and the
Pledge Agreement has been duly authorized by the Company, and when
executed and delivered by the Company, will each constitute a legal,
valid and binding instrument enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and to general
principles of equity); and the Purchase Contracts have been duly
authorized, and, when executed and authenticated in accordance with the
provisions of the Purchase Contract Agreement and delivered to and paid
for by the Underwriters pursuant to this Agreement, will constitute
legal, valid and binding obligations of the Company entitled to the
benefits of the Purchase Contract Agreement;
(h) The Corporate Unit certificates have been duly and
validly authorized and on the Closing Date will be duly executed and
delivered;
(i) (i) The shares of Common Stock issuable upon exercise
of the Purchase Contracts have been duly authorized and reserved and,
when issued upon exercise of the Purchase Contracts in accordance with
the terms of the Purchase Contracts, will be validly issued, fully paid
and non-assessable, and the issuance of such shares will not be subject
to any preemptive or similar rights and (ii) the Rights, if any,
issuable upon exercise of the Purchase Contracts have been duly
authorized and, when and if issued upon exercise of the Purchase
Contracts in accordance with the terms of the Purchase Contract
Agreement and the Rights Agreement, will have been validly issued;
(j) The Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
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constitutes a valid and binding instrument enforceable against the
Company in accordance with its terms (subject to applicable bankruptcy,
insolvency and similar laws affecting creditors rights generally and to
general principles of equity); and the Notes have been duly authorized
and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture;
(k) There is no franchise, contract or other document of
a character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Final
Prospectus under the headings "Description of the Equity Units",
"Description of the Purchase Contracts", "Certain Provisions of the
Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement", "Description of the Senior Notes", "Description of Debt
Securities", "Description of Capital Stock", "Description of Purchase
Contracts" and "United States Federal Income Tax", and the statements
in the Final Prospectus incorporated by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 2002 under
the headings: Item 1. "Business--Regulation, Premium Rates and
Competition" and Item 3. "Legal Proceedings", insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings;
(l) This Agreement has been duly authorized, executed and
delivered by the Company;
(m) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940,
as amended;
(n) No consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as
have been or will have been obtained prior to the Closing Date under
the Act and the Trust Indenture Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Final Prospectus;
(o) Neither the issue and sale of the Securities, nor the
compliance of the Company with the terms of the Securities nor the
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consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its Subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its Subsidiaries or any of its
or their properties except in the case of clauses (ii) and (iii) as
would not reasonably be expected to have a Material Adverse Effect;
(p) No holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement;
(q) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Final Prospectus and the Registration Statement present fairly in
all material respects the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein);
and the statutory financial statements of the Company's subsidiaries
that are insurance companies (the "COMPANY INSURANCE SUBSIDIARIES"),
from which certain ratios and other statistical data filed or
incorporated by reference as part of the Registration Statement have
been derived have for each relevant period been prepared in all
material respects in conformity with statutory accounting practices
required or permitted by the insurance laws of their respective states
of domicile, and the rules and regulations promulgated thereunder, and
such statutory accounting practices have been applied on a consistent
basis throughout the periods involved, except as may otherwise be
indicated therein or in the notes thereto;
(r) No action, suit or proceeding by or before any court
or governmental agency, authority (including proceedings of any
insurance regulatory authority) or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) would
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated
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hereby or (ii) would reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto);
(s) Neither the Company nor any Subsidiary is in
violation or default of (i) any provision of its charter or bylaws,
(ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such Subsidiary or any of its
properties, as applicable, except in the case of clauses (ii) and (iii)
for any violations or defaults which would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(t) Ernst & Young LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Final Prospectus,
are independent public accountants with respect to the Company within
the meaning of the Act and the applicable published rules and
regulations thereunder;
(u) There are no transfer taxes or other similar fees or
charges under Federal law or the law of any states, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities;
(v) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company any loans or advances to such Subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other Subsidiary of the Company, except as
described in or contemplated by the Final Prospectus;
(w) The Company and each of 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) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded
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accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences;
(x) The Company and its Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities (including
any insurance regulatory authority) necessary to conduct their
respective businesses as presently conducted (except as would not
reasonably be expected to have a Material Adverse Effect), and neither
the Company nor any such Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
would reasonably be expected to have a Material Adverse Effect, except
as set forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto);
(y) The Company has not taken, directly or indirectly,
any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities; and
(z) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply in all material respects with any
provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the "SARBANES-OXLEY
ACT"), including Section 402 related to loans and Sections 302 and 906
related to certification; and
(aa) Except as disclosed in the Registration Statement and
the Final Prospectus and other than its co-investment with Goldman,
Sachs & Co. in Allied World Assurance Holdings, Ltd., the Company (i)
does not have any material lending or other relationship with any bank
or lending affiliate of any Underwriter and (ii) does not intend to use
any of the proceeds from the sale of the Securities hereunder to repay
any outstanding debt owed to any affiliate of any Underwriter.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price set
forth in Schedule I
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hereto, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants to
the several Underwriters the right to purchase at their election, severally and
not jointly, up to the maximum number of Option Securities set forth in Schedule
I hereto at the same purchase price per Option Security as the Underwriters
shall pay for the Underwritten Securities, for the sole purpose of covering
sales of Purchase Contracts and Notes, in the form of Corporate Units, in excess
of the number of Underwritten Securities. No adjustment shall be made to the
purchase price on any Option Security for any accrued interest. Said option may
be exercised only if the Underwriters sell more than the number of Underwritten
Securities. Said option may be exercised in whole or in part at any time (but
not more than once) on or before the Business Day preceding the 13th day after
the Closing Date upon written or telegraphic notice by the Representatives to
the Company setting forth the number of Option Securities as to which the
several Underwriters are exercising the option and the settlement date (which
shall not be later than the 13th day after the Closing Date). The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as you in your absolute discretion shall
make to eliminate any fractional Option Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made on the date and at the time
specified in Schedule I hereto or at such time on such later date not more than
three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"CLOSING DATE"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by wire transfer payable in same-day funds
to an account specified by the Company. Delivery of the Underwritten Securities
and the Option Securities shall be made in the form of Corporate Units delivered
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at the
place in the City of New York, New York and on the date specified by the
Representatives
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(which shall be within three Business Days after exercise of said option) for
the respective accounts of the several Underwriters, against payment by the
several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by wire transfer payable in same-day funds
to an account specified by the Company. If settlement for the Option Securities
occurs after the Closing Date, the Company will deliver to the Representatives
on the settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Agreements. (a) The Company agrees with the several
Underwriters that:
(i) The Company will use its best efforts to
cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereof, to become
effective. Prior to the termination of the offering of the
Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus or any Rule 462(b) Registration Statement unless
the Company has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become
or becomes effective pursuant to Rule 430A, or filing of the
Final Prospectus is otherwise required under Rule 424(b), the
Company will cause the Final Prospectus, properly completed,
and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Company will
promptly advise the Representatives (A) when the Registration
Statement, if not effective at the Execution Time, shall have
become effective, (B) when the Final Prospectus, and any
supplement thereto, shall have been filed (if required) with
the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the
Commission, (C) when, prior to termination of the offering of
the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (D) of any request
by the Commission or its staff for any amendment of the
Registration Statement, or
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any Rule 462(b) Registration Statement, or for any supplement
to the Final Prospectus or for any additional information, (E)
of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose
and (F) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the institution or
threatening of any proceeding for such purpose. The Company
will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating
to the Securities is required to be delivered under the Act,
any event occurs as a result of which the Final Prospectus as
then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be
necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company promptly
will (A) notify the Representatives of such event, (B) prepare
and file with the Commission, subject to the second sentence
of Section 5(a)(i), an amendment or supplement which will
correct such statement or omission or effect such compliance
and (C) supply any supplemented Final Prospectus to you in
such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will
make generally available to its security holders and to the
Representatives an earnings statement or statements of the
Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(iv) The Company will furnish to the
Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Final
Prospectus and the Final Prospectus and any supplement thereto
as the Representatives may reasonably request. The Company
will pay the expenses of printing or other production of all
documents relating to the offering.
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(v) The Company will arrange, if necessary, for
the qualification of the Securities for sale under the laws of
such jurisdictions as the Representatives may designate, will
maintain such qualifications in effect so long as required for
the distribution of the Securities and will pay any fee of the
National Association of Securities Dealers, Inc., in
connection with its review of the offering; provided that in
no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of
process in suits, other than those arising out of the offering
or sale of the Securities, in any jurisdiction where it is not
now so subject.
(vi) The Company will not, without the prior
written consent of the Representatives, offer, sell, contract
to sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of
the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, including
the filing (or participation in the filing) of a registration
statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of
the Exchange Act, any shares of Common Stock or any securities
convertible into, or exercisable, or exchangeable for, shares
of Common Stock; or publicly announce an intention to effect
any such transaction, until the Business Day set forth on
Schedule I hereto, provided, however, that (A) the Company may
issue and sell 13,500,000 shares of Common Stock (or
15,525,000 if the Underwriters exercise their option to
purchase additional shares of Common Stock in full) in the
concurrent offering, (B) the Company may issue and sell Common
Stock pursuant to any employee stock option plan, stock
ownership plan or dividend reinvestment plan of the Company in
effect at the Execution Time, (C) the Company may issue Common
Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time and (D)
the Company may issue stock options and restricted stock to
employees, provided that such options are not exercisable, and
such restricted stock grants do not vest, before such date.
(vii) The Company will not take, directly or
indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, stabilization or manipulation
of the price of any
13
security of the Company to facilitate the sale or resale of
the Securities.
(viii) The Company shall apply to list the
Securities for trading on the New York Stock Exchange promptly
after the Closing Date.
(ix) The Company will comply in all material
respects with all applicable securities and other applicable
laws, rules and regulations, including, without limitation,
the Sarbanes-Oxley Act, and will use its best efforts to cause
the Company's directors and officers, in their capacities as
such, to comply with such laws, rules and regulations,
including without limitation, the provisions of the
Sarbanes-Oxley Act.
(x) The Company will not take, directly or
indirectly any action designed to or that would constitute or
that might reasonably be expected to cause or result in under
the Exchange Act or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(b) Each Underwriter severally represents and agrees
that:
(i) it has not offered or sold and, prior to the
expiry of six months from the Closing Date, will not offer or
sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995;
(ii) it has only communicated and caused to be
communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in
investment activity (within the meaning of section 21 of the
Financial Services and Markets Act 2000 ("FSMA")) received by
it in connection with the issue or sale of any International
Securities in circumstances in which section 21(1) of the FSMA
does not apply to the Company;
(iii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything
done
14
by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and
(iv) the offer in The Netherlands of the
Securities is exclusively limited to persons who trade or
invest in securities in the conduct of a profession or
business (which includes banks, stockbrokers, insurance
companies, pension funds, other institutional investors and
finance companies and treasury departments of large
enterprises).
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the Representatives agree
in writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Joanne L.
Bober, General Counsel for the Company, to have furnished to the
Representatives her opinion, dated the Closing Date and addressed to
the Representatives, substantially in the form set forth in Exhibit B.
(c) The Company shall have requested and caused Debevoise
& Plimpton, outside counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to
the Representatives, substantially in the form set forth in Exhibit C.
(d) The Company shall have requested and caused Drinker
Biddle & Reath LLP, outside New Jersey counsel for the Company, to
15
have furnished to the Representatives their opinion, dated the Closing
Date and addressed to the Representatives, substantially in the form
set forth in Exhibit D.
(e) The Representatives shall have received from Davis
Polk & Wardwell, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date and addressed to the Representatives,
with respect to the issuance and sale of the Securities, the
Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably 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 Company shall have furnished to the
Representatives a certificate of the Company, signed by the Chairman or
Vice Chairman of the Board or the President and the principal financial
or accounting officer or the treasurer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus,
any supplements to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the
Closing Date and the Company has complied in all material
respects with all the agreements and satisfied in all material
respects all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the Final
Prospectus (exclusive of any supplement thereto), there has
been no material adverse change in on the condition (financial
or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(g) The Company shall have requested and caused Ernst &
Young LLP to have furnished to the Representatives, at the Execution
16
Time and at the Closing Date, letters (which may refer to letters
previously delivered to one or more of the Representatives), dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Act and the
respective applicable rules and regulations adopted by the Commission
thereunder and that they have performed a review of the unaudited
interim financial information of the Company for the three-month period
ended March 31, 2003, and as at March 31, 2003, in accordance with
Statement on Auditing Standards No. 100, and stating in effect, except
as provided in Schedule I hereto, that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement and
the Final Prospectus and reported on by them comply as to form
in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the executive,
finance and audit committees of the Company and the
Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to March 31, 2003, nothing came to their
attention which caused them to believe that:
(A) any unaudited financial statements
included or incorporated by reference in the
Registration Statement and the Final Prospectus do
not comply as to form in all material respects with
applicable accounting requirements of the Act and
with the related rules and regulations adopted by the
Commission with respect to financial statements
included or incorporated by reference in quarterly
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included or incorporated
by
17
reference in the Registration Statement and the Final
Prospectus;
(B) with respect to the period
subsequent to March 31, 2003, there were any
increases, at a specified date not more than five
days prior to the date of the letter, in the
long-term debt of the Company and its subsidiaries or
decreases in the shareholders' equity of the Company
as compared with the amounts shown on the March 31,
2003 consolidated balance sheet included or
incorporated by reference in the Registration
Statement and the Final Prospectus, or for the period
from April 1, 2003 to May 31, 2003 there were any
decreases, as compared with the corresponding period
in the preceding year, in total revenues or premiums
earned of the Company and its subsidiaries, except in
all instances for changes or decreases set forth in
such letter, in which case the letter shall be
accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives; or
(C) the information included or
incorporated by reference in the Registration
Statement and Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information), Item
402 (Executive Compensation) and Item 503(d) (Ratio
of Earnings to Fixed Charges) is not in conformity
with the applicable disclosure requirements of
Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibit 12 to the
Registration Statement, including the information set forth
under the captions "Summary Historical Financial Data" and
"Capitalization" in the Final Prospectus, the information
included or incorporated by reference in Items 5-8 and 10-13
inclusive of the Company's Annual Report on Form 10-K,
incorporated by reference in the Registration Statement and
the Final Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q,
18
incorporated by reference in the Registration Statement and
the Final Prospectus, agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Final Prospectus in this paragraph 6(g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in Section 6(g) or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated
by the Registration Statement (exclusive of any amendment thereof) and
the Final Prospectus (exclusive of any supplement thereto).
(i) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(j) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(k) The Company shall have used commercially reasonable
best efforts to furnish, at the Execution Time, and the Company shall
have furnished, on or prior to the Closing Date, to the Representatives
a letter substantially in the form of Exhibit A hereto from each
executive officer and director of the Company addressed to the
Representatives.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance
19
to the Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Davis Polk & Wardwell, counsel for the Underwriters,
at 450 Lexington Avenue, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Citigroup Global Markets Inc. on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
8. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof 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
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will 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 any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion
20
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors and each of its officers
who signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in the last paragraph of the cover page regarding delivery of the
Securities and, under the heading "Underwriting": (i) the table listing the
Underwriters and their respective participation in the sale of the Securities,
(ii) following the table of underwriters and their shares, the second paragraph
and the fifth paragraph (including the four bullets thereunder relating to the
international offerings) and (iii) following the table regarding underwriting
discounts and commissions, the first, second, and third paragraphs in any
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph 8(a) or 8(b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph 8(a) or 8(b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the 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
21
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. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph 8(a) or
8(b) is unavailable to or insufficient to hold harmless an indemnified party for
any reason, the Company and the Underwriters severally agree to contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "LOSSES") to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters
severally shall contribute 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 of the Underwriters on the other in connection with the statements
or omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Final Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to
22
state a material fact relates to information provided by the Company on the one
hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph 8(d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph 8(d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior
23
to delivery of and payment for the Securities, if at any time prior to such time
(a) trading in the Company's Common Stock shall have been suspended by the
Commission on the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on the New York Stock Exchange, (b) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (c) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to Citigroup Global Markets Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 388 Greenwich Street, New York, New York, 10013, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to the General Counsel, The Chubb Corporation (fax no.: 908-903-3607)
and confirmed to it at the office of the General Counsel, The Chubb Corporation,
15 Mountain View Road, Warren, New Jersey 07059.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
24
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"ACT" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"BASIC PROSPECTUS" shall mean the prospectus referred to in paragraph
1(a) above contained in the Registration Statement at the Effective Date
including any Preliminary Final Prospectus.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"COMMISSION" shall mean the Securities and Exchange Commission.
"EFFECTIVE DATE" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"FINAL PROSPECTUS" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"PRELIMINARY FINAL PROSPECTUS" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus, together
with the Basic Prospectus.
"REGISTRATION STATEMENT" shall mean the registration statement referred
to in paragraph 1(a) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such
25
term shall include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A.
"RULE 415", "RULE 424", "RULE 430A" and "RULE 462" refer to such rules
under the Act.
"RULE 430A INFORMATION" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"RULE 462(b) REGISTRATION STATEMENT" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the offering covered by the registration statement referred to in Section 1(a)
hereof.
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated thereunder.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
The Chubb Corporation
By: /s/ JOHN D. FINNEGAN
------------------------------------
John D. Finnegan
Chief Executive Officer
27
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Citigroup Global Markets Inc.
By: /s/ RICHARD SPIRO
Goldman, Sachs & Co.
By: /s/ GOLDMAN, SACHS & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ JOSEPH E. CONSOLINO
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
28
SCHEDULE I
Underwriting Agreement dated................................... June 18, 2003
Registration Statement No...................................... 333-104310
Title, Purchase Price and Number of Securities:
Title:..................................................... Common Stock Purchase
Contracts
2.25% Senior Notes due
August 16, 2008
issued together in the
form of
7.00% Corporate Units,
each representing one
Common Stock Purchase
Contract and $25
principal amount of
2.25% Senior Notes
Purchase Price Per Corporate Unit.......................... $24.25
Price to Public Per Corporate Unit $25.00
Number of Underwritten Securities
to be sold by the Company.................................. 16,000,000 Common
Stock Purchase Contracts
$400,000,000 aggregate
principal amount of 2.25%
Senior Notes due August 16,
2008
issued together in the form of
16,000,000 7.00%
Corporate Units
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Maximum Number of Option
Securities to be sold by the Company..................... 2,400,000 Common Stock
Purchase Contracts
$60,000,000 aggregate
principal amount of 2.25%
Senior Notes due 2008
issued together in the form of
2,400,000 7.00% Corporate
Units
Closing Date, Time and Location June 24, 2003,
10 a.m. (New York City time),
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York
Date referred to in Section 5(a)(vi) after which the Company may offer or sell
securities without the consent of the Representative(s): September 18, 2003
Modification of items to be covered by the letter from Ernst & Young delivered
pursuant to Section 6(f) at the Execution Time:
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SCHEDULE II
NUMBER OF UNDERWRITTEN
SECURITIES TO BE PURCHASED
----------------------------------------------------------------
PURCHASE CONTRACTS NOTES ($) CORPORATE UNITS
------------------ ------------ ---------------
Citigroup Global Markets Inc. ....... ............ 4,533,334 $113,333,350 4,533,334
Goldman, Sachs & Co. ................ ............ 4,533,333 $113,333,325 4,533,333
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ............ ............ 4,533,333 $113,333,325 4,533,333
ABN AMRO Rothschild LLC ............. ............ 800,000 $ 20,000,000 800,000
BNY Capital Markets, Inc. ........... ............ 800,000 $ 20,000,000 800,000
HSBC Securities (USA) Inc. .......... ............ 800,000 $ 20,000,000 800,000
------------------ ------------ ---------------
Total .......................... ............ 16,000,000 $400,000,000 16,000,000
================== ============ ===============
II-1
EXHIBIT A
[LETTERHEAD OF EXECUTIVE OFFICER OR DIRECTOR OF
THE CHUBB CORPORATION]
THE CHUBB CORPORATION
PUBLIC OFFERING OF
COMMON STOCK PURCHASE CONTRACTS
SENIOR NOTES DUE AUGUST 16, 2008
IN THE FORM OF CORPORATE UNITS
June 18, 2003
Citigroup Global Markets Inc.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
As Representatives of the several Underwriters,
care of:
Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "UNDERWRITING AGREEMENT"), between The Chubb
Corporation, a New Jersey corporation (the "COMPANY"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock Purchase Contracts and Senior Notes
of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of the Representatives offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or
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any affiliate of the undersigned), directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the Securities
and Exchange Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period of
90 days after the date of the Underwriting Agreement. The foregoing shall not
apply to (i) the exercise of options outstanding as of the Execution Time, (ii)
dispositions of common stock by gift to members of, or to trusts established for
the benefit of, members of the undersigned's immediate family provided that any
such recipient agrees in writing as a condition to receiving such common stock
to be bound by the restrictions set forth in this letter or (iii) dispositions
of common stock by the undersigned by bona fide gift to charitable
organizations.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
By: ____________________________________
[SIGNATURE OF EXECUTIVE
OFFICER OR DIRECTOR]
Name: [NAME AND ADDRESS OF EXECUTIVE
OFFICER OR DIRECTOR]
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EXHIBIT B
FORM OF OPINION OF JOANNE L. BOBER, GENERAL COUNSEL TO THE COMPANY
TO THE EFFECT THAT:
(i) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
foreign jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no material
liability or disability by reason of failure to be so qualified in any such
jurisdiction;
(ii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its Subsidiaries is a party or of which any
property of the Company or any of its Subsidiaries is the subject which would
individually or in the aggregate reasonably be expected to have a material
adverse effect on the consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened;
(iii) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, the
Purchase Contract Agreement, the Pledge Agreement, the Remarketing Agreement and
the Underwriting Agreement and the consummation of the transactions therein
contemplated 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 known
to me to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound to or which any of the property or
assets of the Company or any of its Subsidiaries is subject, nor will such
actions result in any violations of the provisions of the Restated Certificate
of Incorporation or By-laws of the Company or any statute or any order, rule or
regulation known to me of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of their
properties, such as would be material to the business of the Company and its
subsidiaries taken as a whole;
(iv) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company of the other transactions contemplated by the Underwriting Agreement,
the Indenture, the Purchase Contract Agreement, the Pledge Agreement or the
Remarketing Agreement.
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EXHIBIT C
FORM OF OPINION OF DEBEVOISE & PLIMPTON LLP
TO THE EFFECT THAT:
(i) The Indenture has been duly authorized, executed and delivered
by the Company under the laws of the State of New York and qualified under the
Trust Indenture Act of 1939, as amended, and is a valid, binding and enforceable
agreement of the Company subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally, to general principles of
equity (whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing;
(ii) The Notes have been duly authorized and, when executed by the
Company in accordance with the provisions of the Indenture and delivered to and
paid for by the Underwriters in accordance with the terms of the Underwriting
Agreement, will be valid, binding and enforceable obligations of the Company,
entitled to the benefits of the Indenture subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, to general
principles of equity (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing;
(iii) The Purchase Contract Agreement has been duly authorized,
executed and delivered by the Company under the laws of the State of New York
and is a valid, binding and enforceable agreement of the Company subject to the
qualification that the waiver of stay and extension laws in Section [6.06] of
the Purchase Contract Agreement may be unenforceable;
(iv) The Certificates (as defined in the Purchase Contract
Agreement) representing the Purchase Contracts have been duly authorized,
executed and delivered by the Company under the laws of the State of New York
and the Purchase Contracts represented by the Certificates (as defined in the
Purchase Contract Agreement) are valid, binding and enforceable obligations of
the Company entitled to the benefits of the Purchase Contract Agreement subject
to the qualification that the waiver of stay and extension laws in Section 6.06
of the Purchase Contract Agreement may be unenforceable;
(v) The Pledge Agreement has been duly authorized, executed and
delivered by the Company under the laws of the State of New York and is a valid,
binding and enforceable agreement of the Company;
(vii) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company under the laws of the State of New York;
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(viii) The statements set forth under the headings "Description of
the Equity Units", "Description of the Purchase Contracts", "Certain Provisions
of the Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement", "Description of the Senior Notes" and "United States Federal Income
Tax" in the Final Prospectus and the statements set forth under the headings
"Description of the Debt Securities" and "Description of Stock Purchase
Contracts and Stock Purchase Units" in the Basic Prospectus, insofar as such
statements purport to summarize legal matters and certain provisions of the
Securities, the Purchase Contract Agreement, the Pledge Agreement, the
Remarketing Agreement, the Underwriting Agreement and the Indenture are accurate
and fair summaries of such legal matters and provisions in all material
respects.
(ix) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(x) The documents incorporated by reference in the Registration
Statement and the Final Prospectus (except the financial statements and
schedules and other financial data included therein, as to which such counsel
need express no opinion), as of the Execution Time, appeared on their face to be
appropriately responsive in all material respects to the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, other than Regulation S-T;
(xi) The Registration Statement has become effective under the Act;
any required filing of the Basic Prospectus, any Preliminary Final Prospectus
and the Final Prospectus, and any supplements thereto, pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued, no proceedings for that purpose have
been instituted or threatened and the Registration Statement and the Final
Prospectus (other than the financial statements and other financial information
contained therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of the Act and
the Exchange Act and the respective rules thereunder; and such counsel has no
reason to believe that on the Effective Date, or the date the Registration
Statement was last deemed amended, or on the date of the Underwriting Agreement
the Registration Statement 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 Final Prospectus as of
its date on the Closing Date included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not
C-2
misleading (in each case, other than the financial statements and other
financial information contained therein, as to which such counsel need express
no opinion).
C-3
EXHIBIT D
FORM OF OPINION OF DRINKER BIDDLE & REATH LLP
TO THE EFFECT THAT:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of New Jersey will
full corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Basic
Prospectus and Final Prospectus;
(ii) The Company's authorized equity capitalization is as set forth
in the Final Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Final Prospectus;
the outstanding shares of Common Stock have been duly and validly authorized and
issued and are fully paid and nonassessable;
(iii) The holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities;
(iv) (1) The Shares of Common Stock issuable upon exercise of the
Purchase Contracts have been duly authorized and reserved and, when issued upon
exercise of the Purchase Contracts in accordance with the term of the Purchase
Contracts, will be validly issued, fully paid and non-assessable, and the
issuance of such shares will not be subject to any preemptive or similar rights
and (2) the Rights, if any, issuable upon exercise of the Purchase Contracts in
accordance with the terms of the Purchase Contract Agreement and the Rights
Agreement, will have been validly issued;
(v) The Underwriting Agreement, the Purchase Contract Agreement,
the Pledge Agreement and the Remarketing Agreement, the Purchase Contracts and
the Certificates (as defined in the Purchase Contract Agreement) have been duly
authorized by the Company;
(vi) The Indenture and the Notes have been duly authorized by the
Company; and
(vii) Neither the issue and the sale of the Securities, nor the
compliance of the Company with the terms of the Securities, nor the consummation
of any other of the transactions contemplated by the Underwriting Agreement, nor
the fulfillment of the terms thereof, will conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or its subsidiaries pursuant to the Certificate of
Incorporation or by-laws of the Company or Chubb Capital Corporation.
D-1