Exhibit 1.1
MUTUAL GROUP LTD.
Senior Notes
Unconditionally Guaranteed by
MUTUAL RISK MANAGEMENT LTD.
UNDERWRITING AGREEMENT
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, 2000
PRUDENTIAL SECURITIES INCORPORATED
BANC OF AMERICA SECURITIES LLC
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Ladies and Gentlemen:
Mutual Group Ltd., a Delaware corporation (the "Company"), and Mutual Risk
Management Ltd., a Bermuda company (the "Guarantor"), hereby confirm their
agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters") for whom you have been authorized to act as representatives (in
such capacities, the "Representatives") as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
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Company proposes to issue and sell to the several Underwriters $_________
aggregate principal amount of its __% Senior Notes due 20___ (the "Securities"),
to be issued pursuant to a senior indenture, dated as of __________, 2000 (the
"Indenture"), among the Company, as issuer, the Guarantor, as guarantor, and The
Chase Manhattan Bank, a New York banking corporation, as trustee (the
"Trustee"), as supplemented by a supplemental indenture, to be dated as of
__________, 2000 (the "Supplemental Indenture"). The Securities will be fully
and unconditionally guaranteed on a senior, unsecured basis by the Guarantor
pursuant to the guarantee included in the Indenture and the Securities (the
"Guarantee").
2. Registration Statement. The Company and the Guarantor have filed with
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the Securities and Exchange Commission (the "Commission") a joint registration
statement on Form S-3 (Registration No. 333-96425) and pre-effective Amendment
No. 1 thereto, including a prospectus, relating to certain of their debt
securities and guarantees of the debt securities of the Company by the Guarantor
and the offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Act"). As provided in Section 6(a)
hereof, a prospectus supplement reflecting the terms of the Securities and the
Guarantee, the terms of the offering thereof and the other matters set forth
therein has been prepared and will be filed pursuant to Rule 424 under the Act.
Such prospectus supplement, in the form first filed after the date hereof
pursuant to Rule 424, is herein referred to as the "Prospectus Supplement."
Such registration statement, as amended as of the date hereof, including the
information, if any, deemed to be a part thereof pursuant to Rule 430A under the
Act, the exhibits thereto and the documents incorporated by reference therein,
is herein called the "Registration Statement," and the basic prospectus included
therein relating to all offerings of securities under the Registration
Statement, as supplemented by the Prospectus Supplement, is herein called the
"Prospectus," except that, if such basic Prospectus is amended or supplemented
on or prior to the date on which the Prospectus Supplement is first filed
pursuant to Rule 424, the term "Prospectus" shall refer to the basic Prospectus
as so amended or supplemented and as supplemented by the Prospectus Supplement,
in either case including the documents filed by the Company and the Guarantor
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference therein. The term
"Preliminary Prospectus" shall refer to each basic prospectus or prospectus
supplement which is subject to completion.
3. Representations and Warranties of the Company and the Guarantor. The
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Company and the Guarantor, jointly and severally, represent and warrant to, and
agree with, each of the several Underwriters that:
(a) The Registration Statement has been declared effective by the
Commission and no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the Company or the
Guarantor, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with or withdrawn.
The Company and the Guarantor meet the requirements for use of Form S-3 under
the Act and on the original effective date of the Registration Statement, on the
effective date of the most recent post-effective amendment thereto, if any, and
on the date of the filing by the Company and the Guarantor of any annual report
on Form 10-K after the original filing of the Registration Statement, or, if
later, any amendment thereto, the Registration Statement complied in all
material respects with the requirements of the Act and the rules and regulations
of the Commission thereunder (the "Regulations"), the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations of
the Commission under the Trust Indenture Act (the "Trust Indenture Act
Regulations") and did not contain an untrue statement of a material fact or omit
to state a
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material fact required to be stated therein or necessary to make the statements
therein not misleading; on the date hereof and at the Closing Date (as defined
below), (A) the Registration Statement and any amendments and supplements
thereto, comply and will comply in all material respects with the requirements
of the Act, the Regulations, the Trust Indenture Act and the Trust Indenture Act
Regulations, (B) neither the Registration Statement nor any amendment or
supplement thereto includes or will include an untrue statement of a material
fact or omits or will omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and (C)
neither any Preliminary Prospectus nor the Prospectus nor any amendment or
supplement thereto includes or will include an untrue statement of a material
fact or omits or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company and the Guarantor make
no representation or warranty as to statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company or
the Guarantor by or on behalf of any Underwriter, directly or through you,
expressly for use in the Registration Statement or the Prospectus, or as to
statements in the Statement of Eligibility (Form T-1) under the Trust Indenture
Act of the Trustee filed as an exhibit to the Registration Statement. At the
Closing Date, the Indenture will comply in all material respects with the
requirements of the Trust Indenture Act and the Trust Indenture Act Regulations.
(b) The documents incorporated by reference in the Registration Statement
and the Prospectus, at the time they were filed or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder (the "Exchange Act Regulations"), and when read together with the
other information in the Prospectus, do not and will not, on the date hereof and
at the Closing Date, include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Guarantor and each of its Significant Subsidiaries (as defined in
Rule 1-02 of Regulation S-X promulgated under the Act) have been duly organized
and are validly existing as companies with limited liability or corporations, as
the case may be, in good standing under the laws of their respective
jurisdictions of incorporation. The Guarantor and its Significant Subsidiaries
(including the Company) are duly qualified to transact business as foreign
corporations and are in good standing (with respect to jurisdictions that
recognize such concept) under the laws of all other jurisdictions where the
ownership or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the failure to
be so qualified would not have a material adverse effect on the condition
(financial or otherwise), business, net worth or results of operations of the
Guarantor and its Significant Subsidiaries (including the Company), considered
as a whole (a "Material Adverse Effect"). The Guarantor and
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each of its Significant Subsidiaries (including the Company) has full power
(corporate and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company and the Guarantor have full power
(corporate and other) to enter into this Agreement, the Indenture and the
Supplemental Indenture and to carry out all the terms and provisions hereof and
thereof to be carried out by them.
(d) Each of the Guarantor and its insurance subsidiaries (including
insurance holding companies) is duly registered, licensed or admitted as an
insurer or an insurance holding company (if applicable) in each jurisdiction
where it is required to be so licensed or admitted to conduct its business as
presently conducted, except where the failure to be so registered, licensed or
admitted would not result in a Material Adverse Effect; and each of the
Guarantor and its insurance subsidiaries (including insurance holding companies)
have filed all reports, documents or other information required to be filed
under such statutes and regulations, except where the failure to file would not
result in a Material Adverse Effect.
(e) The Guarantor has an authorized, issued and outstanding capitalization
as set forth in the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus in the column entitled "Actual" under the
caption "Capitalization," except for subsequent issuances thereof, if any,
pursuant to employee benefit plans or upon the conversion of convertible
securities and except for repurchases of capital stock pursuant to repurchase
programs approved by the Guarantor's board of directors. All of the issued
shares of capital stock of the Guarantor have been duly authorized and validly
issued and are fully paid and nonassessable. The issued shares of capital stock
of each of the Guarantor's Significant Subsidiaries (including the Company) have
been duly authorized and validly issued, are fully paid and nonassessable and
are, directly or indirectly, owned of record and beneficially by the Guarantor,
free and clear of any security interests, liens, encumbrances, equities or
claims, except as described in or contemplated by the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus. No
holder of securities has the right to require the Company or the Guarantor, as
the case may be, to register such holder's securities under the Act in
connection with the Registration Statement and the public offering contemplated
by this Agreement.
(f) The Indenture has been duly authorized, executed and delivered by each
of the Company and the Guarantor and, assuming due authorization, execution and
delivery by the Trustee, constitutes the legal, valid and binding agreement of
each of the Company and the Guarantor, enforceable against each of them in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
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considered in a proceeding in equity or at law). The Supplemental Indenture has
been duly authorized by each of the Company and the Guarantor and, as of the
Closing Date, will have been duly executed and delivered by each of the Company
and the Guarantor and, assuming due authorization, execution and delivery by the
Trustee, will constitute, the legal, valid and binding agreement of each of the
Company and the Guarantor, enforceable against each of them in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law). The Indenture has been qualified under the
Trust Indenture Act and, as of the Closing Date, the Indenture, as supplemented
by the Supplemental Indenture, will be duly qualified under the Trust Indenture
Act.
(g) The issuance, execution and delivery of the Securities have been duly
authorized by the Company and, as of the Closing Date, the Securities will have
been duly executed and delivered by the Company and, assuming due authentication
by the Trustee, will be the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will be entitled to the benefits of the Indenture.
(h) The issuance and delivery of the Guarantee have been duly authorized by
the Guarantor and, as of the Closing Date, the Guarantee, when issued and
delivered in the manner provided for in the Indenture, will constitute the
legal, valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be in
the form contemplated by, and entitled to the benefits of, the Indenture.
(i) This Agreement has been duly authorized, executed and delivered by
each of the Company and the Guarantor.
(j) The statements set forth under the headings "Description of the Senior
Notes" and "Description of the Senior Notes and the MRM Senior Note Guarantees"
in the
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Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) are complete and accurate in all material respects.
(k) The consolidated financial statements and schedules of the Guarantor
and its consolidated subsidiaries (including the financial information regarding
the Company included in the notes thereto) included or incorporated by reference
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) fairly present in all
material respects the financial position of the Guarantor and its consolidated
subsidiaries (including the Company) and the results of operations and cash
flows as of the dates and periods therein specified. Such financial statements
and schedules have been prepared in accordance with United States generally
accepted accounting principles consistently applied throughout the periods
involved. The selected financial data and the summary financial data, if any, in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present in all material respects, on the basis
stated in the Prospectus (or such Preliminary Prospectus), the information
included therein and such financial data has been compiled on a basis consistent
with the audited consolidated financial statements included or incorporated by
reference in the Registration Statement.
(l) Ernst & Young, who have certified the consolidated financial statements
of the Guarantor and its consolidated subsidiaries and delivered its report with
respect to the audited consolidated financial statements and schedules included
or incorporated by reference in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), are independent public accountants as required by the Act, the
Regulations, the Exchange Act and the Exchange Act Regulations.
(m) No legal or governmental proceedings are pending to which the Guarantor
or any of its subsidiaries (including the Company) is a party or to which the
property of the Guarantor or any of its subsidiaries (including the Company) is
subject that are required to be described in the Registration Statement or the
Prospectus and are not described therein (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and, to the knowledge of the
Company or the Guarantor, no such proceedings have been threatened against the
Guarantor or any of its subsidiaries (including the Company) or with respect to
any of their respective properties; and no contract or other document is
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement that is not described
therein (or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) or filed as required.
(n) The execution and delivery of this Agreement, the Indenture and the
Supplemental Indenture, the issuance, offering and sale of the Securities and
the Guarantee to the Underwriters pursuant to this Agreement and the use of
proceeds as
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described in the Prospectus, the compliance by the Company and the Guarantor
with the provisions of this Agreement, the Securities, the Indenture and the
Supplemental Indenture and the consummation of the transactions herein and
therein contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority or any
court, domestic or foreign, except such as have been obtained and such as may be
required under state securities or blue sky laws, or (ii) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or give rise to any right to accelerate the
maturity or require the prepayment of any indebtedness or the purchase of any
capital stock under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Guarantor or any of its
subsidiaries (including the Company) under, any indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Guarantor or any of
its subsidiaries (including the Company) is a party or by which the Guarantor or
any of its subsidiaries (including the Company) or any of their respective
assets, properties or operations is subject (except for any conflict, breach,
violation, default, right, requirement, creation or imposition that, singly or
in the aggregate, would not have a Material Adverse Effect), or the charter
documents or by-laws of the Guarantor or any of its subsidiaries (including the
Company), or any statute or any judgment, decree, order, rule or regulation of
any court or other governmental authority or any arbitrator applicable to the
Guarantor or any of its subsidiaries (including the Company).
(o) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), (i) neither the Guarantor
nor any of its Significant Subsidiaries (including the Company) has sustained
any material loss or material interference with its respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or governmental
proceedings, (ii) there has not been any material adverse change in the
consolidated reserves for losses and loss adjustment expenses of the Guarantor
and its subsidiaries (including the Company) and (iii) there has not been any
material adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), business, net worth
or results of operations of the Guarantor and its subsidiaries (including the
Company), considered as whole, except in each case as described in or
contemplated by the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus.
(p) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), (i) the Guarantor has not
purchased any of its outstanding capital stock, except for repurchases of
capital stock pursuant to repurchase programs approved by the Guarantor's board
of directors; (ii) the Guarantor has not
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declared, paid or otherwise made any dividend or distribution of any kind on its
capital stock, except for regular quarterly dividends; and (iii) there has not
been any material change in the short-term debt or long-term debt of the
Guarantor or any of its subsidiaries (including the Company) other than in the
ordinary course of business consistent with past practice as described in the
Prospectus, except in each case described in clauses (i) through (iii) as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(q) The Guarantor and its subsidiaries (including the Company) possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess any such
certificates, authorizations and permits would not, singly or in the aggregate,
result in a Material Adverse Effect, and neither the Guarantor nor any
subsidiary (including the Company) 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, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(r) The Guarantor and each of its subsidiaries (including the Company)
conduct their respective operations in a manner that does not subject it or them
to registration as an investment company under the Investment Company Act of
1940, as amended, and the transactions contemplated hereby will not cause the
Guarantor or any of its subsidiaries (including the Company) to become an
investment company subject to registration thereunder.
(s) Each of the Guarantor and its subsidiaries (including the Company) have
filed all foreign, federal, state and local tax returns that are required to be
filed or have requested extensions thereof (except in any case in which the
failure so to file would not have a Material Adverse Effect) and have paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(t) The Guarantor and each of its subsidiaries (including the Company)
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
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management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(u) Neither the Guarantor nor any of its subsidiaries (including the
Company) is in violation of its charter, by-laws or other organizational
documents. No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default, in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Guarantor or any
of its subsidiaries (including the Company) is a party or by which the Guarantor
or any of its subsidiaries (including the Company) or any of their respective
properties is bound or may be affected in any respect that could have a Material
Adverse Effect.
(v) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, or if the Prospectus is not in
existence, the most recent Preliminary Prospectus, there has not been any
downgrading in (i) the rating for financial strength or claims paying ability of
the Guarantor or any of its subsidiaries (including the Company) or (ii) the
rating of any of the Guarantor's securities or the securities of any of its
subsidiaries (including the Company), nor has there been any action threatening
such a downgrading or placing the Guarantor or any of its subsidiaries
(including the Company) under special surveillance by any "nationally recognized
statistical rating organization" (as defined in Rule 436(g) under the Act)
(each, a "Rating Organization"); nor does the Company or the Guarantor have any
knowledge of any facts or circumstances that are likely to cause such
downgrading, threatened downgrading or the placing the Guarantor or any of its
subsidiaries (including the Company) under such surveillance.
(w) Under current laws and regulations of Bermuda and any political
subdivision thereof, all interest payable on the Securities may be paid by the
Guarantor pursuant to the Guarantee to the record and beneficial owners thereof
in United States dollars and freely transferred out of Bermuda and all such
payments made to holders thereof or therein who are non-residents of Bermuda
will not be subject to income, withholding or other taxes under laws and
regulations of Bermuda or any political subdivision or taxing authority thereof
or therein and will otherwise be free and clear of any other tax, duty,
withholding or deduction in Bermuda or any political subdivision or taxing
authority thereof or therein and without the necessity of obtaining any
governmental authorization in Bermuda or any political subdivision or taxing
authority thereof or therein.
(x) The description of the Guarantor's and its subsidiaries' reserves and
reserving methodology and assumptions described in the Prospectus is accurate in
all material respects and fairly presents the information set forth therein in
all material respects and,
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since the date of the latest financial statements included in the Prospectus, no
loss experience has developed which would require or make it appropriate for the
Guarantor or any of its subsidiaries to alter or modify such methodology.
(y) No authorization, approval or consent of any governmental authority or
agency is required (other than any license as an insurer or insurance holding
company and other than those which have already been obtained) under the laws of
any jurisdiction in which the Guarantor or any of its subsidiaries (including
the Company) conduct their respective businesses in connection with the
ownership, directly or indirectly, by the Guarantor of equity interests in any
subsidiary (including the Company) or the repatriation of any amount from or to
the Guarantor or any of its subsidiaries (including the Company), except to the
extent that the failure to obtain such authorization, approval or consent would
not result in a Material Adverse Effect.
(z) Neither the Company nor the Guarantor has, directly or indirectly,
taken any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Guarantor or the Company to
facilitate the sale or resale of the Securities.
Each certificate signed by any officer of the Company or the Guarantor and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty as of the date of such certificate by the
Company or the Guarantor, as the case may be, to each Underwriter as to the
matters covered thereby.
4. Purchase, Sale and Delivery of the Securities.
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(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto at an aggregate purchase price of $__________,
plus accrued interest, if any, from __________ to the date of delivery of the
Securities. One or more certificates in definitive form for the Securities that
the several Underwriters have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Underwriters request upon notice to the Company at least 48 hours prior to the
Closing Date, shall be delivered by or on behalf of the Company to the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer of immediately available funds to a
bank account designated by the Company. Such delivery of and payment for the
Securities shall be made at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, New York 10022 at 9:30 a.m., New York time, on May __, 2000,
or at such other place, time or date as the Underwriters and the
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Company may agree upon or as the Underwriters may determine pursuant to Section
10 hereof, such time and date of delivery against payment being herein referred
to as the "Closing Date." The Company will make such certificate or certificates
for the Securities available for checking and packaging by the Underwriters at
the offices in New York, New York of the Trustee or of Prudential Securities
Incorporated at least 24 hours prior to the Closing Date.
(b) It is understood that you, individually and not as one of the
Underwriters, may (but shall not be obligated to) make payment on behalf of any
Underwriter or Underwriters for any of the Securities to be purchased by such
Underwriter or Underwriters. No such payment shall relieve such Underwriter or
Underwriters from any of its or their obligations hereunder.
5. Offering by the Underwriters. Upon your authorization of the release
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of the Securities, the several Underwriters shall offer the Securities for sale
to the public upon the terms set forth in the Prospectus.
6. Covenants of the Company and the Guarantor. The Company and the
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Guarantor, jointly and severally, covenant and agree with each of the
Underwriters that:
(a) Immediately following the execution of this Agreement, the Company and
the Guarantor will prepare a Prospectus Supplement that complies with the Act
and the Regulations and that sets forth the principal amount of the Securities
and their material terms, the name of each Underwriter participating in the
offering and the principal amount of the Securities that each severally has
agreed to purchase, the price at which the Securities are to be purchased by the
Underwriters from the Company, any initial public offering price, any selling
concession and reallowance and any delayed delivery arrangements, and such other
information as you, the Company and the Guarantor deem appropriate in connection
with the offering of the Securities. The Company and the Guarantor will promptly
transmit copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424 under the Act.
(b) During the period when the Prospectus is required by the Act to be
delivered in connection with the sale of the Securities, the Company and the
Guarantor will, subject to Section 6(c) hereof, file promptly all documents
required to be filed with the Commission pursuant to Section 13 or 14 of the
Exchange Act.
(c) During the period when the Prospectus is required by the Act to be
delivered in connection with the sale of the Securities, the Company and the
Guarantor will inform you of their intention to file any amendment to the
Registration Statement, any supplement to the Prospectus or any document that
would as a result thereof be incorporated by reference in the Prospectus; will
furnish you with copies of any such
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amendment, supplement or other document a reasonable time in advance of filing
and will not file any such amendment, supplement or other document in a form to
which you shall reasonably object.
(d) The Company and the Guarantor will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
directed at any document incorporated by reference in the Registration Statement
or the Prospectus or any amendment or supplement thereto or any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, (ii) the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, (iii) the institution,
threatening or contemplation of any proceeding for any such purpose or (iv) any
request made by the Commission for amending the Registration Statement, for
amending or supplementing any Preliminary Prospectus or the Prospectus or for
additional information. The Company and the Guarantor will use all commercially
reasonable efforts to prevent the issuance of any such stop order and, if any
such stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
(e) The Company and the Guarantor will use all commercially reasonable
efforts to arrange for the qualification of the Securities for offering and sale
under the securities or blue sky laws of such jurisdictions as the Underwriters
may designate and to continue such qualifications in effect for as long as may
be necessary to complete the distribution of the Securities, provided, however,
that in connection therewith the Company and the Guarantor shall not be required
to qualify as a foreign corporation or a dealer in securities, to execute a
general consent to service of process or to subject itself to taxation in any
jurisdiction.
(f) If, at any time prior to the later of (i) the final date when a
Prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Closing Date, any event occurs as a result of which the Prospectus,
as then amended or supplemented, would include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act, the Exchange Act or
the Trust Indenture Act or the respective rules or regulations of the Commission
thereunder, the Company and the Guarantor will promptly notify the Underwriters
thereof and, subject to Section 6(c) hereof, will prepare and file with the
Commission, at the Company's and the Guarantor's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
12
(g) The Company and the Guarantor will, without charge, provide (i) to the
Underwriters and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto), (ii) to each other
Underwriter a conformed copy of such registration statement and each amendment
thereto (in each case without exhibits thereto) and (iii) so long as a
Prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Underwriters may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company and the
Guarantor, not later than 6:00 PM, New York City time, on the business day
following the date of determination of the public offering price, will deliver
to the Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Underwriters may reasonably request for
purposes of confirming orders that are expected to settle on the Closing Date.
The copies of any Preliminary Prospectus and Prospectus furnished to the
Underwriters will be identical to the electronically transmitted copies filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(h) The Guarantor, as soon as practicable, will make generally available to
its security holders and to the Underwriters a consolidated earnings statement
of the Guarantor and its subsidiaries that satisfies the provisions of Section
11(a) of the Act and Rule 158 thereunder.
(i) The Company will apply the net proceeds from the sale of the Securities
as set forth in the Prospectus under the heading "Use of Proceeds".
(j) The Company and the Guarantor will not, directly or indirectly, without
the prior written consent of Prudential Securities Incorporated, on behalf of
the Underwriters, offer, sell, offer to sell, contract to sell, grant any option
to purchase or otherwise transfer or dispose (or announce any offer, transfer,
offer of sale, contract of sale, grant of any option to purchase or other sale
or disposition) of any debt securities of the Company or the Guarantor that are
substantially similar to the Securities during the period commencing on the date
hereof and terminating on the earlier of (a) the Closing Date and (b) the date
of notice to the Company and the Guarantor by the Underwriters of the
termination of trading restrictions with respect to the Securities, except
pursuant to this Agreement.
(k) The Company and the Guarantor will not, directly or indirectly, (i)
take any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company or the Guarantor to
facilitate the sale or resale of the Securities or (ii) except pursuant to this
Agreement (A) sell, bid for, purchase, or pay anyone any
13
compensation for soliciting purchases of, the Securities or (B) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company or the Guarantor.
(l) The Company and the Guarantor will, jointly and severally, indemnify
and hold harmless the Underwriters against any documentary, stamp or similar
issue tax, including any interest and penalties, on the creation, issue and sale
of the Securities and on the execution and delivery of this Agreement. All
payments to be made by the Company or the Guarantor hereunder shall be made
without withholding or deduction for or on account of any present or future
taxes, duties or governmental charges whatsoever unless the Company or the
Guarantor is compelled by law to deduct or withhold such taxes, duties or
charges. In that event, the Company or the Guarantor shall pay such additional
amounts as may be necessary in order that the net amounts received after such
withholding or deduction shall equal the amounts that would have been received
if no withholding or deduction had been made.
7. Expenses. The Company and the Guarantor will, jointly and severally,
--------
pay all costs and expenses incident to the performance of their obligations
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 12 hereof,
including all costs and expenses incident to (a) the printing or other
production of documents with respect to the transactions, including any costs of
printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Preliminary Prospectus and the
Prospectus and any amendment or supplement thereto, the Indenture, the
Supplemental Indenture, this Agreement and any blue sky memoranda, (b) all
arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (c) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company and the
Guarantor, (d) preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Securities, including transfer agent's and
registrar's fees, (e) the qualification of the Securities under state securities
and blue sky laws, including filing fees and reasonable fees and disbursements
of counsel for the Underwriters relating thereto, (f) the fees and disbursements
of the Trustee, (g) the filing fees of the Commission relating to the
Securities, (h) any meetings with prospective investors in the Securities (other
than as shall have been specifically approved by the Underwriters to be paid for
by the Underwriters), (i) any fees charged by investment rating agencies for the
rating of Securities and (j) the fees associated with any listing of the
Securities on any securities exchange. 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 8 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 12(a)(i) hereof or because of any
failure, refusal or inability on the part of the Company or the Guarantor to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied
14
hereunder other than by reason of a default by any of the Underwriters, the
Company and the Guarantor, jointly and severally, will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
fees and disbursements of counsel) that shall have been reasonably incurred by
them in connection with the proposed purchase and sale of the Securities. The
Company and the Guarantor shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
8. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
several Underwriters to purchase and pay for the Securities shall be subject, in
the Underwriters' sole discretion, to the accuracy of the representations and
warranties of the Company and the Guarantor contained herein as of the date
hereof and as of the Closing Date, as if made as of the Closing Date, to the
accuracy of the statements of the Company's and Guarantor's officers made
pursuant to the provisions hereof, to the performance by the Company and the
Guarantor of their covenants and agreements hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at any
document incorporated by reference in the Registration Statement shall have been
issued, and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company, the Guarantor or the Underwriters, shall be
threatened or contemplated by the Commission; and the Company and the Guarantor
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
(b) The Underwriters shall have received an opinion, dated the Closing
Date, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the Representatives, of Mayer, Brown & Platt, United States counsel for the
Company, to the effect set forth in Exhibit A hereto and to such further effect
as counsel to the Underwriters may reasonably request.
(c) The Underwriters shall have received an opinion, dated the Closing
Date, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the Representatives, of Richard O'Brien, General Counsel of the Guarantor and
the Company, to the effect set forth in Exhibit B hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(d) The Underwriters shall have received an opinion, dated the Closing
Date, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the Representatives, of Conyers Dill &
15
Pearman, Bermuda counsel for the Guarantor, to the effect set forth in Exhibit C
hereto and to such further effect as counsel to the Underwriters may reasonably
request.
(e) The Underwriters shall have received an opinion, dated the Closing
Date, of Debevoise & Plimpton, counsel for the Underwriters, with respect to the
issuance and sale of the Securities and the Guarantee, the Registration
Statement and the Prospectus, and such other related matters as the Underwriters
may reasonably require, and the Company and the Guarantor shall have furnished
to such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Underwriters shall have received from Ernst & Young a letter or
letters dated, respectively, the date hereof and the Closing Date, in form and
substance satisfactory to the Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and financial information
contained in the Registration Statement and the Prospectus.
(g) The Underwriters shall have received a certificate, dated the Closing
Date, of the principal executive officer and the principal financial or
accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made as of the Closing Date, the
Registration Statement, as amended as of the Closing Date, does not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented as of the Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Company has performed all covenants and agreements and satisfied all
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 or any amendment thereto has been issued, and no proceedings for
that purpose have been instituted or, to the best of the Company's
knowledge, are threatened or contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) neither the
Company nor any of its subsidiaries have sustained any material loss or
material interference with their respective businesses or properties from
fire, flood, hurricane, accident or other
16
calamity, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding, (ii) there has not been any material
adverse change in the reserves for losses and loss adjustment expenses of
the Company and its subsidiaries and (iii) there has not been any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise), business, net worth or
results of operations of the Company and its subsidiaries, considered as a
whole, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto).
(h) The Underwriters shall have received a certificate, dated the Closing
Date, of the principal executive officer and the principal financial or
accounting officer of the Guarantor to the effect that:
(i) the representations and warranties of the Guarantor in this
Agreement are true and correct as if made as of the Closing Date, the
Registration Statement, as amended as of the Closing Date, does not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented as of the Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
the Guarantor has performed all covenants and agreements and satisfied all
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 or any amendment thereto has been issued, and no proceedings for
that purpose have been instituted or, to the best of the Guarantor's
knowledge, are threatened or contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) neither the
Guarantor nor any of its subsidiaries have sustained any material loss or
material interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding, (ii) there has not been any material adverse change in the
reserves for losses and loss adjustment expenses of the Guarantor and its
subsidiaries (including the Company) and (iii) there has not been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
business, net worth or results of operations of the Guarantor and its
subsidiaries,
17
considered as a whole, except in each case as described in or contemplated
by the Prospectus (exclusive of any amendment or supplement thereto).
(i) On the Closing Date, the Securities shall have ratings of no lower than
BBB+ and Baa2 accorded by Standard & Poor's Ratings Service (or any successor to
the rating agency business thereof) or Moody's Investors Service, Inc. (or any
successor to the rating agency business thereof), and the Company and the
Guarantor shall have delivered to the Representatives a letter, dated as of such
date, from each such rating organization, or other evidence satisfactory to the
Representatives, confirming that the Securities have such ratings. Since the
date of execution of this Agreement, there shall not have occurred any
downgrading in, or withdrawal of, the rating assigned to any of the Guarantor's
or any of its subsidiaries' securities or the Guarantor's or any of its
subsidiaries' financial strength or claims paying ability by any Rating
Organization, and no Rating Organization shall have publicly announced it has
under surveillance or review with negative implications its rating of any of the
Guarantor's or any of its subsidiaries' securities or the Guarantor's or any of
its subsidiaries' financial strength or claims paying ability.
(j) On the Closing Date, the Securities have been approved for listing,
subject only to official notice of issuance of the securities exchanges, if any,
specified in the applicable Prospectus Supplement.
(k) On or before the Closing Date, the Underwriters and counsel for the
Underwriters shall have received such further certificates, documents or other
information as they may have reasonably requested from the Company and the
Guarantor.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Underwriters and counsel
for the Underwriters. The Company and the Guarantor shall furnish to the
Underwriters such originals and conformed copies of such opinions, certificates,
letters and documents in such quantities as the Underwriters and counsel for the
Underwriters shall reasonably request.
9. Indemnification and Contribution.
--------------------------------
(a) The Company and the Guarantor, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
18
(i) any untrue statement or alleged untrue statement made by the
Company or the Guarantor in Section 3 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or the Guarantor or based upon
written information furnished by or on behalf of the Company or the
Guarantor filed in any jurisdiction in order to qualify the Securities
under the securities or blue sky laws thereof or filed with the Commission
or any securities association or securities exchange (each an
"Application") or
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and the
Guarantor will not be liable in any such case to the extent that any such loss,
claim, damage or liability (i) arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto or any Application in
reliance upon and in conformity with written information furnished to the
Company or the Guarantor by such Underwriter through the Representatives
specifically for use therein and (ii) with respect to any Preliminary Prospectus
to the extent that the Company and the Guarantor shall sustain the burden of
proving that any such loss, claim, damage or liability of such Underwriter
resulted solely from the fact that such Underwriter, in contravention of a
requirement of this Agreement or applicable law, sold Securities to a person to
whom such Underwriter failed to send or give, at or prior to the written
confirmation of sale, a copy of the Prospectus as, if applicable, amended or
supplemented if the Company has previously furnished copies thereof
(sufficiently in advance of the Closing Date to allow for distribution by the
Closing Date) to such Underwriter and the loss, liability, claim, damage or
expense of such Underwriter resulted from an untrue statement or omission of a
material fact contained in or omitted from the Preliminary Prospectus that was
corrected in the Prospectus as, if applicable, amended or supplemented prior to
the Closing Date and such Prospectus was required by law to be delivered at or
prior to the written
19
confirmation of sale to such person. This indemnity agreement will be in
addition to any liability which the Company or the Guarantor may otherwise have.
The Company and the Guarantor will not, without the prior written consent of the
indemnified parties under this Section 9(a), settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the indemnified parties are parties to such claim, action, suit or
proceeding), 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.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, the Guarantor, each of their directors, each of their
officers who signed the Registration Statement, and each person, if any, who
controls the Company or the Guarantor within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or the Guarantor, any such director, officer or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or Prospectus or
any amendment or supplement thereto, or any Application or (ii) the omission or
alleged omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application 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 reliance upon and in
conformity with written information furnished to the Company or the Guarantor by
such Underwriter through the Representatives specifically for use therein; and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company or the Guarantor or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 9 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 9, notify the indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 9. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the
20
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof and approval by such indemnified party of
counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Underwriters in the case of paragraph (a) of this Section 9,
representing the indemnified parties under such paragraph (a) who are parties to
such action or actions), (ii) the indemnifying party does not promptly retain
counsel reasonably satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 9 is unavailable or insufficient, for any
reason, to hold harmless an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof), each indemnifying party,
in order to provide for just and equitable contribution, 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 (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified
21
party on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantor on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (before
deducting expenses) received by the Company and the Guarantor bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Guarantor or the Underwriters, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company, the Guarantor and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to above in this paragraph (d). Notwithstanding any other provision of
this paragraph (d), no Underwriter shall be obligated to make contributions
hereunder that in the aggregate exceed the total public offering price of the
Securities purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim, and
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 Underwriters' obligations to
contribute hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated Master
Agreement Among Underwriters. For purposes of this paragraph (d), each person,
if any, who controls an Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company or the Guarantor, each
officer of the Company or the Guarantor who signed the Registration Statement
and each person, if any, who controls the Company or the Guarantor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have
the same rights to contribution as the Company and the Guarantor.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of this Section 9, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 9
fairly allocate the risks in light of the ability of the parties to investigate
the Company, the Guarantor and their respective businesses in order
22
to assure that adequate disclosure is made in the Registration Statement and
Prospectus as required by the Act. The parties are advised that federal or state
policy, as interpreted by the courts in certain jurisdictions, may be contrary
to certain provisions of this Section 9, and the parties hereto hereby expressly
waive and relinquish any right or ability to assert such public policy as a
defense to a claim under this Section 9 and further agree not to attempt to
assert any such defense.
10. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Securities hereunder and the aggregate principal amount
of such Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase is ten percent or less of the aggregate principal amount of
Securities to be purchased by all of the Underwriters at such time hereunder,
the other Underwriters may make arrangements satisfactory to the Underwriters
for the purchase of such Securities by other persons (who may include one or
more of the non-defaulting Underwriters), but if no such arrangements are made
by the Closing Date, the other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to purchase the Securities
that such defaulting Underwriter or Underwriters agreed but failed to purchase.
If one or more Underwriters so defaults with respect to an aggregate principal
amount of Securities that is more than ten percent of the aggregate principal
amount of Securities to be purchased by all of the Underwriters at such time
hereunder, and if arrangements satisfactory to the Underwriters are not made
within 36 hours after such default for the purchase by other persons (who may
include one or more of the non-defaulting Underwriters) of the Securities with
respect to which such default occurs, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Guarantor other than as provided in Section 11 hereof. In the event of any
default by one or more Underwriters as described in this Section 10, the
Underwriters shall have the right to postpone the Closing Date established as
provided in Section 4 hereof for not more than seven business days in order that
any necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Securities. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
11. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, the Guarantor, their
officers, and the several Underwriters 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 (i) any investigation made by or on behalf of
the Company, the Guarantor, any of their officers or directors, any Underwriter
or any controlling person referred to in Section 9 hereof and (ii) delivery of
and payment for the Securities. The respective representations, agreements,
indemnities and other statements set forth in Sections 3, 7
23
and 9 and this Section 11 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
12. Termination.
-----------
(a) This agreement may be terminated with respect to the Securities in the
sole discretion of the Representatives by notice to the Company and the
Guarantor given prior to the Closing Date, in the event that the Company or the
Guarantor shall have failed, refused or been unable to perform all obligations
and satisfy all conditions on its part to be performed or satisfied hereunder at
or prior thereto or, if at or prior to the Closing Date,
(i) The Guarantor or any of its subsidiaries (including the Company)
shall have, in the sole judgment of the Underwriters, sustained any
material loss or material interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, or there shall have been any material adverse
change in the consolidated reserves for losses and loss adjustment expenses
of the Guarantor and its subsidiaries (including the Company) or there
shall have been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a change
in management or control of the Company or the Guarantor), in the condition
(financial or otherwise), business, net worth or results of operations of
the Guarantor and its subsidiaries (including the Company), considered as a
whole, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto) which makes
it impracticable or inadvisable to proceed with the completion of the
offering of the Securities;
(ii) trading in the Guarantor's common shares shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange or Nasdaq National
Market shall have been suspended or minimum or maximum prices shall have
been established on either such exchange or market system;
(iii) a banking moratorium shall have been declared by United States
Federal, New York or Bermuda authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political
24
or financial conditions having an effect on the financial markets or the
market for the Securities that, in the sole judgment of the Underwriters,
makes it impractical or inadvisable to proceed with the public offering or
the delivery of the Securities as contemplated by the Registration
Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 12 shall be
without liability of any party to any other party except as provided in Section
7 hereof.
13. Information Supplied by Underwriters. The statements under the
------------------------------------
heading "Underwriting" in, and the last sentence on the cover page of, the
Preliminary Prospectus or the Prospectus (to the extent such statements relate
to any of the Underwriters) constitute the only information furnished by any
Underwriter to the Company or the Guarantor for the purposes of Sections 3(a)
and 9 hereof.
14. Notices. All communications hereunder shall be in writing and, if
-------
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, One New York Plaza, New York, New York 10292, Attention: Debt
Origination Group; and if sent to the Company or the Guarantor, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to the Company and the Guarantor at One Logan Square, Suite 1500,
Philadelphia, Pennsylvania 19103, Attention: Richard O'Brien (facsimile number
215-263-1610).
15. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company, the Guarantor and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Guarantor contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Underwriters contained in Section 9
of this Agreement shall also be for the benefit of the directors of the Company
and the Guarantor, the officers of the Company and the Guarantor who have signed
the Registration Statement and any person or persons who control the Company or
the Guarantor within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Securities from any Underwriter shall be deemed a
successor because of such purchase.
25
16. Consent to Jurisdiction; Miscellaneous. Each of the parties hereto
--------------------------------------
expressly and irrevocably submits to the non-exclusive jurisdiction of any
competent court in the place of its domicile and any United States Federal or
New York State court sitting in the Borough of Manhattan in The City of New York
in any action, suit or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby to the extent that such court has
subject matter jurisdiction over the controversy, and expressly and irrevocably
waives, to the extent permitted under applicable law, any immunity from the
jurisdiction thereof and any claim or defense in such action, suit or proceeding
based on a claim of improper venue, forum non conveniens or any similar basis to
which it might otherwise be entitled in any such action, suit or proceeding.
Each of the Company and the Guarantor irrevocably appoints CT Corporation as its
authorized agent in the Borough of Manhattan in The City of New York upon which
process may be served in any such action, suit or proceeding, and agrees that
service of process upon such agent, and written notice of said service of
process to the Company or the Guarantor by the person serving the same to the
address provided in Section 14, shall be deemed in every respect effective
service of process upon the Company or the Guarantor, as the case may be, in
such action, suit or proceeding. Each of the Company and the Guarantor further
agrees to take any and all action as may be necessary to maintain such
designation and appointment of such agent in full force and effect for a period
of two years from the date of this Agreement
17. Waiver of Immunities. To the extent that the Company or the Guarantor
--------------------
or any of their respective properties, assets or revenues may have or may
hereafter become entitled to, or have attributed to them, any right of immunity,
on the grounds of sovereignty, from any legal action, suit or proceeding, from
set-off or counterclaim, from the jurisdiction of any court, from service of
process, from attachment upon or prior to judgment, or from attachment in aid of
execution of judgment, or from execution of judgment, other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment,
in any jurisdiction in which proceedings may at any time be commended, with
respect to their obligations, liabilities or any other matter under or arising
out of or in connection with this Agreement or any additional agreement, each of
the Company and the Guarantor hereby irrevocably and unconditionally, to the
extent permitted by applicable law, waives and agrees not to plead or claim any
such immunity and consents to such relief and enforcement.
26
18. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
--------------
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ITS PRINCIPLE OR RULES OF CONFLICTS OF LAWS TO THE EXTENT SUCH
PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION.
19. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
27
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, the Guarantor and
each of the several Underwriters.
Very truly yours,
MUTUAL GROUP LTD.
By: ______________________________
Name:
Title:
MUTUAL RISK MANAGEMENT LTD.
By: ______________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
BANC OF AMERICA SECURITIES LLC
By: PRUDENTIAL SECURITIES INCORPORATED
By: _________________________
Name:
Title:
For itself and on behalf of the
Underwriters
SCHEDULE 1
UNDERWRITERS
Underwriter Principal Amount
- ----------- ----------------
Prudential Securities Incorporated $
Banc of America Securities LLC $
Total $
Exhibit A
FORM OF OPINION OF MAYER, BROWN & PLATT,
UNITED STATES COUNSEL FOR THE COMPANY AND THE
GUARANTOR, TO BE DELIVERED PURSUANT TO SECTION 8(b)
(i) The Company has been duly incorporated and each of the Company and
its Significant Subsidiaries is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation.
(ii) Each of the Company and its Significant Subsidiaries has full
corporate power to own or lease its respective properties and conduct its
respective businesses as described in the Registration Statement and the
Prospectus. The Company has full corporate power to enter into the
Underwriting Agreement, the Indenture and the Supplemental Indenture and to
carry out all terms and provisions thereof to be carried out by it.
(iii) The execution and delivery by each of the Company and the
Guarantor of, and the performance by each of the Company and the Guarantor
of its obligations under, the Underwriting Agreement, the Indenture and the
Supplemental Indenture and the consummation by each of the Company and the
Guarantor of the transactions contemplated by the Underwriting Agreement,
the Indenture and the Supplemental Indenture do not and will not (A)
contravene any provision of any United States federal or New York or
Delaware (for this purpose, the Delaware General Corporation Law) law, rule
or regulation, in each case which, in such counsel's opinion, based on such
counsel's experience, are normally applicable to transactions of the type
contemplated by the Underwriting Agreement ("United States Applicable
Laws"), except that such counsel need not express any opinion in this
paragraph with respect to state securities or insurance laws; (B)
contravene any judgment, order or decree known to such counsel without
independent inquiry of any United States federal, New York or Delaware
court or governmental agency or body having jurisdiction over the Guarantor
or any of its subsidiaries or by which the Guarantor or any of its
subsidiaries is bound or by which their properties or assets may be
affected; (C) conflict with or result in any breach or violation of the
certificate of incorporation or by-laws of the Company or its Significant
Subsidiaries, except for such conflicts, breaches, violations, defaults,
accelerations, repayments, repurchases, liens, charges or encumbrances that
would not singly and in the aggregate result in a Material Adverse Effect;
or (D) based upon such counsel's review of the United States Applicable
Laws, require any consent, approval or authorization or order of, or
qualification with, any United States federal or state governmental agency
or authority or court, except such as have been obtained under the Act, the
Regulations, the Trust Indenture Act and the Trust Indenture Act
Regulations and such as may be required under state securities or blue sky
laws or state insurance
A-1
laws in connection with the offer and sale of the Securities (as to which
such counsel need express no opinion).
(iv) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Securities have been duly authorized, executed and delivered
by the Company for issuance and sale pursuant to the Underwriting
Agreement.
(vi) The Securities, when issued and authenticated in the manner
provided for in the Indenture and the Supplemental Indenture and delivered
against payment of the consideration therefor specified in the Underwriting
Agreement, will constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law). The Securities are in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the Indenture and
the Supplemental Indenture.
(vii) Assuming the Guarantee has been duly authorized by the Guarantor
for issuance and sale pursuant to the Underwriting Agreement, the
Guarantee, when duly issued and delivered in the manner contemplated in the
Indenture and the Supplemental Indenture and issued and delivered to the
Underwriters in accordance with the provisions of the Underwriting
Agreement, will constitute a legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
(viii) The Indenture and the Supplemental Indenture have been duly
authorized, executed and delivered by the Company and, assuming the
Indenture and the Supplemental Indenture have been duly authorized,
executed and delivered by the Guarantor and by the applicable Trustee, the
Indenture and the Supplemental Indenture constitute legal, valid and
binding agreements of each of the Company and the Guarantor, enforceable
against each of the Company and the Guarantor in accordance with their
terms, except as the enforcement thereof may
A-2
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(ix) The Securities, the Guarantee, the Indenture and the Supplemental
Indenture conform in all material respects to the descriptions thereof
contained in the Prospectus and are in substantially the form filed or
incorporated by reference, as the case may be, as an exhibit to the
Registration Statement.
(x) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules and other financial data included therein or omitted
therefrom and each Trustee's Statement of Eligibility on Form T-1 (the
"Form T-1s"), as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the Act and the
Regulations.
(xi) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules and other financial
data included therein or omitted therefrom, as to which such counsel need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act, the Regulations, the Exchange
Act and the Exchange Act Regulations, as applicable.
(xii) The Indenture and the Supplemental Indenture have been duly
qualified under the Trust Indenture Act.
(xiii) The Company is not, and upon the issuance and sale of the
Securities and the application of the net proceeds therefrom as described
in the Prospectus will not be, an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
Such counsel shall also state that it has been advised by the Commission
that the Registration Statement became effective under the Act; that any
required filings of the Prospectus pursuant to Rule 424(b) have been made in the
manner and within the time period required by Rule 424(b); and that, based
solely on conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement
A-3
has been issued and no proceedings for the purpose have been instituted, are
pending or, to such counsel's knowledge, are contemplated under the Act.
Such counsel shall also state that they have examined various documents and
participated in conferences with representatives of the Company and the
Guarantor and their accountants and with representatives of the Representatives
and their counsel at which times the contents of the Registration Statement and
the Prospectus and related matters were discussed, and that, although they are
not passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus or making any representation that they have independently verified or
checked the accuracy, completeness or fairness of such statements, except as set
forth in paragraphs (ix), (x) and (xi) above, no facts have come to such
counsel's attention that cause such counsel to believe that the Registration
Statement or any post-effective amendment thereto, at the time the Registration
Statement or any post-effective amendment thereto became effective, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus or any amendment or supplement thereto, at
the date of the Prospectus, at the date of any such amendment or supplement or
on the Closing Date, included or includes any untrue statement of a material
fact or omitted or omits 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 (such counsel need not express a
belief with respect to the financial statements and supporting schedules and
other financial data included in or omitted from the Registration Statement or
any post-effective amendment thereto or the Prospectus or any amendment or
supplement thereto).
A-4
Exhibit B
FORM OF OPINION OF RICHARD O'BRIEN, ESQ.,
GENERAL COUNSEL OF THE GUARANTOR,
TO BE DELIVERED PURSUANT TO SECTION 8(c)
(i) Each of the Guarantor, the Company and their Significant
Subsidiaries is qualified to transact business and is in good standing
(with respect to jurisdictions which recognize such concept) as a foreign
corporation, in each jurisdiction in which it owns or leases real property
or in which the conduct of its business requires such qualification, except
to the extent that the failure to be so qualified or to be in good standing
(with respect to jurisdictions which recognize such concept) would not,
singly and in the aggregate, result in a Material Adverse Effect.
(ii) The issued shares of capital stock of each of the Company and its
Significant Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and, to the best knowledge of such counsel,
are owned of record directly by the Guarantor or the Company, as the case
may be, free and clear of any security interests, liens, encumbrances,
equities or claims, except as described in or contemplated by the
Prospectus;
(iii) Such counsel does not know of any (A) action, suit or proceeding
before or by any government, governmental instrumentality or court now
pending or threatened against or affecting the Guarantor or any of its
subsidiaries (including the Company) or any of their respective assets or
properties that is required to be described in the Registration Statement
or the Prospectus and is not so described or (B) which, if determined
adversely to the Guarantor or such subsidiary, would result in a Material
Adverse Effect or (B) of any contract or other document that is required to
be described in the Registration Statement or the Prospectus, or to be
filed as an exhibit to the Registration Statement, that is not described or
filed, as required.
(iv) The execution and delivery by each of the Company and the
Guarantor of, and the performance by each of the Company and the Guarantor
of its obligations under, the Underwriting Agreement, the Indenture and the
Supplemental Indenture and the consummation by each of the Company and the
Guarantor of the transactions contemplated by the Underwriting Agreement,
the Indenture and the Supplemental Indenture do not and will not
contravene any provision of law, rule or regulation known to such counsel
applicable to the Guarantor or any of its subsidiaries, except that such
counsel need not express any opinion in this paragraph with respect to
state securities laws; (B) contravene any judgment, order or decree known
to such counsel of any court or governmental agency or body having
jurisdiction over the Guarantor or any of its subsidiaries or
B-1
by which the Guarantor or any of its subsidiaries is bound or by which
their properties or assets may be affected; (C) conflict with, result in
any breach or violation of or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
give rise to any right to accelerate the maturity or require the prepayment
of any indebtedness or the purchase of any capital stock under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Guarantor or any of its subsidiaries, pursuant
to the terms of, any agreement or instrument to which the Guarantor or any
of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the assets, properties or operations of the Guarantor or
any of its subsidiaries is subject, except for such conflicts, breaches,
violations, defaults, accelerations, repayments, repurchases, liens,
charges or encumbrances that would not singly and in the aggregate result
in a Material Adverse Effect; or (D) require any consent, approval or
authorization or order of, or qualification with, any governmental agency
or authority or court under state insurance laws; and
(v) Neither the Guarantor nor any of its subsidiaries (including the
Company) is in violation of its charter, by-laws or other organizational
documents. No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default, in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument,
to which the Guarantor or any of its subsidiaries (including the Company)
is a party or by which the Guarantor or any of its subsidiaries (including
the Company) or any of their respective properties is bound or may be
affected which would have a Material Adverse Effect.
Such counsel shall also state that he has examined various documents and
participated in conferences with representatives of the Company and the
Guarantor and their accountants and with representatives of the Representatives
and their counsel at which times the contents of the Registration Statement and
the Prospectus and related matters were discussed, and that, although he is not
passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus or making any representation that he has independently verified or
checked the accuracy, completeness or fairness of such statements, except as set
forth above, no facts have come to his attention that cause him to believe that
the Registration Statement or any post-effective amendment thereto, at the time
the Registration Statement or any post-effective amendment thereto became
effective or as of the date of Underwriting Agreement, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
that the Prospectus or any amendment or supplement thereto, at the date of the
Prospectus, at the date of any such amendment or
B-2
supplement or on the Closing Date, included or includes any untrue statement of
a material fact or omitted or omits 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 (such counsel need not
express a belief with respect to the financial statements and supporting
schedules and other financial data included in or omitted from the Registration
Statement or any post-effective amendment thereto or the Prospectus or any
amendment or supplement thereto).
B-3
Exhibit C
FORM OF OPINION OF CONNERS DILL & PEARMAN, GUARANTOR'S
BERMUDA COUNSEL, TO BE DELIVERED
PURSUANT TO SECTION 8(d)
May [ ], 2000
Prudential Securities Incorporated
and the Several Underwriters
named in Schedule 1 to the
Underwriting Agreement (as
hereinafter defined)
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
USA
Dear Sirs
Mutual Risk Management Ltd. (the "Guarantor")
We have acted as special legal counsel in Bermuda to the Guarantor, a Bermuda
exempted company, in connection with the Underwriting Agreement dated as of May
[ ], 2000 (the "Underwriting Agreement"), by and among the Guarantor, Mutual
Group Ltd., Prudential Securities Incorporated and the several Underwriters
named in Schedule 1 to the Underwriting Agreement.
This opinion is delivered to you pursuant to section 8(d) of the Underwriting
Agreement.
For the purposes of giving this opinion, we have examined an executed version of
the Underwriting Agreement.
- 2 -
We have also reviewed:
(i) Amendment No. 1 to the Form S-3 Registration Statement ("Registration
Statement") filed by the Guarantor with the United States Securities
and Exchange Commission under the United States Securities Act of
1933 (Registration No.333-96425), together with the form of
Prospectus annexed thereto ("Prospectus");
(ii) An Indenture dated as of May [ ], 2000 (the "Indenture") among
Mutual Group Ltd., the Guarantor, as guarantor, and The Chase
Manhattan Bank, a New York banking corporation, as trustee, as
supplemented by a Supplemental Indenture to be dated as of [ ],
2000 (the "Supplemental Indenture"); and
(iii) The form of Guarantee to be issued by the Guarantor.
The documents listed in items (ii) and (iii) above together with the
Underwriting Agreement are herein sometimes collectively referred to as the
"Documents" (which term does not include any other instrument or agreement
whether or not specifically referred to therein or attached as an exhibit or
schedule thereto).
We have also reviewed the memorandum of association and the bye-laws of the
Guarantor, each certified by the secretary of the Guarantor on the date hereof,
minutes of a meeting of its directors held on March 16, 2000 (the "Minutes"),
and such other documents and made such enquiries as to questions of law as we
have deemed necessary in order to render the opinion set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of each of the parties to the Documents, other than the Guarantor, to
enter into and perform its respective obligations under the Documents, (d) the
due execution of the Documents by each of the parties thereto, other than the
Guarantor, and the delivery thereof by each of the parties thereto, (e) the
accuracy and completeness of all factual representations made in the Documents
and other documents reviewed by us, (f) that the resolutions contained in the
Minutes remain in full force and effect and have not been rescinded or amended,
(g) that there is no provision of the law of any jurisdiction, other than
Bermuda, which would have any implication in relation to the opinions expressed
herein, (h) the validity and binding effect under the laws of the State of new
York in the United States of America (the "Foreign Laws") of the Documents which
are expressed to be governed by such Foreign Laws in accordance with their
respective terms, (i) the validity and binding effect under the Foreign Laws of
the submission by the Guarantor pursuant to the Documents to the non-exclusive
jurisdiction of the courts of any United States Federal or New York State court
sitting in the Borough of Manhattan in the City of New York in the said United
States of America (the "Foreign Courts").
- 3 -
The obligations of the Guarantor under the Documents (a) will be subject to the
laws from time to time in effect relating to bankruptcy, insolvency,
liquidation, possessory liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a similar nature or
otherwise, generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceedings may be brought, (c)
will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available, (d) may not be given effect to by a Bermuda court, whether or not it
was applying the Foreign Laws, if and to the extent they constitute the payment
of an amount which is in the nature of a penalty and not in the nature of
liquidated damages. Notwithstanding any contractual submission to the
jurisdiction of specific courts, a Bermuda court has inherent discretion to stay
or allow proceedings in the Bermuda courts.
We express no opinion as to the enforceability of any provision of the Documents
which provides for the payment of a specified rate of interest on the amount of
a judgment after the date of judgment or which purports to fetter the statutory
powers of the Guarantor.
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and is not to be relied upon by any other person, firm
or entity or in respect of any other matter.
On the basis of and subject to the foregoing, we are of opinion that:
1. Each of the Guarantor and Mutual Indemnity Ltd., Mutual Indemnity (Bermuda)
Ltd., Mutual Indemnity (U.S.) Ltd., MRM Life Ltd., Premium Securities
Limited, Premium Securities (Bermuda) Limited, SPDA Limited and Capital
Management of Bermuda Limited (the "Bermuda Subsidiaries") is validly
existing under the laws of Bermuda as a Guarantor with limited liability
and is in good standing under the laws of Bermuda (meaning that the
Guarantor and each of the Bermuda Subsidiaries has not failed to make any
filing with any Bermuda governmental authority or to pay any Bermuda
government fee or tax, the failure of which would make such Guarantor
immediately liable to be struck off the Register of Companies and thereby
cease to exist under the laws of Bermuda). The objects and powers contained
in the memorandum of association of each of the Guarantor and the Bermuda
Subsidiaries are sufficient to allow it to carry on its business and to
own, lease and operate its properties as both are described in the
Prospectus and, in the case of the Guarantor, to enter into and to perform
its obligations under, or as contemplated under, the Documents.
2. The authorized share capital of the Guarantor, as set out in its memorandum
of association, conforms as to legal matters to the description thereof
contained in the Registration Statement and the Prospectus. All of the
issued shares in the share capital of each of the Guarantor and the Bermuda
Subsidiaries have been duly and validly authorized and issued
- 4 -
and are fully paid and non-assessable (meaning that, subject to the common
law doctrine of "piercing the corporate veil" and to any agreement to the
contrary between the registered holders and the Guarantor or any of the
Bermuda Subsidiaries, as the case may be, no further sums are required to
be paid by the holders thereof in connection with the issue of such
shares). The Guarantor is the ultimate beneficial owner of all of the
issued shares of each of the Bermuda Subsidiaries. The holders of the
Common Shares of the Guarantor are not subject to any pre-emptive rights
under the laws of Bermuda or the Guarantor's memorandum of association or
bye-laws.
3. The Documents have been duly authorized, executed and delivered by the
Guarantor.
4. The execution and delivery by the Guarantor of, and the performance by the
Guarantor of its obligations under the Documents, and the consummation by
the Guarantor of the transactions contemplated by the Documents do not and
will not (a) violate any provision of the memorandum of association and
bye-laws of the Guarantor; (b) contravene any provision of any of those
laws, rules and regulations of Bermuda which are applicable to transactions
of the type contemplated by the Documents; (c) based solely upon the Cause
Book maintained at the Bermuda Supreme Court and without further inquiry,
contravene any judgment, order or decree by the Bermuda Supreme Court
against the Guarantor or any of the Bermuda Subsidiaries; or (d) require
any consent, approval or authorization or order of, or qualification with,
any Bermuda governmental agency.
5. Based solely upon an inspection of the Cause Book maintained at then
Supreme Court of Bermuda and without further inquiry, there is no action,
suit or proceeding now pending before the Bermuda Supreme Court to which
the Guarantor or any of the Bermuda Subsidiaries is a party or to which the
assets, properties or operations of the Guarantor or any of Bermuda
Subsidiaries is subject.
6. All statements (but excluding those statements forming a part of financial
information or accounts) made in the Registration Statement and Prospectus
with respect to statutes, regulations, rules, treaties and other laws of
Bermuda (including, but not limited to, statements made with respect to the
Insurance Act and Bermuda tax matters) fairly and accurately present the
information set forth therein and such counsel's opinion as to such
matters.
7. Pursuant to the Underwriting Agreement, and to the extent that the laws of
Bermuda are relevant, the Guarantor has legally, validly, effectively and
irrevocably submitted to the jurisdiction of the United States Federal and
New York State courts sitting in the Borough of Manhattan in The City of
New York, State of New York, and has legally, validly and effectively
appointed CT Corporation System as the authorized agent of the Guarantor
for the purposes described in Section 16 of the Underwriting Agreement.
- 5 -
8. The choice of the Foreign Laws as the governing law of the Documents is a
valid choice of law and would be recognised and given effect to in any
action brought before a court of competent jurisdiction in Bermuda, except
for those laws (i) which such court considers to be procedural in nature,
(ii) which are revenue or penal laws or (iii) the application of which
would be inconsistent with public policy, as such term is interpreted under
the laws of Bermuda.
9. The courts of Bermuda would recognise as a valid judgment, a final and
conclusive judgment in personam obtained in the Foreign Courts against the
Guarantor based upon the Documents under which a sum of money is payable
(other than a sum of money payable in respect of multiple damages, taxes or
other charges of a like nature or in respect of a fine or other penalty)
and would give a judgment based thereon provided that (a) such courts had
proper jurisdiction over the parties subject to such judgment, (b) such
courts did not contravene the rules of natural justice of Bermuda, (c) such
judgment was not obtained by fraud, (d) the enforcement of the judgment
would not be contrary to the public policy of Bermuda, (e) no new
admissible evidence relevant to the action is submitted prior to the
rendering of the judgment by the courts of Bermuda and (f) there is due
compliance with the correct procedures under the laws of Bermuda.
10. Each of the Bermuda Subsidiaries is duly registered as an insurer under the
Insurance Act of 1978, as amended by the Insurance Amendment Act of 1995,
and the regulations promulgated thereunder (together, the "Insurance Act")
and as so registered, each of the Bermuda Subsidiaries may conduct that
insurance business which it is described in the Prospectus as carrying on;
and, based solely on the certificates of compliance and without independent
inquiry, each of the Bermuda Subsidiaries has filed with the appropriate
Bermuda governmental authority all reports, documents or other information
required to be filed under the Insurance Act. On the basis that the
Guarantor carries on its business as set forth in the Prospectus, there is
no requirement that it be licensed under the Insurance Act.
Yours faithfully