EXHIBIT 1.1
ASPEN INSURANCE HOLDINGS LIMITED
ORDINARY SHARES, PAR VALUE 0.15144558(CENTS) PER SHARE
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UNDERWRITING AGREEMENT
December __, 2003
Credit Suisse First Boston LLC
Goldman, Sachs & Co.
Deutsche Bank Securities Inc.
UBS Securities LLC
Dowling & Partners Securities, LLC
Fox-Pitt, Kelton Inc.
Keefe, Bruyette & Woods, Inc.
As representatives of the several Underwriters
named in Schedule A hereto,
c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, New York 10010
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Aspen Insurance Holdings Limited, a Bermuda company (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule A hereto (the "Underwriters") an aggregate
of 9,524,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 1,428,600 additional shares (the "Optional Shares") of
ordinary shares, par value 0.15144558(cents) per share ("Stock"), of the
Company. The Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof are herein collectively called the
"Shares."
1. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement on Form F-1 (File No. 333-110435)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and,
excluding exhibits thereto, to you for each of the other Underwriters,
have been declared effective by the Commission in such form; other than
a registration statement, if any, increasing the size of the offering
(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission;
and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Registration Statement at the time it was
declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the
Rule 462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Credit Suisse First Boston LLC and Goldman, Sachs &
Co. (together, the "Lead Representatives") expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through the Lead Representatives expressly for use therein;
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(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its
business (exclusive of reinsurance treaties and insurance policies
covering third-party risks) from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock, the capital or surplus or long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(e) Neither the Company nor any of Aspen Insurance UK Limited
("Aspen U.K."), Aspen Insurance Limited ("Aspen Bermuda") and Aspen
Specialty Insurance Company ("Aspen U.S."; and together with Aspen
U.K., Aspen Bermuda, the "Designated Subsidiaries") hold title to any
real property; all of the leases, subleases and licenses under which
the Company or any of its Designated Subsidiaries holds real properties
described in the Prospectus, are in full force and effect, and neither
the Company nor any Designated Subsidiary has any notice of any claim
of any sort that has been asserted by anyone adverse to the rights of
the Company or any Designated Subsidiary under any of the leases,
subleases or licenses mentioned above, or affecting or questioning the
rights of the Company or such Designated Subsidiary to the continued
possession of the leased, subleased or licensed premises under any such
lease or sublease, except where the failure to have such leases in full
force and effect or the failure to have any such notice of any such
claim would not, individually or in the aggregate, result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, results of operations, business affairs, shareholders' equity
or business prospects of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect");
(f) The Company has been duly incorporated and is validly
existing as an exempted company in good standing under the laws of
Bermuda, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction, except where the failure to so
qualify would not result in a Material Adverse Effect; each of the
Designated Subsidiaries has been duly organized or incorporated and is
validly existing as a company or corporation in good standing
(including, in the case of Aspen Insurance Limited, as an exempted
company) under the laws of its jurisdiction of organization or
incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign company or corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to
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be so qualified in any such jurisdiction, except where the failure to
so qualify would not result in a Material Adverse Effect; and except
for Aspen (UK) Holdings Limited ("Aspen U.K. Holdings"), Aspen
Insurance UK Services Limited ("Aspen U.K. Services"), Aspen U.S.
Holdings, Inc. ("Aspen U.S. Holdings"), Aspen Specialty Insurance
Management Inc. ("Aspen Specialty"), Aspen Insurance U.S. Services
Inc. ("Aspen U.S. Services") and Aspen Re America, Inc. ("Aspen Re
America") each of which is immaterial and not a "significant
subsidiary" of the Company as that term is defined in Rule 1-02(w) of
Regulation S-X of the rules and regulations of the Commission under
the Securities Act, the Designated Subsidiaries are the only
subsidiaries of the Company.
(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description of the Stock
contained in the Prospectus; and all of the currently issued and
outstanding shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and except as set forth in the Prospectus, are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to acquire the Shares which have not been complied with; there
are no outstanding securities convertible into or exchangeable for, or
warrants, rights or options to purchase from the Company, or
obligations of the Company to issue, the Stock or any other class of
capital stock of the Company (except for the 3,781,120 options issued
to Wellington Underwriting plc and the 3,006,760 options issued to the
Names' Trustees Limited (collectively the "Investor Options") and
options issued pursuant to the Company's share incentive plan); except
as disclosed in the Prospectus, there are no restrictions on subsequent
transfers of the Shares under the laws of Bermuda and of the United
States; and except as disclosed in the Prospectus, no party has the
right to require the Company to register securities;
(h) This Agreement has been duly authorized, executed and
delivered by the Company;
(i) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued and fully paid and non-assessable and will
conform in all material respects to the description of the Stock
contained in the Prospectus;
(j) There are no currency exchange control laws or withholding
taxes, in each case of Bermuda or the United Kingdom (or any political
subdivision or taxing authority thereof) that would be applicable to
the payment of dividends (i) on the Shares by the Company (other than
as may apply to residents of Bermuda for Bermuda exchange control
purposes or (ii) by any of the Company's subsidiaries to the Company;
the Bermuda Monetary Authority (the "BMA") has designated the Company
and Aspen Bermuda as non-resident for exchange control purposes and has
granted permission for the issue and free transferability of the Shares
being offered pursuant to the Registration Statement, as long as they
are listed on the New York Stock Exchange (the "NYSE"), to and among
persons who are non-residents of Bermuda for exchange control purposes
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(including permission for the issue and free transferability of up to
20% of the Shares to and among persons who are residents of Bermuda for
exchange control purposes); such permission has not been revoked and is
in full force and effect, and the Company has no knowledge of any
proceedings planned or threatened for the revocation of such
permission; the Company and Aspen Bermuda are "exempted companies"
under Bermuda law and have not (i) acquired and do not hold any land
for their respective business in Bermuda, other than that held by way
of lease or tenancy for terms of not more than 50 years, without the
express authorization of the Bermuda Minister of Finance, (ii) acquired
and do not hold land by way of lease or tenancy for terms of not more
than 21 years in order to provide accommodation or recreational
facilities for their officers and employees, without the express
authority of the Bermuda Minister of Finance, (iii) taken mortgages on
land in Bermuda to secure an amount in excess of $50,000, without the
consent of the Bermuda Minister of Finance, (iv) acquired any bonds or
debentures secured by any land in Bermuda, except bonds or debentures
issued by the government of Bermuda or a public authority of Bermuda,
or (v) conducted their business in a manner that is prohibited for
"exempted companies" under Bermuda law; neither the Company nor Aspen
Bermuda has received notification from the BMA or any other Bermuda
governmental authority of proceedings relating to the modification or
revocation of its designation as non-resident for exchange control
purposes, its permission to issue and transfer the Shares, or its
status as an "exempted company";
(k) The issue and sale of the Shares to be sold by the Company
hereunder, the execution, delivery and performance of this agreement
(the "Agreement"), the compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, (i) the certificate of incorporation, memorandum of association,
articles of association, bye-laws, by-laws or other organizational
document (any such document, a "Constitutional Document"), as the case
may be, of the Company or any of its subsidiaries, (ii) any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries
is subject, or (iii) any statute or any order, rule or regulation of
any court or governmental agency or body, any stock exchange authority
or any other regulatory authority (hereinafter referred to as a
"Governmental Agency") having jurisdiction over the Company or any of
its subsidiaries or any of their properties, except, in the case of
clause (ii), as would not, individually or in the aggregate, result in
a Material Adverse Effect;
(l) No consent, approval, authorization, order, registration
or qualification of or with any Governmental Agency (hereinafter
referred to as the "Governmental Authorizations") is required for the
issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except (A) the
registration under the Act of the Shares, (B) such Governmental
Authorizations as have been duly obtained and are in full force and
effect and copies of which have been furnished to you, (C) such
Governmental Authorizations as may be required under state securities
laws, Blue Sky laws, insurance securities laws or any laws of
jurisdictions outside the United States in connection with the purchase
and distribution of the Shares
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by or for the account of the Underwriters, (D) such consents, approvals
or authorizations required by the NYSE in connection with the listing
of the Shares, (E) the filing of the Prospectus with the Registrar of
Companies in Bermuda in accordance with Bermuda law and (F) such
consents, approvals, authorizations, registrations or qualifications as
may be required and have been obtained from the BMA;
(m) Except as disclosed in the Prospectus, all retrocessional
and reinsurance treaties, contracts and arrangements that are filed as
exhibits to the Registration Statement are in full force and effect;
neither the Company nor any of the Designated Subsidiaries is (i) in
violation of any of its Constitutional Documents or (ii) in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other material agreement, or instrument to which it
is a party or by which it or any of its properties may be bound,
except, in the case of clause (ii), for any such defaults or violations
that would not, individually or in the aggregate, result in a Material
Adverse Effect or as otherwise waived or consented to by the parties or
shareholders to which the Company or the Designated Subsidiaries owes
any obligations under such agreements or documents;
(n) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the Underwriters to Bermuda or any political subdivision
or taxing authority thereof or therein in connection with (A) the sale
and delivery by the Company of the Shares to or for the respective
accounts of the Underwriters or (B) the sale and delivery outside
Bermuda by the Underwriters of the Shares to the initial purchasers
thereof;
(o) The Company has no knowledge of any threatened or pending
downgrading of the rating accorded the Company or any of the Designated
Subsidiaries' financial strength or claims-paying ability by A.M. Best
Company, Inc., Standard & Poor's Ratings Service, a Division of The
McGraw-Hill Companies, Inc., and Moody's Investors Services, Inc., the
only "nationally recognized statistical rating organizations," as that
term is defined by the Commission for purposes of Rule 463(g)(2) under
the Act which currently rate the claims-paying ability of one or more
of the Designated Subsidiaries; and no such organization currently
rates any securities of the Company or any of its subsidiaries;
(p) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, result in a
Material Adverse Effect; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by any Governmental
Agency or threatened by others;
(q) The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be, required to register as an "investment company,"
as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
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(r) Each of the Designated Subsidiaries and Aspen Specialty is
duly licensed as an insurance brokerage company, insurer or reinsurer,
as the case may be, under the insurance laws and the rules, regulations
and interpretations of the insurance regulatory authorities thereunder
(collectively, "Insurance Laws"), of each jurisdiction in which the
conduct of its existing business as described in the Prospectus
requires such licensing, except for such jurisdictions in which the
failure to be so licensed would not, individually or in the aggregate,
result in a Material Adverse Effect; each of the Company, the
Designated Subsidiaries and Aspen Specialty has made all required
filings under applicable holding company statutes or other Insurance
Laws in each jurisdiction where such filings are required, except for
such jurisdictions in which the failure to make such filings would not,
individually or in the aggregate, result in a Material Adverse Effect;
except as described in the Prospectus, each of the Company, the
Designated Subsidiaries and Aspen Specialty has all other necessary
authorizations, approvals, orders, consents, certificates, licenses,
permits, registrations and qualifications of and from all insurance
regulatory authorities necessary to conduct their respective existing
businesses as described in the Prospectus and all of the foregoing are
in full force and effect, except where the failure to have such
authorizations, approvals, orders, consents, certificates, permits,
registrations or qualifications or their failure to be in full force
and effect would not, individually or in the aggregate, result in a
Material Adverse Effect; none of the Company, the Designated
Subsidiaries or Aspen Specialty has received any notification from any
insurance regulatory authority or other governmental authority in the
United States, Bermuda, the United Kingdom or elsewhere to the effect
that any additional authorization, approval, order, consent,
certificate, permit, registration or qualification is needed to be
obtained by either the Company, the Designated Subsidiaries or Aspen
Specialty to conduct its existing business as described in the
Prospectus; and except as otherwise described in the Prospectus, no
insurance regulatory authority has issued any order or decree
impairing, restricting or prohibiting the payment of dividends by the
Company or any of the Designated Subsidiaries;
(s) Each of the Company and the Designated Subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(t) Each of the Company and the Designated Subsidiaries has
filed all statutory financial returns, reports, documents and other
information required to be filed pursuant to the applicable Insurance
Laws of the United States and the various states thereof, Bermuda, the
United Kingdom and each other jurisdiction applicable thereto, except
where the failure, individually or in the aggregate, to file such
return, report, document or information would not result in a Material
Adverse Effect; and each of the Company and the Designated Subsidiaries
maintains its books and records in accordance with, and is otherwise in
compliance with, the applicable Insurance Laws of the United States and
the various states thereof, Bermuda, the United Kingdom and each other
7
jurisdiction applicable thereto, except where the failure to so
maintain its books and records or be in compliance would not
individually or in the aggregate result in a Material Adverse Effect;
(u) (i) Any tax returns required to be filed by the Company or
any of its subsidiaries, other than Aspen U.S., Aspen U.K. and Aspen
U.K. Services, in any jurisdiction have been accurately prepared and
timely filed and any taxes, including any withholding taxes, excise
taxes, franchise taxes and similar fees, sales taxes, use taxes,
penalties and interest, assessments and fees and other charges due or
claimed to be due from such entities have been paid, other than any of
those being contested in good faith and for which adequate reserves
have been provided or any of those currently payable without penalty or
interest and (ii) to the Company's knowledge, any tax returns required
to be filed by Aspen U.S., Aspen U.K. and Aspen U.K. Services in any
jurisdiction have been accurately prepared and timely filed and any
taxes, including any withholding taxes, excise taxes, franchise taxes
and similar fees, sales taxes, use taxes, penalties and interest,
assessments and fees and other charges due or claimed to be due from
Aspen U.S. have been paid, other than any of those being contested in
good faith and for which adequate reserves have been provided or any of
those currently payable without penalty or interest, in either case (i)
except to the extent that the failure to so file or pay would not
result in a Material Adverse Effect and (ii) other than those tax
returns that would be required to be filed or taxes that would be
payable by the Company or any of its subsidiaries if (A) any of them
was characterized as a "personal holding company" as defined in Section
542 of the Internal Revenue Code of 1986, as amended (the "Code"), (B)
any of them other than Aspen Specialty, Aspen U.S., Aspen U.S.
Holdings, Aspen U.S. Services and Aspen Re America (collectively, the
"U.S. Subsidiaries") was characterized as engaged in a U.S. trade or
business, and (C) any of them other than Aspen U.K., Aspen U.K.
Holdings and Aspen U.K. Services (collectively, the "U.K.
Subsidiaries") was characterized as resident, managed and controlled or
carrying on a trade through a branch or agency in the United Kingdom;
no deficiency assessment with respect to a proposed adjustment of the
Company's or any of its subsidiaries' taxes is pending or, to the best
of the Company's knowledge, threatened; and there is no material tax
lien, whether imposed by any federal, state, or other taxing authority,
outstanding against the assets, properties or business of the Company
or any of its subsidiaries;
(v) Each of the Company and Aspen Bermuda have received from
the Bermuda Minister of Finance an assurance under the Exempted
Undertakings Tax Protection Act 1966, as amended, of Bermuda to the
effect set forth in the Prospectus under the caption "Material Tax
Considerations--Taxation of Aspen Holdings and Subsidiaries--Bermuda,"
and the Company has not received any notification to the effect (and is
not otherwise aware) that such assurance may be revoked or otherwise
not honored by the Bermuda government;
(w) Based upon and subject to the assumptions and
qualifications set forth in the Prospectus under the caption "Material
Tax Considerations," the Company does not believe (i) that either the
Company or any of its subsidiaries currently should be, or upon the
sale of the Shares herein contemplated should be, (A) treated as a
"passive foreign investment company" as defined in Section 1297(a) of
the Code, (B) considered a "foreign personal holding company" as
defined in Section 552 of the Code, (C)
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characterized as a "personal holding company" as defined in Section 542
of the Code, (D) except for the U.S. Subsidiaries, considered to be
engaged in a trade or business within the United States for purposes of
Section 864(b) of the Code (although the Internal Revenue Service may
be able to successfully assert that Aspen U.K. has a U.S. trade or
business and a U.S. permanent establishment as a result of the binding
authorities granted to Wellington Underwriting Inc. by Aspen U.K. and
likely will be able to successfully assert that Aspen U.K. has a U.S.
trade or business and a permanent establishment as a result of the
binding authorities granted to Aspen Re America by Aspen U.K.), or (E)
except for the U.K. Subsidiaries, characterized as resident, managed or
controlled or carrying on a trade through a branch or agency in the
United Kingdom or (ii) that any U.S. person who owns shares of the
Company directly or indirectly through foreign entities should be
treated as owning (directly, indirectly through foreign entities or by
attribution pursuant to Section 958(b) of the Code) 10 percent or more
of the total voting power of the Company or any of its foreign
subsidiaries; and to the best of the Company's knowledge, in the event
that the Internal Revenue Service was successful in asserting that
Aspen U.K. has a U.S. trade or business as a result of the binding
authorities granted to Wellington Underwriting Inc. and Aspen Re
America by Aspen U.K., it would not result in a Material Adverse
Effect;
(x) Aspen U.K. and Aspen Bermuda intend to operate in a manner
that is intended to ensure that the related person insurance income of
either of Aspen U.K. or Aspen Bermuda does not equal or exceed 20% of
each such company's gross insurance income for any taxable year in the
foreseeable future;
(y) The consolidated financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly, in all material respects, the
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
for the periods specified; except as otherwise disclosed in the
Registration Statement and Prospectus, said consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States ("U.S. GAAP") applied on a
consistent basis throughout the periods involved; the supporting
schedules included in the Registration Statement present fairly, in all
material respects, in accordance with U.S. GAAP, the information
required to be stated therein; and the selected financial data and the
summary financial information included in the Registration Statement
and Prospectus present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement;
(z) The financial statements of Syndicates 2020 and 3030
(including the related notes and supporting schedules) included in the
Prospectus and the Registration Statement present fairly in all
material respects the identifiable underwriting assets and liabilities
of the Syndicates Business (as defined in the Prospectus) as of
December 31, 2000, 2001 and 2002, and its underwriting results and its
identifiable underwriting cash flows for each of the years in the
three-year period ended December 31, 2001 in conformity with U.S. GAAP;
9
(aa) KPMG Audit Plc, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(bb) The issue and sale of the Shares by the Company and the
consummation of the transactions contemplated by this Agreement,
including but not limited to any actions taken pursuant to the
indemnification and contribution provisions set forth herein, will not,
subject to Section 39A(2A) of the Companies Act 1981, constitute
unlawful financial assistance by the Company under Bermuda law.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price per Share of [ ], the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A hereto and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at the purchase price per Share set forth in clause (a) of this Section
2, that portion of the number of Optional Shares as to which such election shall
have been exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 1,428,600 Optional Shares, at the purchase price per Share
set forth in the paragraph above, for the sole purpose of covering sales of
shares in excess of the number of Firm Shares. Any such election to purchase
Optional Shares shall be made in proportion to the maximum number of Optional
Shares to be sold by the Company as set forth in Schedule A hereto. Any such
election to purchase Optional Shares may be exercised only by written notice
from the Lead Representatives to the Company, given within a period of 30
calendar days after the date of this Agreement and setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by you but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless you and
the Company otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
The Company hereby confirms its engagement of Goldman, Sachs & Co. as,
and Goldman, Sachs & Co. hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within the meaning of
Rule 2720(b)(15) of the National Association of Securities Dealers, Inc. with
respect to the offering and sale of the Shares. Goldman, Sachs & Co., in its
capacity as qualified independent underwriter and not otherwise, is referred to
herein as the "QIU". As compensation for the services of the QIU hereunder, the
Company agrees to pay the QIU $1,000 on the Closing Date.
3. (a) Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
10
(b) Each Underwriter represents, warrants and agrees that: (i) it has
not offered or sold and, prior to the expiry of a period of six months from the
closing of the offering of the Shares, will not offer or sell any Shares to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received
by it in connection with the issue or sale of any Shares in circumstances in
which section 21(1) of the FMSA does not apply to the Company; and (iii) it has
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Shares in, from or otherwise involving
the United Kingdom.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Lead Representatives may request upon at least forty-eight hours'
prior notice to the Company shall be delivered by or on behalf of the Company to
the Lead Representatives, through the facilities of The Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to the Lead
Representatives at least forty-eight hours in advance. The Company will cause
the certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of Simpson Thacher & Bartlett LLP, 425
Lexington Avenue, New York, New York 10017 (the "Designated Office"). The time
and date of such delivery and payment shall be, with respect to the Firm Shares,
9:30 a.m., New York City time, on December __, 2003, or such other time and date
as the Lead Representatives and the Company may agree upon in writing, and, with
respect to the Optional Shares, 9:30 a.m., New York time, on the date specified
by the Lead Representatives in the written notice given by the Lead
Representatives of the Underwriters' election to purchase such Optional Shares,
or such other time and date as the Lead Representatives and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7 hereof, will be delivered at the offices of
Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017
(the "Closing Location"), and the Shares will be delivered as specified in
Section (a) above, all at such Time of Delivery. A meeting will be held at the
Closing Location at 2 p.m., New York City time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
11
and Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its reasonable best efforts to obtain
the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws or Blue Sky laws of such jurisdictions as you may
reasonably request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Shares,
provided that in connection therewith the Company shall not be required
to qualify as a foreign company or corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified, or to
file a general consent to service of process in any jurisdiction, or to
subject itself to material taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written and electronic copies
of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue
of the Prospectus in connection with the offering or sale of the Shares
and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in
order to comply with the Act, to notify you and upon your request to
prepare and furnish without charge to each Underwriter and to any
dealer
12
in securities as many written and electronic copies as you may from
time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any securities of the Company that
are substantially similar to the Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee stock option plans existing
on, or upon the exercise, conversion or exchange of exercisable,
convertible or exchangeable securities outstanding as of, the date of
this Agreement), without your prior written consent;
(f) So long as required under the Company's bye-laws, to
comply with the periodic reporting and related disclosure requirements,
including the filing of periodic reports on Forms 10-K, 10-Q and 8-K
that are applicable to a U.S. domestic private issuer whose securities
are registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); and so long as required under the
Company's bye-laws, the audited financial statements contained in such
annual reports and unaudited quarterly financial information contained
in such quarterly reports will be prepared in accordance with U.S. GAAP
and will include "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for the relevant periods;
(g) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(h) To use its best efforts to list, subject to notice of
issuance, the Shares on the NYSE;
(i) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act; and
13
(j) To file with the Commission such information as may be
required by Rule 463 under the Act.
6. The Company covenants and agrees and with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement (excluding the fees of the
counsels retained by the Underwriters) and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iii) all expenses
in connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey (such fees and
disbursements of counsel not to exceed $5,000); (iv) all fees and expenses in
connection with listing the Shares on the NYSE; (v) the filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares, including reasonable fees
and disbursements of counsel incurred on behalf of the QIU (such fees and
disbursements of counsel not to exceed $30,000); (vi) the fees and expenses of
the Authorized Agent (as defined in Section 15 hereof); (vii) the cost of
preparing stock certificates; (viii) the cost and charges of any transfer agent
or registrar; (ix) a fee in the amount of $1,000 payable to Goldman, Sachs &
Co., as the QIU; (x) for all travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Shares, including the cost
of any private aviation and (xi) all other costs and expenses of the Company
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8, 9 and 12 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its and their
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on
14
the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Simpson Thacher & Bartlett LLP, counsel for the
Underwriters, shall have furnished to you their written opinion, dated
such Time of Delivery, with respect to such matters as you may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the
Company, shall have furnished to you their written opinion, dated such
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Each of Aspen U.S. Holdings, Aspen U.S. Services,
Aspen Re America and Aspen Specialty is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power
to own, lease and operate its existing properties and to
conduct its existing business, in each case as described in
the Prospectus; all of the issued shares of capital stock of
Aspen U.S. Holdings, Aspen U.S. Services, Aspen Re America and
Aspen Specialty have been duly and validly authorized and
issued, are fully paid and non-assessable, and based solely
upon such counsel's review of the share register or, in the
absence of such share register, share certificate(s) and
relevant board resolutions of each such subsidiary, are
registered under the name of Aspen U.K. Holdings or its
subsidiaries;
(ii) Aspen Specialty has all permits, licenses and
authorizations necessary under the laws, rules and regulations
of the United States and the Commonwealth of Massachusetts
(including, without limitation, any Insurance Laws) to conduct
its existing business as described in the Prospectus except
where the failure to have such permits, licenses or
authorizations would not, individually or in the aggregate,
result in a Material Adverse Effect;
(iii) Assuming the due authorization by the Company
of this Agreement, to the extent that execution and delivery
are matters of New York law, this Agreement has been duly
executed and delivered by the Company;
(iv) Under the laws of the State of New York relating
to personal jurisdiction, the Company has, pursuant to Section
15 of this Agreement, validly and irrevocably submitted to the
personal jurisdiction of any state or federal court located in
the Borough of Manhattan, The City of New York, New York (each
a "New York Court") in any action arising out of or relating
to this Agreement or the transactions contemplated hereby, has
validly and irrevocably waived any objection to the venue of a
proceeding in any such court, and has validly and irrevocably
appointed the Authorized Agent (as defined herein) as its
authorized agent for the purpose described in Section 15
hereof; and service of process effected on such agent in the
manner set forth in Section 15 hereof will be effective to
confer valid personal jurisdiction over the Company;
(v) To such counsel's knowledge, there are no United
States federal, State of New York or Commonwealth of
Massachusetts legal or governmental
15
proceedings pending or threatened against the Company or any
of its Designated Subsidiaries, or to which the Company or any
of its Designated Subsidiaries or any of their respective
properties is subject, that are required to be described in
the Registration Statement or Prospectus and are not so
described;
(vi) Neither the execution, delivery and performance
of this Agreement, nor the compliance by the Company with all
of the provisions of this Agreement, nor the consummation of
the transactions herein contemplated, including the issue and
sale of the Shares by the Company at the Time of Delivery,
will conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument set forth on Schedule I(a), nor
will such action result in any violation of the provisions of
any Constitutional Document of Aspen U.S. Holdings, Aspen
Specialty, Aspen U.S. Services or Aspen Re America, or any
statute or any order, rule or regulation known to such counsel
(other than state securities or Blue Sky laws of any
jurisdiction in connection with the purchase and distribution
of the Shares by the Underwriters, as to which such counsel
need not express opinion) of any United States Federal or New
York State Governmental Agency or Massachusetts Governmental
Agency having jurisdiction over the Company or any of such
subsidiaries or any of their properties;
(vii) No Governmental Authorization of the United
States or the State of New York or the Commonwealth of
Massachusetts is required for the issue and sale of the Shares
or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under
the Act of the Shares, and such consents, approvals,
authorizations, registrations or qualifications (A) as have
been obtained and (B) as may be required under state
securities or Blue Sky laws or insurance securities laws (as
to which such counsel need not express opinion) in connection
with the purchase and distribution of the Shares by the
Underwriters;
(viii) The statements set forth in the Prospectus
under the captions "Regulatory Matters--U.S. Regulation,"
"Regulatory Matters--Operations of Aspen U.K. and Aspen
Bermuda," "Material Tax Considerations--Taxation of Aspen
Holdings and Subsidiaries--United States," "Material Tax
Considerations--Taxation of Shareholders--United States
Taxation," "Description of Share Capital--Differences in
Corporate Law," "Description of Share Capital--Registration
Rights Agreement," and in the fifth, sixth and seventh
paragraphs under the caption "Shares Eligible for Future
Sale," insofar as such statements purport to describe the
provisions of the documents referred to therein and the laws
of the United States and the State of New York and the
Delaware General Corporation Law, fairly summarize such
provisions of documents or such laws in all material respects;
(ix) The Company is not, and after giving effect to
the offering and sale of the Shares to be issued and sold by
the Company under this Agreement and application of the net
proceeds from such sale as described in the Prospectus under
the caption "Use of Proceeds" will not be, required to
register as an
16
"investment company," as such term is defined in the
Investment Company Act; and
(x) (A) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the
financial statements and the notes thereto or related
statements, supporting schedules and other financial
information included or referred to therein or omitted
therefrom, as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder; although they do not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus
except for those referred to in the opinion in subsection
(viii) of this Section 7(c);
(B) To the knowledge of such counsel, there are no
agreements, contracts, indentures, leases or other instruments
of a character that are required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that are not described
or filed as required, as the case may be.
Such counsel will also indicate that in the course of
the preparation by the Company of the Registration Statement
and the Prospectus, they have participated in conferences with
certain officers and employees of the Company, with
representatives of KPMG Audit plc, independent auditors for
the Company, and with representatives of and counsel for the
Underwriters, at which conferences the contents of the
Registration Statement and the Prospectus and related matters
were discussed and at which they reviewed certain corporate
records, documents and proceedings. Although they have not
undertaken to determine independently, do not express an
opinion as to, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus except as
stated expressly in subsection (viii) of this Section 7(c),
they have no reason to believe that, as of its effective date,
the Registration Statement or any further amendment thereto
made by the Company prior to such Time of Delivery contained
an 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, as of its
date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus
or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it
being understood that such counsel need not express view with
respect to the financial statements and the notes thereto or
the related statements, supporting schedules and other
financial information included or referred to therein or
omitted therefrom.
17
In rendering such opinion, such counsel may state
that they express no opinion as to the laws of any
jurisdiction other than the laws of the State of New York and
the Commonwealth of Massachusetts, the General Corporation Law
of the State of Delaware and the Federal laws of the United
States of America. In rendering the opinion in subsection (vi)
of this Section 7(c), such counsel need not express any
opinion, however, as to whether or not the execution, delivery
or performance by the Company of this Agreement will
constitute a violation of, or a default under, any covenant,
restriction or provision with respect to financial ratios or
tests or any aspect of the financial condition or results of
operations of the Company or any of its subsidiaries.
(d) Appleby Spurling & Kempe, Bermuda counsel for the Company,
shall have furnished to you their written opinion, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) Each of the Company and Aspen Bermuda is an
exempted company incorporated with limited liability and
existing under the laws of Bermuda; each of the Company and
Aspen Bermuda possess the capacity to sue and be sued in its
own name and is in good standing under the laws of Bermuda;
each of the Company and Aspen Bermuda has full corporate power
and authority and all permits, licenses and authorizations
required by Bermuda law (which remain in full force and
effect) to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the
Prospectus; Aspen Bermuda is duly registered as a Class 4
insurer under The Insurance Act 1978 and the regulations
promulgated thereunder (together, the "Insurance Act") and,
accordingly, Aspen Bermuda is subject to regulation and
supervision in Bermuda and has Bermuda regulatory authority to
conduct the insurance business as described in the Prospectus;
and based solely on the Aspen Bermuda Certificates of
Compliance, Aspen Bermuda has filed with the appropriate
Bermuda governmental authority (including regulatory
authority) all reports, documents and other information
required to be filed under the Insurance Act;
(ii) The authorized, issued and outstanding share
capital of the Company is as set forth in the Prospectus in
the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement or pursuant to this Agreement or
pursuant to reservations, agreements or employee benefit plans
as referred to in the Prospectus; based solely on the
Company's Register of Shareholders, Aspen Bermuda's Register
of Shareholders and resolutions of the Company: (A) all of the
issued shares of capital stock of each of the Company and
Aspen Bermuda have been duly and validly authorized and issued
and are fully paid and non-assessable (collectively, the
"Outstanding Shares"), (B) all of the issued shares of Aspen
Bermuda are registered solely in the name of the Company; and
(C) none of the Outstanding Shares were issued in violation of
the pre-emptive or other similar rights of any shareholder of
the Company or Aspen Bermuda; and the authorized share capital
of the Company and the Shares conform as to legal matters to
the descriptions thereof contained in the Prospectus;
18
(iii) Registered holders of fully paid shares of the
Company will bear no personal liability for debts or
obligations of the Company, under the laws of Bermuda, as a
result of their status as shareholders of the Company;
(iv) The Company has all requisite corporate power
and authority to (A) execute and file the Registration
Statement with the Commission under the Act, (B) enter into,
execute or issue (as the case may be), deliver and perform its
obligations under this Agreement, (C) issue the Shares
pursuant to this Agreement and (D) to take all action as may
be necessary to complete the transactions contemplated
hereunder;
(v) The (A) execution and filing of the Registration
Statement with the Commission under the Act and (B) execution
or issuance, delivery and performance by the Company of this
Agreement and the transactions contemplated hereunder have
been duly authorized by all necessary corporate action on the
part of the Company;
(vi) This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms; and the Registration
Statement has been duly executed by or on behalf of the
Company;
(vii) Except as otherwise provided in this paragraph,
no consent, approval, license, order or authorization or
filing with, or other act by or in respect of, any
Governmental Agency of Bermuda is required to be obtained by
the Company in connection with (A) the authorization,
execution or filing of the Registration Statement and (B) the
execution, delivery or performance by the Company of this
Agreement including, without limitation, the issue and sale of
the Shares to the Underwriters and the consummation by the
Company of the transactions contemplated by this Agreement, or
to ensure the legality, validity, admissibility into evidence
or enforceability as to the Company, of this Agreement:
(A) the permission of the BMA is required
and a letter of permission has been issued for (x)
the "issue and free transferability of the Shares in
the Company being offered pursuant to the
Registration Statement, as long as the Shares are
listed on an appointed stock exchange (as defined in
the Bermuda Companies Act 1981), to and among persons
who are non-residents of Bermuda for exchange control
purposes" and (y) the "issue and free transferability
of up to 20% of the Shares to and among persons who
are resident of Bermuda for exchange control
purposes", and
(B) pursuant to the requirements of Part III
of the Companies Act 1981 (the "Companies Act"), the
Company is required to file with the Registrar of
Companies a copy of the Prospectus signed by or on
behalf of all the Directors of the Company prior to
or as soon as reasonably practicable after
publication of the Prospectus;
(viii) The Shares to be sold and transferred to the
Underwriters under this Agreement have been duly authorized
and when delivered to the
19
Underwriters against payment therefor in accordance with the
terms of this Agreement will be validly issued, fully paid,
non-assessable shares of the Company and will be free of any
pre-emptive or similar rights;
(ix) The form of the certificate for the Shares
conforms with the requirements of Bermuda law;
(x) The execution, delivery and performance by the
Company of this Agreement and the transactions contemplated
hereunder including, without limitation, the issue of the
Shares to the Underwriters, do not and will not violate,
conflict with or constitute a default under (i) any
requirement of any law or any regulation of Bermuda or (ii)
the Company's Constitutional Documents;
(xi) The transactions contemplated by this Agreement
are not subject to any currency deposit or reserve
requirements in Bermuda; and each of the Company and Aspen
Bermuda has been designated as "non-resident" for the purposes
of the Exchange Control Act 1972 and regulations made
thereunder and there is no restriction or requirement of
Bermuda binding on the Company which limits the availability
or transfer of foreign exchange (i.e. monies denominated in
currencies other than Bermuda dollars) for the purposes of the
performance by the Company of its obligations under this
Agreement or for the payment by the Company of dividends or
other distributions to shareholders in respect of the Shares
or other securities of the Company or the payment by Aspen
Bermuda of dividends or other distributions to the Company;
(xii) The financial obligations of the Company under
this Agreement rank at least pari passu in priority of payment
with all other unsecured and unsubordinated indebtedness
(whether actual or contingent) issued, created or assumed by
the Company other than indebtedness which is preferred by
virtue of any provision of Bermuda law of general application;
(xiii) The choice of the laws of the State of New
York as the proper law to govern this Agreement is a valid
choice of law under Bermuda law and such choice of law would
be recognized, upheld and applied by the courts of Bermuda as
the proper law of this Agreement in proceedings brought before
them in relation to this Agreement, provided that (A) the
point is specifically pleaded; (B) such choice of law is valid
and binding under the laws of the State of New York; and (C)
recognition would not be contrary to public policy as that
term is understood under Bermuda law;
(xiv) The submission by the Company to the
jurisdiction of a New York Court pursuant to this Agreement is
not contrary to Bermuda law and would be recognized by the
courts of Bermuda as a legal, valid and binding submission to
the jurisdiction of such New York Court, if such submission is
accepted by such courts and is legal, valid and binding under
the laws of the State of New York;
(xv) The appointment by the Company of CT Corporation
System as agent for the receipt of any service of process in
respect of any New York Court in connection with any matter
arising out of or in connection with this Agreement is a valid
and effective appointment, if such appointment is valid and
binding
20
under the laws of the State of New York and if no other
procedural requirements are necessary in order to validate
such appointment;
(xvi) A final and conclusive judgment of a competent
foreign court against the Company based upon this Agreement
(other than a court of jurisdiction to which The Judgments
(Reciprocal Enforcement) Act, 1958 applies, and it does not
apply to New York Courts) under which a sum of money is
payable (not being a sum payable in respect of taxes or other
charges of a like nature, in respect of a fine or other
penalty, or in respect of multiple damages as defined in The
Protection of Trading Interests Act 1981) may be the subject
of enforcement proceedings in the Supreme Court of Bermuda
under the common law doctrine of obligation by action on the
debt evidenced by the judgment of such competent foreign
court. A final opinion as to the availability of this remedy
should be sought when the facts surrounding the foreign
court's judgment are known, but, on general principles, we
would expect such proceedings to be successful provided that:
(A) the court which gave the judgment was
competent to hear the action in accordance with
private international law principles as applied in
Bermuda; and
(B) the judgment is not contrary to public
policy in Bermuda, has not been obtained by fraud or
in proceedings contrary to natural justice and is not
based on an error in Bermuda law;
Enforcement of such a judgment against assets in
Bermuda may involve the conversion of the judgment debt into
Bermuda dollars, but the BMA has indicated that its present
policy is to give the consents necessary to enable recovery in
the currency of the obligation; no stamp duty or similar or
other tax or duty is payable in Bermuda on the enforcement of
a foreign judgment; and court fees will be payable in
connection with proceedings for enforcement;
(xvii) According to the records maintained in the
Register of Companies at the office of the Registrar of
Companies as revealed by such counsel's search of the Company
and Aspen Bermuda on ________, 2003 (the "Company Searches"),
the current address of the registered office of each of the
Company and Aspen Bermuda is Cannon's Court, 22 Victoria
Street, Hamilton HM 12, Bermuda;
(xviii) Neither the Company nor any of its assets or
property enjoys, under Bermuda law, immunity on the grounds of
sovereignty or otherwise from any legal or other proceedings
whatsoever or from enforcement, execution or attachment in
respect of its obligations under this Agreement;
(xix) Based solely upon the Company Searches and such
counsel's search of the Company and Aspen Bermuda in the
Supreme Court Causes Book maintained at the Registry of the
Supreme Court of Bermuda on ________, 2003, (A) no litigation,
arbitration or administrative or other proceeding of or before
any arbitrator or governmental authority of Bermuda is pending
against or affecting the Company or Aspen Bermuda or against
or affecting any of their respective
21
properties, rights, revenues or assets, and (B) no notice to
the Registrar of Companies of the passing of a resolution of
members or creditors of either the Company or Aspen Bermuda to
wind up said company, or the appointment of a liquidator or
receiver has been given, and no petition to wind up the
Company or Aspen Bermuda, or application to reorganize the
affairs of either the Company or Aspen Bermuda pursuant to a
scheme of arrangement or application for the appointment of a
receiver has been filed with the Supreme Court of Bermuda;
(xx) Each of the Company and Aspen Bermuda has
received an assurance from the Ministry of Finance granting an
exemption, until March 28, 2016, from the imposition of tax
under any applicable Bermuda law computed on profits or income
or computed on any capital asset, gain or appreciation, or any
tax in the nature of estate duty or inheritance tax, provided
that such exemption shall not prevent the application of any
such tax or duty to such persons as are ordinarily resident in
Bermuda and shall not prevent the application of any tax
payable in accordance with the provisions of the Land Tax Act
1967 or otherwise payable in relation to land in Bermuda
leased to the Company or Aspen Bermuda; there are, subject as
otherwise provided in this opinion, no capital gains, income,
withholding or other Bermuda taxes, stamp or issuance or
transfer taxes, recording, registration or documentary taxes,
duties or similar charges now due, or which could in the
future become due, including payable by or on behalf of the
Underwriters to Bermuda in connection with (A) the sale and
delivery by the Company of the Shares to or for the respective
accounts of the Underwriters or (B) the sale and delivery
outside Bermuda by the Underwriters of the Shares to the
initial purchasers thereof in the manner contemplated herein
or (C) the execution, delivery, performance or enforcement of
this Agreement or the transactions contemplated hereunder, or
in connection with the admissibility in evidence thereof; and
the Company is not required by any Bermuda law or regulation
to make any deductions or withholdings in Bermuda from any
payment it may make hereunder or the payment by the Company of
dividends or other distributions to shareholders in respect of
the Shares or other securities of the Company or the payment
by Aspen Bermuda of dividends or other distributions to the
Company;
(xxi) All dividends and other distributions declared
and payable on the shares of the share capital of the Company
may under the current laws and regulations of Bermuda be paid
in any currency other than Bermuda dollars, and all such
dividends and other distributions will not be subject to
withholding or other taxes under the laws and regulations of
Bermuda and are otherwise free and clear of any other tax,
withholding or deduction in Bermuda and without the necessity
of obtaining any Governmental Authorizations in Bermuda; and
Aspen Bermuda is (subject to the provisions of the Companies
Act 1981 of Bermuda) not currently prohibited by any Bermuda
law or Governmental Agency, directly or indirectly, from
paying any dividends to the Company, from making any other
distributions on its share capital, from repaying to the
Company any loans or advances to it from the Company or from
transferring any of its property or assets to the Company,
except as summarized in the Registration Statement;
22
(xxii) In order to ensure the legality, validity,
enforceability or admissibility in evidence of the Prospectus
or this Agreement, it is not necessary that any document be
filed, recorded or enrolled with any Bermuda Governmental
Agency or that any stamp duties, registration or similar tax
or charge be paid in Bermuda;
(xxiii) Charges over the assets of Bermuda companies
(other than real property in Bermuda or a ship or aircraft
registered in Bermuda) wherever situated, and charges on
assets situated in Bermuda (other than real property in
Bermuda or a ship or aircraft registered in Bermuda) which are
granted by or to companies incorporated outside Bermuda, are
capable of being registered in Bermuda in the office of the
Registrar of Companies pursuant to the provisions of Part V of
the Companies Act; registration under the Companies Act is the
only method of registration of charges over the assets of
Bermuda companies in Bermuda except charges over real property
in Bermuda or ships or aircraft registered in Bermuda;
registration under the Companies Act is not compulsory and
does not affect the validity or enforceability of a charge and
there is no time limit within which registration of a charge
must be effected, however, in the event that questions of
priority fall to be determined by reference to Bermuda law,
any charge registered pursuant to the Companies Act will take
priority over any other charge which is registered
subsequently in regard to the same assets, and over all other
charges created over such assets after July 1, 1983, which are
not registered; and such counsel has searched the Register of
Charges maintained by the Registrar of Companies in Bermuda
against the respective names of the Company and Aspen Bermuda,
which search has disclosed no charges over the shares or any
of the assets of the Company or Aspen Bermuda, it being
understood that registration of charges is not compulsory and
charges may exist over the shares or assets of the Company and
Aspen Bermuda without having been registered;
(xxiv) The statements contained in the Prospectus
under the captions "Risk Factors," "Dividend Policy,"
"Regulatory Matters--Bermuda Regulation", "Regulatory
Matters--Certain Other Bermuda Law Considerations," "Principal
Shareholders," "Material Tax Considerations--Taxation of Aspen
Holdings and Subsidiaries--Bermuda," "Material Tax
Considerations--Taxation of Shareholders--Bermuda Taxation"
and "Description of Share Capital" and "Enforceability of
Civil Liabilities under United States Federal Securities Laws
and Other Matters" insofar as they purport to describe the
provisions of the Constitutional Documents of the Company or
Aspen Bermuda or the laws of Bermuda referred to therein are
accurate and correct in all material respects;
(xxv) Under Bermuda law, the Underwriters will not be
deemed to be resident, domiciled, carrying on any commercial
activity in Bermuda or subject to any taxation in Bermuda by
reason only of the entry into, execution, delivery,
performance or enforcement of this Agreement or the
transactions contemplated hereby; and it is not necessary
under Bermuda law that the Underwriters be authorized,
licensed, qualified or otherwise entitled to carry on business
in Bermuda for their execution, delivery, performance or
enforcement of this Agreement; and
23
(xxvi) The consummation of the transactions
contemplated by this Agreement (including but not limited to
the issue and sale of the Shares by the Company and any
actions taken pursuant to the indemnification and contribution
provisions contained in this Agreement) will not, subject to
Section 39A(2A) of the Companies Act, constitute unlawful
financial assistance by the Company under Bermuda law.
(e) LeBoeuf, Lamb, Greene & MacRae, L.L.P., U.K. counsel for
the Company satisfactory to you, shall have furnished to you their
written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) Each of the U.K. Subsidiaries is validly existing
in the United Kingdom as a limited liability company under the
Companies Act 1985 with corporate power to own, lease and
operate its properties and to conduct its business as
described in the Prospectus;
(ii) All of the issued share capital of the U.K.
Subsidiaries is fully paid and is owned directly or indirectly
by the Company;
(iii) Each of the U.K. Subsidiaries has all material
permits, licenses and authorizations necessary under the laws,
rules and regulations of the United Kingdom, including in the
case of Aspen U.K. being duly authorized by the U.K. Financial
Services Authority, to conduct its business as described in
the Prospectus;
(iv) The issue and sale of the Shares to be sold by
the Company hereunder, the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions herein contemplated will not result in any
violation of the provisions of any Constitutional Document of
the U.K. Subsidiaries, conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any agreement or instrument set forth on
Schedule I(b); and
(v) The statements set forth in the Prospectus under
the captions "Risk Factors," "Regulatory Matters--U.K.
Regulation," and "Material Tax Considerations--Taxation of
Aspen Holdings and Subsidiaries--United Kingdom," insofar as
they purport to describe the provisions of the documents and
the laws of the United Kingdom referred to therein, fairly
summarize such provisions or documents in all material
respects.
In rendering the opinion in subsection (v) of this
Section 7(e), such counsel need not express any opinion,
however, as to whether or not the execution, delivery or
performance by the Company of this Agreement will constitute a
violation of, or a default under, any covenant, restriction or
provision with respect to financial ratios or tests or any
aspect of the financial condition or results of operations of
the Company or any of its subsidiaries.
(f) On the date of the Prospectus of a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, KPMG Audit Plc shall have furnished to you a
letter
24
or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to the Lead Representatives;
(g) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business (exclusive of reinsurance treaties and insurance policies
covering third-party risks) from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock, capital or
surplus or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of the Lead Representatives so material
and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in
the Prospectus;
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the financial strength or claims paying
ability of the Company or any of the Designated Subsidiaries by any
"nationally recognized statistical rating organization," as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of the financial strength or claims paying
ability of the Company or any of the Designated Subsidiaries; and no
such organization currently rates any securities of the Company or any
of its subsidiaries;
(i) On or after the date hereof, there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the NYSE; (ii) a suspension or
material limitation in trading in the Company's securities on the NYSE;
(iii) a general moratorium on commercial banking activities in New
York, London or Bermuda declared by the relevant authorities, or a
material disruption in commercial banking or securities settlement or
clearance services in the United States, the United Kingdom or Bermuda;
(iv) a change or development involving a prospective change in Bermuda
taxation affecting the Company, the Shares or the transfer thereof; (v)
the outbreak or escalation of hostilities involving the United States,
the United Kingdom or Bermuda or the declaration by the United States,
the United Kingdom or Bermuda of a national emergency or war or (vi)
the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States, the
United Kingdom, Bermuda or elsewhere, if the effect of any such event
specified in clause (v) or (vi) in the judgment of the Lead
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in
the Prospectus;
(j) The Shares to be sold by the Company at such Time of
Delivery shall have been duly listed, subject to notice of issuance, on
the NYSE;
25
(k) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
(l) The Company shall have furnished or caused to be furnished
to you at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of their respective
obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request,
and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (h) of
this Section, and as to such other matters as you may reasonably
request; and
(m) The "lock-up" agreements, each substantially in the form
of Annex I hereto, from certain shareholders, officers and directors of
the Company relating to sales and certain other dispositions of shares
of Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Lead Representatives expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the Lead
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company
26
in connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
respective proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
27
the Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this subsection
(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) The Company will indemnify and hold harmless Goldman, Sachs &
Co., in its capacity as QIU, against any losses, claims, damages or liabilities,
joint or several, to which the QIU may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or omission to act or any alleged act or
omission to act by Goldman, Sachs & Co. as QIU in connection with any
transaction contemplated by this Agreement or undertaken in preparing for the
purchase, sale and delivery of the Shares, except as to this clause (iii) to the
extent that any such loss, claim, damage or liability results from the gross
negligence or bad faith of Goldman, Sachs & Co. in performing the services as
QIU, and will reimburse the QIU for any legal or other expenses reasonably
incurred by the QIU in connection with investigating or defending any such
action or claim as such expenses are incurred.
(b) Promptly after receipt by the QIU under subsection (a) above of
notice of the commencement of any action, the QIU shall, if a claim in respect
thereof is to be made against the Company under such subsection, notify the
Company in writing of the commencement
28
thereof; but the omission so to notify the Company shall not relieve it from any
liability which it may have to the QIU otherwise than under such subsection. In
case any such action shall be brought against the QIU and it shall notify the
Company of the commencement thereof, the Company shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to the QIU (who shall not, except with the consent of the
QIU, be counsel to the Company), and, after notice from the indemnifying party
to the QIU of its election so to assume the defense thereof, the indemnifying
party shall not be liable to the QIU under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by the QIU, in connection with the defense thereof other than
reasonable costs of investigation. The Company shall not, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the QIU is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the QIU from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of QIU.
(c) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless Goldman, Sachs & Co., in its
capacity as QIU, under subsection (a) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
the Company shall contribute to the amount paid or payable by the QIU as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the QIU on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the QIU failed to
give the notice required under subsection (b) above, then the Company shall
contribute to such amount paid or payable by the QIU in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the QIU on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the QIU on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company, as set forth in the table on the cover page of the Prospectus,
bear to the fee payable to the QIU pursuant to Section 2 hereof. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the QIU on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the QIU agree that it would not be just
and equitable if contributions pursuant to this subsection (c) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(c). The amount paid or payable by the QIU as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (c) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f)
29
of the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
(d) The obligations of the Company under this Section 9 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the QIU
within the meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notify you that they
have so arranged for the purchase of such Shares, you or the Company shall have
the right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
of the Shares to be purchased at such Time of Delivery, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the number
of Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Sections 8 and 9 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
30
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, or any
controlling person, and shall survive delivery of and payment for the Shares.
12. If this Agreement shall be terminated pursuant to Section 10
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6, 8 and 9 hereof; but, if for any other reason
any Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter in respect of the
Shares not so delivered except as provided in Sections 6, 8 and 9 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by the Lead Representatives on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Lead Representatives in care of (i) Credit
Suisse First Boston LLC, Eleven Madison Avenue, New York, New York 10010,
Attention: Transactions Advisory Group and (ii) Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration Department; and if to
the Company shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company set forth in the Registration Statement,
Attention: Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8, 9 and 11 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
15. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York Court, (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such New York Court in any such
31
suit, action or proceeding. The Company irrevocably waives any immunity to
jurisdiction to which it may otherwise be entitled or become entitled (including
sovereign immunity, immunity to pre-judgment attachment, post-judgment
attachment and execution) in any legal suit, action or proceeding against it
arising out of or based on this Agreement or the transactions contemplated
hereby which is instituted in any New York Court or in any competent court in
Bermuda. The Company has appointed CT Corporation System, New York, New York, as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any such action arising out of or based on this Agreement or the transactions
contemplated hereby which may be instituted in any New York Court by any
Underwriter or by any person who controls any Underwriter, expressly consents to
the jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. The Company represents and
warrants that the Authorized Agent has agreed to act as such agent for service
at process and agrees to take any and all action, including the filing of any
and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company shall be
deemed, in every respect, effective service of process upon the Company.
16. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the party against whom such judgment or order
has been given or made will indemnify each party in whose favor such judgment or
order has been given or made (the "Indemnitee") against any loss incurred by the
Indemnitee as a result of any variation as between (i) the rate of exchange at
which the United States dollar amount is converted into the judgment currency
for the purpose of such judgment or order and (ii) the rate of exchange at which
the Indemnitee is able to purchase United States dollars with the amount of the
judgment currency actually received by such Indemnitee. The foregoing indemnity
shall constitute a separate and independent obligation of each of the Company
and the Underwriters and shall continue in full force and effect notwithstanding
any such judgment or order as aforesaid. The term "rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of or conversion into United States dollars.
17. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
18. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
19. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
20. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without the Underwriters imposing any
limitation of any kind.
32
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
Aspen Insurance Holdings Limited
By: ________________________________
Name:
Title:
Accepted as of the date hereof:
Credit Suisse First Boston LLC
Goldman, Sachs & Co.
Deutsche Bank Securities Inc.
UBS Securities LLC
Dowling & Partners Securities, LLC
Fox-Pitt, Kelton Inc.
Keefe, Bruyette & Woods, Inc.
By:
------------------------------------------------------
(Credit Suisse First Boston LLC)
By:
------------------------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE A
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- ---------------- -------------------
Credit Suisse First Boston LLC .................................
Goldman, Sachs & Co.............................................
Deutsche Bank Securities Inc....................................
UBS Securities LLC..............................................
Dowling & Partners Securities, LLC..............................
Fox-Pitt, Kelton Inc............................................
Keefe, Bruyette & Woods, Inc. ..................................
---------------- -------------------
Total............................................. ================ ===================
SCHEDULE I(a)
1. Third Amended and Restated Registration Rights Agreement dated as of
November 14, 2003 among the Company and each of the persons listed on
Schedule 1 thereto
2. Three-Year Credit Agreement dated as of August 26, 2003 among the Company,
Barclays Bank plc and the Lenders named therein
3. 364-Day Credit Agreement dated as of August 26, 2003 among the Company,
Barclays Bank plc and the Lenders named therein
SCHEDULE I(b)
1. Option Instrument for Non-Voting Ordinary Shares
2. Amended and Restated Shareholders Agreement, dated as of September 30, 2003
among the Registrant and each of the persons listed on Schedule A thereto
3. Management Services Contract dated June 21, 2002 between Christopher O'Kane
and Aspen Insurance U.K. Services Limited
4. Management Services Contract dated June 21, 2002 between Sarah Davies and
Aspen Insurance UK Services Limited
5. Management Services Contract dated June 21, 2002 between David May and
Aspen Insurance UK Services Limited
6. Quota Share Agreement between Syndicate 3030 and Aspen Insurance UK
Limited, dated October 21, 2003 reflecting the slip agreement entered into
on June 12, 2002
7. Qualifying Quota Share Agreement between Wellington Underwriting, Syndicate
2020 and Aspen Insurance UK Limited dated April 15, 2003
8. Property Risk Excess of Loss Reinsurance Quota Share Treaty between Aspen
Insurance UK Limited and Montpelier Reinsurance Ltd., dated June 20, 2002
9. Quota Share Treaty of Wellington Underwriting Inc. Property Business
between Aspen Insurance UK Limited and Montpelier Reinsurance Ltd., dated
June 20, 2002
10. Quota Share Treaty of Wellington Inc. Auto Liability Business between Aspen
Insurance UK Limited and Montpelier Reinsurance Ltd., dated June 20, 2002
ANNEX I
FORM OF LOCK-UP AGREEMENT
ASPEN INSURANCE HOLDINGS LIMITED
LOCK-UP AGREEMENT
[ ], 2003
Credit Suisse First Boston LLC
Goldman, Sachs & Co.
Deutsche Bank Securities Inc.
UBS Securities LLC
Dowling & Partners Securities, LLC
Fox-Pitt, Kelton Inc.
Keefe, Bruyette & Woods, Inc.
c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, NY 10010
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Re: Aspen Insurance Holdings Limited - Lock-Up Agreement
----------------------------------------------------
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") on behalf of the several Underwriters named in
Schedule I to such agreement (collectively, the "Underwriters"), with Aspen
Insurance Holdings Limited, a Bermuda company (the "Company"), providing for a
public offering (the "Public Offering") of the ordinary shares of the Company
(the "Shares") pursuant to a Registration Statement on Form F-1 to be filed with
the Securities and Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell
the Shares in the Public Offering pursuant to the Underwriting Agreement, and of
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the undersigned agrees that, during the period beginning
from the date of the final Prospectus covering the Public Offering and
continuing to and including the date 180 days after the date of such final
Prospectus, the undersigned will not offer, sell, contract to sell, pledge,
grant any option to purchase, make any short sale or otherwise dispose of any
ordinary shares of the Company ("Ordinary Shares"), or any options or warrants
to purchase any Ordinary Shares, or any securities convertible into,
exchangeable for or that represent the right to receive Ordinary Shares, whether
now owned or hereinafter acquired, owned directly by the undersigned (including
holding as a custodian) or with respect to which the undersigned has beneficial
ownership within the rules and regulations of the SEC (collectively the
"Undersigned's Shares").
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if the Undersigned's Shares would
be disposed of by someone other than the undersigned. Such prohibited hedging or
other transactions would include without limitation any short sale or any
purchase, sale or grant of any right (including without limitation any put or
call option) with respect to any of the Undersigned's Shares or with respect to
any security that includes, relates to, or derives any significant part of its
value from the Undersigned's Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned,
provided that the trustee of the trust agrees to be bound in writing by the
restrictions set forth herein, and provided further that any such transfer shall
not involve a disposition for value, (iii) to an affiliate (as defined in Rule
405 under the United States Securities Act of 1933, as amended) of the
undersigned, provided that the affiliate agrees to be bound in writing by the
restrictions set forth herein or (iv) with the prior written consent of Credit
Suisse First Boston LLC and Goldman, Sachs & Co. on behalf of the Underwriters.
The undersigned is, and, except as contemplated by clause (i), (ii), (iii) or
(iv) above, for the duration of this Lock-Up Agreement will be, the registered
holder of the Undersigned's Shares, free and clear of all liens, encumbrances,
and claims whatsoever. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent and registrar
against the transfer of the Undersigned's Shares except in compliance with the
foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
----------------------------------------
Exact Name of Shareholder
----------------------------------------
Authorized Signature
----------------------------------------
Title
2