EXECUTION COPY
5,000,000 Hybrid Capital Units
SCOTTISH RE GROUP LIMITED
UNDERWRITING AGREEMENT
December 11, 2003
BEAR, STEARNS & CO. INC.
as representatives of the
several Underwriters named in
Schedule I attached hereto (the "Representatives")
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
Scottish Re Group Limited, an exempted company limited by shares
organized and existing under the laws of the Cayman Islands (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several underwriters named in Schedule I hereto (the "Underwriters")
5,000,000 of the Company's 5.875% Hybrid Capital Units (the "Firm Units"),
subject to the terms and conditions set forth herein. In addition, the Company
has granted to the Underwriters an option described in Section 2(d) hereof to
purchase up to an additional 750,000 of the Company's 5.875% Hybrid Capital
Units (the "Optional Units" and, together with the Firm Units, the "Units").
Each Unit will initially consist of a unit (a "Hybrid Capital Unit") comprised
of: (a) a share purchase contract (a "Purchase Contract") under which (i) the
holder will purchase from the Company no later than February 15, 2007, for $25,
a number of ordinary shares, par value $0.01 per share, of the Company (the
"Ordinary Shares"), equal to the Settlement Rate as set forth in the Purchase
Contract Agreement (as hereinafter defined) and (ii) the Company will pay to the
holder contract adjustment payments as set forth in the Purchase Contract; and
(b) a share of the Company's Convertible Preferred Shares, par value $0.01 per
share, issue price $25 per share, liquidation preference $25 per share,
convertible into Ordinary Shares at an initial conversion rate of 1.0607
Ordinary Shares per $25 principal amount of Preferred Shares, subject to
adjustment (the "Preferred Shares"). In accordance with the terms of a Purchase
Contract Agreement (the "Purchase Contract Agreement") to be entered into
between the Company and JPMorgan Chase Bank, as Purchase Contract Agent (the
"Purchase Contract Agent"), the holders of the Units will pledge the Preferred
Shares to JPMorgan Chase Bank, as Collateral Agent (the "Collateral Agent"),
pursuant to a Pledge
Agreement (the "Pledge Agreement") to be entered into among the Company, the
Purchase Contract Agent and the Collateral Agent, to secure the holders'
obligations to purchase Ordinary Shares under the Purchase Contracts. The Units
are more fully described in the Prospectus referred to below. This is to confirm
the agreement concerning the purchase of the Units from the Company by the
Underwriters. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Prospectus. Bear, Stearns & Co. Inc.
("Bear Stearns") is acting as lead manager (the "Lead Manager") in connection
with the offering and sale of the Units contemplated herein (the "Offering").
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-104545), and amendments thereto, and related preliminary prospectuses for
the registration under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the registration of certain securities (the "Shelf
Securities") of the Company to be sold from time to time by the Company. Such
registration statement, as so amended (including post-effective amendments, if
any), has been declared effective by the Commission and copies of which have
heretofore been delivered to the Underwriters. The registration statement, as
amended at the time it became effective, is hereinafter referred to as the
"Registration Statement." If the Company has filed or is required pursuant to
the terms hereof to file a registration statement pursuant to Rule 462(b) under
the Securities Act registering additional Units (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which
became effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. All of the Units have
been registered under the Securities Act pursuant to the Registration Statement
or, if any Rule 462(b) Registration Statement is filed, will be duly registered
under the Securities Act with the filing of such Rule 462(b) Registration
Statement. No stop order suspending the effectiveness of either the Registration
Statement 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. The Company, if required by the Securities Act and rules and
regulations of the Commission (together, the "Rules and Regulations"), proposes
to file a prospectus supplement with the Commission pursuant to Rule 424(b) of
the Rules and Regulations. The prospectus supplement specifically relating to
the Units, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations (the "Prospectus Supplement"), along
with the basic prospectus included in the Registration Statement at the time it
became effective (the "Basic Prospectus"), is hereinafter referred to as the
"Prospectus," except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the Offering which differs from the Prospectus
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(whether or not such revised prospectus or prospectus supplement is required to
be filed by the Company pursuant to Rule 424(b) of the Rules and Regulations),
the term "Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided to
the Underwriters for such use. Any preliminary prospectus supplement or
prospectus supplement subject to completion included in the Registration
Statement or filed with the Commission pursuant to Rule 424 under the Securities
Act specifically relating to the Units together with the Basic Prospectus is
hereafter called a "Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") on or before the effective date of
the Registration Statement, the date of such Preliminary Prospectus or the date
of the Prospectus, as the case may be, and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such Preliminary
Prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing, shall be deemed to include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR").
(b) At the time of the effectiveness of the Registration
Statement, any 462(b) Registration Statement or the effectiveness of any
post-effective amendment to the Registration Statement, when the Prospectus is
first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, when any supplement to or amendment of the Prospectus is filed with
the Commission, when any document filed under the Exchange Act was or is filed
and at the Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto complied or will comply in all
material respects with the applicable provisions of the Securities Act, the
Exchange Act and the Rules and Regulations and did not and will not contain an
untrue statement of a material fact and did not or will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein (i) in the case of the Registration Statement, not misleading
and (ii) in the case of the Prospectus or any related Preliminary Prospectus in
light of the circumstances under which they were made, not misleading. When any
related Preliminary Prospectus was first filed with the Commission (whether
filed as part of the registration statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Rules and
Regulations) and when any amendment thereof or supplement thereto was first
filed with the Commission, such Preliminary Prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of
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the Securities Act and the Rules and Regulations and the Exchange Act and the
respective rules and regulations thereunder and did not contain an untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances under which they were made not misleading.
No representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or Preliminary Prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through
the Lead Manager specifically for use therein. The parties acknowledge and agree
that the information provided by or on behalf of any Underwriter consists solely
of paragraphs 3, 12 and 13 under the caption "Underwriting" in the Prospectus.
(c) The Ordinary Shares to be issued and sold by the Company
pursuant to the Purchase Contracts and upon redemption of the Preferred Shares
have been duly and validly authorized and reserved for issuance and, when issued
and delivered in accordance with the provisions of the Purchase Contracts and
the Preferred Shares, will be duly and validly issued, fully paid and
non-assessable and will not be subject to any preemptive rights of any person.
No shareholder consents are required in connection with the Company's issuance
and sale of the Preferred Shares or the Ordinary Shares to be issued and sold by
the Company pursuant to the Purchase Contracts or upon conversion of the
Preferred Shares.
(d) The Hybrid Capital Units have been duly authorized by the
Company, and when duly executed by the Company (assuming due execution by the
Purchase Contract Agent as attorney-in-fact for the holders thereof and due
authentication by the Purchase Contract Agent) and delivered by the Company and
upon payment therefor as set forth herein, will be duly and validly issued and
outstanding, and will constitute valid and binding obligations of the Company
entitled to the benefits of the Purchase Contract Agreement and enforceable
against the Company in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is considered in
a proceeding in equity or at law) (the "Bankruptcy Exceptions") and an implied
covenant of good faith and fair dealing.
(e) The Preferred Shares have been duly authorized by the
Company and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid as to their stated price of
$25 per share and non-assessable and will not be subject to any preemptive
rights of any person.
(f) The Purchase Contract Agreement has been duly authorized
by the Company and, when duly executed by the proper officers of the
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Company (assuming due execution and delivery by the Purchase Contract Agent) and
delivered by the Company, will constitute a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by the Bankruptcy Exceptions and an
implied covenant of good faith and fair dealing.
(g) The Pledge Agreement has been duly authorized by the
Company and, when duly executed by the proper officers of the Company (assuming
due execution and delivery by the Purchase Contract Agent and the Collateral
Agent) and delivered by the Company, will constitute a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited by the Bankruptcy
Exceptions and an implied covenant of good faith and fair dealing.
(h) The Remarketing Agreement (the "Remarketing Agreement") to
be entered into by the Company and Bear Stearns, as Remarketing Agent, has been
duly authorized by the Company and, when executed and delivered by the Company,
will constitute a valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, except as the enforcement thereof may
be limited by the Bankruptcy Exceptions and an implied covenant of good faith
and fair dealing.
(i) Ernst & Young LLP, who have certified the financial
statements and supporting schedules of the Company included or incorporated in
the Registration Statement, are independent public accountants as required by
the Securities Act, the Exchange Act and the Rules and Regulations.
(j) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, the Company has not paid any
dividends on any class of its share capital and there has been no material
adverse change or any development involving a prospective material adverse
change on (i) the business, prospects, properties, operations, condition
(financial or other), stockholders' equity or results of operations of the
Company and each subsidiary of the Company (each, a "Subsidiary" and together,
the "Subsidiaries"), taken as a whole; (ii) the share capital or long-term debt
of the Company; (iii) the Offering; or (iv) the consummation of the transactions
contemplated by this Agreement, the Purchase Contract Agreement, the Pledge
Agreement and the Remarketing Agreement or the Company's performance of its
obligations hereunder (a "Material Adverse Change" or "Material Adverse
Effect"), whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet presented in the
Registration Statement and the Prospectus, neither the Company nor any of the
Subsidiaries has incurred or undertaken any liabilities or obligations, direct
or contingent, or entered into any transactions which
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are material to the Company and the Subsidiaries taken as a whole, except for
liabilities or obligations which are reflected in the Registration Statement and
the Prospectus.
(k) The Company has the corporate power and authority to
execute and deliver this Agreement, the Purchase Contract Agreement, the Pledge
Agreement and the Remarketing Agreement to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated by this Agreement,
the Purchase Contract Agreement, the Pledge Agreement, the Remarketing
Agreement, the Registration Statement and the Prospectus. This Agreement, the
Purchase Contract Agreement, the Pledge Agreement and the Remarketing Agreement
and the transactions contemplated by this Agreement, the Purchase Contract
Agreement, the Pledge Agreement, the Remarketing Agreement, the Registration
Statement and the Prospectus have been duly and validly authorized by the
Company. This Agreement has been duly and validly executed and delivered by the
Company.
(l) The execution, delivery and performance of this Agreement,
the Purchase Contract Agreement, the Pledge Agreement and the Remarketing
Agreement and the consummation of the transactions contemplated by this
Agreement, the Purchase Contract Agreement, the Pledge Agreement, the
Remarketing Agreement, the Registration Statement and the Prospectus do not and
will not (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of the Subsidiaries pursuant to any indenture, mortgage, deed
of trust, loan agreement or other agreement, instrument, franchise, license or
permit to which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or their respective properties or assets
may be bound or (ii) violate or conflict with any provision of the memorandum of
association, articles of association, certificate or articles of incorporation,
charter, by-laws or other organizational documents of the Company or any of the
Subsidiaries or any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties, operations or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets is required to be made or obtained by the
Company for the execution, delivery and performance of this Agreement, the
Purchase Contract Agreement, the Pledge Agreement and the Remarketing Agreement
or the consummation of the transactions contemplated hereby or thereby, by the
Registration Statement and by the Prospectus, including the issuance, sale and
delivery of the Units to be issued, sold and delivered by the Company hereunder,
except (A) the registration under the Securities Act of the Units, the Preferred
Shares and the Ordinary Shares, which has become effective, and (B) such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be
6
required under state securities, Blue Sky or insurance securities laws or the
rules of the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution of the Units by the Underwriters.
(m) The Company has the authorized capital set forth in the
Prospectus and all of the issued share capital of the Company has been duly and
validly authorized and issued in compliance with all applicable state, federal
and foreign securities laws, is fully paid and non-assessable and has not been
issued in violation of or subject to any preemptive or similar rights that
entitle or will entitle any person to acquire any such share capital or any
security convertible, exchangeable or exercisable into such share capital from
the Company upon issuance or sale by the Company of Units in the Offering,
except for such rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement; the Units to be delivered on the
Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), have been duly and validly authorized and, when delivered
by the Company in accordance with this Agreement, will be duly and validly
issued, fully paid and non-assessable and will have been issued in compliance
with all applicable state, federal and foreign securities laws and will not have
been issued in violation of or subject to any preemptive or similar rights that
entitle or will entitle any person to acquire any Units, Preferred Shares or
Ordinary Shares to be issued in connection therewith from the Company upon
issuance thereof by the Company; and all of the issued share capital of each of
its Subsidiaries has been duly and validly authorized and issued and is fully
paid and non-assessable and is owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims; the Ordinary Shares,
the Preferred Shares, the Purchase Contracts and the Units conform to the
descriptions thereof contained or incorporated by reference in the Registration
Statement and the Prospectus.
(n) The only subsidiaries (as defined in Rule 405 of the
Securities Act) of the Company are those listed on Schedule III attached hereto.
Each of the Company and the Subsidiaries has been duly organized and is validly
existing as a corporation or a company limited by shares in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not in the aggregate have a Material
Adverse Effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and the Subsidiaries taken as a
whole. Each of the Company and the Subsidiaries has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits (collectively, the
"Consents") of and from all public, regulatory or governmental agencies and
bodies, to own, lease and operate its properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus, with such exceptions as would not have, individually or in the
aggregate a Material
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Adverse Effect. No Consent contains a materially burdensome restriction not
adequately disclosed in the Registration Statement and the Prospectus.
(o) Each of the Company and the Subsidiaries which is engaged
in the business of insurance or reinsurance (each, an "Insurance Subsidiary" and
together, the "Insurance Subsidiaries") holds such insurance license,
certificates and permits from governmental authorities (including, without
limitation, from the insurance regulatory agencies of the various jurisdictions
where it conducts business) (the "Insurance Licenses") as are necessary to the
conduct of its business as described in the Prospectus; the Company and each
Insurance Subsidiary have fulfilled and performed all obligations necessary to
maintain the Insurance Licenses; there is no pending or, to the knowledge of the
Company after due inquiry, threatened action, suit, proceeding or investigation
that could reasonably be expected to result in the revocation, termination or
suspension of any Insurance License; and no insurance regulatory agency or body
has issued, or to our knowledge, commenced any proceeding for the issuance of,
any order or decree impairing, restricting or prohibiting the payment of
dividends or the making of any loan by any Subsidiary to its parent, which would
have, individually or in the aggregate, a Material Adverse Effect.
(p) All reinsurance treaties and arrangements to which the
Company or any Subsidiary is a party as a cedant are in full force and effect;
neither the Company nor any Subsidiary is in material violation of or in
material default in the performance, observance or fulfillment of any
obligation, agreement, covenant or condition contained therein; neither the
Company nor any Subsidiary has received any notice from any of the other parties
to such treaties or arrangements that such other party intends not to perform
such treaty; and, to the best knowledge of the Company and the Subsidiaries, the
Company and the Subsidiaries have no reason to believe that any of the other
parties to such treaties or arrangements will be unable to perform such treaty
or arrangement except to the extent adequately and properly reserved for in the
consolidated financial statements of the Company included in the Prospectus.
(q) The 2002 statutory annual statements of each of the
Insurance Subsidiaries required to prepare such statements and the statutory
balance sheets and income statements included in such statutory annual
statements together with related schedules and notes, have been prepared, in all
material respects, in conformity with statutory accounting principles or
practices required or permitted by the appropriate insurance department of the
jurisdiction of domicile of each such Insurance Subsidiary, and such statutory
accounting practices have been applied on a consistent basis throughout the
periods involved, except as may otherwise be indicated therein or in the notes
thereto, and present fairly, in all material respects, the statutory financial
position of the Insurance Subsidiaries as of the dates thereof, and the
statutory basis results of operations of the Insurance Subsidiaries for the
periods covered thereby.
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(r) The Company and the Insurance Subsidiaries have made no
material changes in their insurance reserving practices since December 31, 2002,
except where such change in such insurance reserving practices would not
reasonably be expected to have a Material Adverse Effect.
(s) The Company is not aware of any threatened or pending
downgrading of any Insurance Subsidiary's financial strength rating from A.M.
Best Company, Inc., Standard & Poor's Rating Services, Inc., Moody's Investor
Services or Fitch Ratings (collectively, the "Rating Agencies").
(t) Except as described in the Registration Statement and the
Prospectus, there is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation, or arbitration, including routine
litigation, to which the Company or any of the Subsidiaries is a party or of
which any property of the Company or any of the Subsidiaries is the subject
which, individually or in the aggregate, if determined adversely to the Company
or any of the Subsidiaries, is reasonably likely to have a Material Adverse
Effect, and to the best of the Company's knowledge, no such proceeding is
threatened or contemplated by governmental authorities or threatened or
contemplated by others.
(u) Neither the Company nor its Subsidiaries nor to the
Company's knowledge, any of its affiliates has taken, nor will any of them take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Units to facilitate the sale
or resale of the Units.
(v) Except for the Subsidiaries or as otherwise set forth in
the Prospectus, the Company owns no capital stock, ordinary shares or other
beneficial interest, directly or indirectly, in any corporation, partnership,
joint venture or other business entity.
(w) The financial statements of the Company, including the
notes thereto, and supporting schedules included or incorporated by reference in
the Registration Statement and the Prospectus present fairly in all material
respects the financial position of the Company and its consolidated subsidiaries
and the other entities for which financial statements are included in the
Registration Statement and the Prospectus as of the dates indicated and
condition and results of operations for the periods specified; except as
otherwise stated in the Registration Statement, said financial statements have
been prepared in conformity with U.S. generally accepted accounting principles
("GAAP") in all material respects applied on a consistent basis throughout the
periods involved; and the supporting schedules included in the Registration
Statement present fairly in all material respects the information required to be
stated therein. No other financial statements or supporting schedules are
required to be included in the Registration Statement or Prospectus. The other
financial and statistical information and data relating to the Company and its
consolidated subsidiaries included in the
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Registration Statement and the Prospectus present fairly in all material
respects the information included therein and have been prepared on a basis
consistent with that of the financial statements included or incorporated by
reference in the Registration Statement and the Prospectus and the books and
records of the respective entities presented therein.
(x) Except as disclosed in the Registration Statement and
Prospectus, no holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the Units
contemplated hereby, and any such rights so disclosed have been effectively
waived by the holders thereof.
(y) The Company is not, and upon consummation of the
transactions contemplated hereby, and at all times up to and including the
application of net proceeds as described in the Prospectus, will not be, subject
to registration as an "investment company" under the Investment Company Act of
1940.
(z) Any real property and buildings held under lease or
sublease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and the Subsidiaries. Neither the Company nor any of
the Subsidiaries has received any notice of any claim adverse to their ownership
of any real or personal property or of any claim against the continued
possession of any real property, whether owned or held under lease or sublease
by the Company or any of the Subsidiaries.
(aa) The Company and each of the Subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by each of them and have paid or made provision for the
payment of all taxes, assessments, governmental or other similar charges,
including without limitation, all sales and use taxes and all taxes which the
Company and each of the Subsidiaries are obligated to withhold from amounts
owing to employees, creditors and third parties, with respect to the periods
covered by such tax returns (whether or not such amounts are shown as due on any
tax return), except in any case where the failure to file any such return or to
make any such provision, individually or in the aggregate, would not have a
Material Adverse Effect. No deficiency assessment with respect to a proposed
adjustment of the Company's or any of the Subsidiaries' federal, state, or other
taxes is pending or, to the best of the Company's knowledge, threatened, except
in the case of a deficiency assessment the payment of which would not have a
Material Adverse Effect. There is no 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 the Subsidiaries.
(bb) As of the date hereof and on the Closing Date, the
Company and its Subsidiaries expect to engage predominantly in traditional
insurance and reinsurance activities that involve substantial transfer of
insurance or annuity risks, and intend to operate in a manner that they will not
(1) engage in certain nontraditional
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insurance or reinsurance activities that do not involve a sufficient amount of
risk transfer or (2) maintain financial reserves in excess of the reasonable
needs of the insurance business of the Company and its Subsidiaries, either of
which would cause the insurance company exception to the passive foreign
investment company rules described in Section 1297 of the Internal Revenue Code
of 1986, as amended from time to time (the "Code") not to apply to the Company
or its Subsidiaries.
(cc) The Ordinary Shares are registered pursuant to Section
12(b) of the Exchange Act and the outstanding Ordinary Shares are listed on the
New York Stock Exchange, Inc. (the "NYSE"), and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Ordinary Shares under the Exchange Act or de-listing the Ordinary Shares
from the NYSE, nor has the Company received any notification that the Commission
or the NYSE is contemplating terminating such registration or listing.
(dd) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(ee) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all respects with the
requirements of the Securities Act, the Exchange Act, the Rules and Regulations
and the rules and regulations of the Commission under the Exchange Act, and,
when read together with the other information in the Prospectus, at the time the
Registration Statement became effective, did not and, at the Closing Date, will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(ff) Except as disclosed in the Registration Statement and
Prospectus, the Company and the Subsidiaries have no (i) significant
deficiencies in the design or operation of internal controls which could
adversely affect their ability to record, process, summarize and report
financial data and have identified for Ernst & Young LLP any material weaknesses
in internal controls; (ii) instances of fraud, whether or not material, that
involve management or other employees who have a significant role in their
internal controls; or (iii) significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to March
31, 2003, including any corrective actions with regard to significant
deficiencies and material weaknesses.
(gg) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company, on the one hand, and
any director, officer, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the Securities
Act, the Exchange Act or the Rules and Regulations to be described in the
Registration Statement or the Prospectus which is not so described and described
as required. There are no outstanding
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loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any of their
respective family members, except as disclosed in the Registration Statement and
the Prospectus. The Company has not, in violation of Section 13(k) of the
Exchange Act, directly or indirectly, including through a Subsidiary (other than
as permitted under such section for depositary institutions), extended or
maintained credit, arranged for the extension of credit, or renewed an extension
of credit, in the form of a personal loan to or for any director or executive
officer of the Company.
(hh) The audit committee of the Company's Board of Directors
complies with the current independence requirements of the NYSE, applicable to
the Company.
(ii) Except as disclosed in the Registration Statement and the
Prospectus, there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus or, to the Company's knowledge, any
arrangements, agreements, understandings, payments or issuance with respect to
the Company or any of its officers, directors, employees or Subsidiaries that
may affect the Underwriters' compensation as determined by the NASD.
(jj) Neither the Company, any Subsidiary nor, to the Company's
knowledge, any of its employees or agents has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States of any jurisdiction
thereof.
(kk) There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described in
the Prospectus or filed as exhibits to the Registration Statement or the
Prospectus by the Securities Act or by the Rules and Regulations and which have
not been so described or filed.
(ll) Neither the Company nor any of the Subsidiaries (i) is in
violation of its memorandum of association, articles of association, certificate
or articles of incorporation, charter or by-laws, (ii) is in default (and no
event has occurred which, with notice or lapse of time or both, would constitute
such a default) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any indenture, mortgage, deed of
12
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any statute or any judgment, decree,
order, rule or regulation of any court or governmental or regulatory agency or
body having jurisdiction over the Company or any of the Subsidiaries or any of
their properties or assets, except in the case of (iii), any violation or
default that would not have a Material Adverse Effect on the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and the Subsidiaries taken as a whole.
(mm) Each of the Company and the Subsidiaries owns or
possesses adequate right to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement and Prospectus and have no reason to
believe that the conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with, any such right of
others, which claim, if the subject of an unfavorable decision, ruling or
judgment, could reasonably be expected to result in a Material Adverse Effect.
To the best of the Company's knowledge, all material technical information
developed by and belonging to the Company which has not been patented has been
kept confidential. Neither the Company nor any of its Subsidiaries has granted
or assigned to any other person or entity any right to manufacture, have
manufactured, assemble or sell the current products and services of the Company
or those products and services described in the Registration Statement and
Prospectus.
(nn) No labor disturbance by the employees of the Company or
any of the Subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to have a Material Adverse Effect.
(oo) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Code, or "accumulated funding deficiency" (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan of
the Company or any of its Subsidiaries which could have a Material Adverse
Effect; each employee benefit plan of the Company or any of its Subsidiaries is
in compliance in all material respects with applicable law; including ERISA and
the Code; the Company has not incurred and does not expect to incur liability
under Title IV of ERISA with respect to the termination of, or withdrawal from
any "pension plan" (as defined in ERISA); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under
13
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which could cause the loss
of such qualification.
(pp) The statistical and market-related data included in the
Prospectus are based on or derived from sources which are reliable and accurate.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters and the Underwriters
severally agree to purchase from the Company, at a purchase price per Unit of
$24.25, the number of Firm Units set forth opposite the respective names of the
Underwriters in Schedule I hereto plus any additional number of Units which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Firm Units shall be made at the office of Simpson Thacher
& Bartlett LLP, 425 Lexington Avenue, New York, New York 10017 ("Underwriters'
Counsel") or at such other place as shall be agreed upon by the Lead Manager and
the Company, at 10:00 a.m., New York City time on the third or fourth business
day (as permitted under Rule 15c6-1 under the Exchange Act) (unless postponed in
accordance with the provisions of Section 9 hereof) following the date of this
Agreement, or such other time not later than ten business days after such date
as shall be agreed upon by the Lead Manager and the Company (such time and date
of payment and delivery being herein called the "Closing Date").
(c) Payment for the Firm Units shall be made to or upon the
order of the Company of the purchase price by wire transfer in federal (same
day) funds to the Company upon delivery of certificates for the Firm Units to
the Lead Manager through the facilities of The Depository Trust Company for the
respective accounts of the several Underwriters against receipt therefor signed
by the Lead Manager. Certificates for the Units to be delivered to the Lead
Manager shall be registered in such name or names and shall be in such
denominations as the Lead Manager may request at least two business days before
the Closing Date. The Company will permit the Lead Manager to examine and
package such certificates for delivery at least one full business day prior to
the Closing Date.
(d) In addition, on the basis of the representations,
warranties, covenants and agreements contained herein, but subject to the terms
and conditions set forth herein, the Company hereby grants to the Underwriters
the option to purchase up to 750,000 Optional Units at the same purchase price
per share to be paid by the Underwriters to the Company for the Firm Units as
set forth in this Section 2, for the sole purpose of covering over-allotments in
the sale of Firm Units by the Underwriters. This
14
option may be exercised at any time and from time to time, in whole or in part
on one or more occasions, on or before the 30th day following the date of the
Prospectus, by written notice by the Lead Manager to the Company. Such notice
shall set forth the aggregate number of Optional Units as to which the option is
being exercised and the date and time, as reasonably determined by the Lead
Manager, when the Optional Units are to be delivered (such date and time being
herein sometimes referred to as the "Additional Closing Date"); provided,
however, that the Additional Closing Date shall not be earlier than the Closing
Date or earlier than the second full business day after the date on which the
option shall have been exercised nor later than the eighth full business day
after the date on which the option shall have been exercised (unless such time
and date are postponed in accordance with the provisions of Section 9 hereof).
Certificates for the Optional Units shall be registered in such name or names
and in such authorized denominations as the Lead Manager may request in writing
at least two full business days prior to the Additional Closing Date. The
Company will permit the Lead Manager to examine and package such certificates
for delivery at least one full business day prior to the Additional Closing
Date.
The number of Optional Units to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Optional Units
being purchased as the number of Firm Units set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the total number of Firm Units, subject, however, to
such adjustments to eliminate any fractional units as the Lead Manager in their
sole discretion shall make.
Payment for the Optional Units shall be made to or upon the order of
the Company of the purchase price by wire transfer in federal (same day) funds
to the Company at the offices of Underwriters' Counsel, or such other location
as may be mutually acceptable upon delivery of the certificates for the Optional
Units to you for the respective accounts of the Underwriters.
3. Offering. Upon authorization of the release of the Firm Units by the
Lead Manager, the Underwriters propose to offer the Units for sale to the public
upon the terms and conditions set forth in the Prospectus.
4. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) The Registration Statement and any amendments thereto have
become effective, and the Company will file the Prospectus pursuant to Rule
424(b) within the prescribed time period and will provide evidence satisfactory
to you of such timely filing.
The Company will notify you immediately (and, if requested by the Lead
Manager, will confirm such notice in writing) (i) when any post-effective
Amendment to the Registration Statement becomes effective, (ii) of any request
by the Commission for
15
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the Company's intention to file or
prepare any amendments to the Registration Statement (including pursuant to rule
462(b)), the term sheet or any supplement, revision or amendment to the
Registration Statement or the Prospectus, (iv) of the mailing or the delivery to
the Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, it being understood that the Company shall make every
effort to avoid the issuance of any such stop order, (vi) of the receipt of any
comments from the Commission, and (vii) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Units
for sale in any jurisdiction or the initiation or threatening of any proceeding
for that purpose. If the Commission shall propose or enter a stop order at any
time, the Company will make every reasonable effort to prevent the issuance of
any such stop order and, if issued, to obtain the lifting of such order as soon
as possible. The Company will not file any amendment to the Registration
Statement or any amendment of or supplement to the Prospectus (including the
prospectus required to be filed pursuant to Rule 424(b)) that differs from the
Prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement, or
file any document under the Exchange Act if such document would be deemed to be
incorporated by reference into the Prospectus to which you shall object in
writing after being timely furnished in advance a copy thereof. The Company will
provide the Lead Manager with copies of all such amendments, filings and other
documents a sufficient time prior to any filing or other publication thereof to
permit the Lead Manager a reasonable opportunity to review and comment thereon.
(b) The Company shall comply with the Securities Act and the
Exchange Act to permit completion of the distribution as contemplated in this
Agreement, Registration Statement and Prospectus. If at any time when a
prospectus relating to the Units is required to be delivered under the
Securities Act or the Exchange Act in connection with the sales of Units, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the
Securities Act, the Exchange Act or the Rules and Regulations, or to file under
the Exchange Act so as to comply therewith any document incorporated by
reference in the Registration Statement or the Prospectus or in any amendment
thereof or supplement thereto, the Company will notify you promptly and prepare
and file with the Commission, subject to the second paragraph of Section 4(a)
hereof, an appropriate amendment or supplement (in form and substance
satisfactory to you) which will correct such statement or omission or which will
effect
16
such compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to each of the
Underwriters and Underwriters' Counsel a signed copy of the Registration
Statement, including all consents and exhibits filed therewith and all documents
incorporated by reference therein and all amendments thereto, and the Company
will promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents
incorporated by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, as you may reasonably request. Prior to
10:00 a.m., New York City time, on the business day next succeeding the date of
this Agreement and from time to time thereafter the Company will furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request.
(d) The Company consents to the use and delivery of the
Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 5(b) of the Securities Act. The Company shall also furnish to each of
the Underwriters copies of the Prospectus as requested by any of the
Underwriters.
(e) The Company will use its best efforts, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Preferred Shares, the Purchase Contracts, the Ordinary Shares and
the Hybrid Capital Units for offering and sale under the securities laws
relating to the offering or sale of the Preferred Shares, the Purchase
Contracts, the Ordinary Shares and the Hybrid Capital Units of such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as required for the distribution thereof; except that in no event
shall the Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(f) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than fifteen months after the end of the Company's fiscal quarter in which
the effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act) falls, an earnings statement of the Company and the
Subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).
(g) During the period of 90 days from the date of the
Prospectus, the Company will not, directly or indirectly, without the Lead
Manager's prior written consent, issue, sell, offer or agree to sell, grant any
option for the sale of, pledge, make any short sale or maintain any short
position, establish or maintain a "put equivalent position" (within the meaning
of Rule 16-a-1(h) under the Exchange Act), enter into any swap, derivative
transaction or other arrangement that transfers to another,
17
in whole or in part, any of the economic consequences of ownership of equity
units, ordinary shares, convertible preferred shares or purchase contracts
(whether any such transaction is to be settled by delivery of equity units,
ordinary shares, preferred shares or purchase contracts, other securities, cash
or other consideration) or otherwise dispose of, any equity units, ordinary
shares, convertible preferred shares or purchase contracts (or any securities
convertible into, exercisable for or exchangeable for equity units, ordinary
shares, convertible preferred shares or purchase contracts) or interest therein
of the Company or of any of the Subsidiaries, and the Company will obtain the
undertaking of each of its officers and directors and such of its shareholders
as have been heretofore designated by you and listed on Schedule II attached
hereto not to engage in any of the aforementioned transactions on their own
behalf, other than (i) the Company's sale of Units hereunder, (ii) the issuance
of the Treasury Units or Hybrid Capital Units that may be created or recreated
upon substitution of pledged securities or Ordinary Shares issuable upon early
settlement of the Hybrid Capital Units or Treasury Units, (iii) the exercise of
warrants outstanding on the date hereof; (iv) the exercise of currently
outstanding options; and (v) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans in effect
on the date hereof. The Company will not without the Lead Manager's prior
written consent file a registration statement under the Securities Act in
connection with any transaction by the Company or any person that is prohibited
pursuant to the foregoing, except for registration statements (x) on Form S-8
relating to employee benefit plans, (y) on Form S-4 relating to corporate
reorganizations or other transactions under Rule 145 or (z) required to be filed
pursuant to a registration rights agreement in effect prior to the date hereof..
(h) During the period of three years from the effective date
of the Registration Statement, the Company will furnish to you copies of all
reports or other communications (financial or other) furnished to security
holders (except to the extent available through the Commission's EDGAR System)
or from time to time publicly disseminated, and to deliver to you (i) as soon as
they are available, copies of any reports and financial statements and proxy or
information statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial information to be on a consolidated basis to the extent the accounts
of the Company and the Subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(i) The Company will apply the net proceeds it receives from
the sale of the Shares as set forth under the caption "Use of Proceeds" in the
Prospectus.
(j) The Company will use its best efforts to (i) list the
Hybrid Capital Units on the NYSE, subject only to official notice of issuance
and evidence of satisfactory distribution and (ii) list or quote, as the case
may be, the Ordinary Shares to be issued and sold pursuant to the Purchase
Contracts and upon conversion of the
18
Preferred Shares on the exchange or quotation system on which the Company's
Ordinary Shares are listed or quoted at the time of such issuance.
(k) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the Exchange
Act and the rules and regulations thereunder.
(l) The Company will not take directly or indirectly, any
action which constitutes or is designed to cause or result in, or which could
reasonably be expected to constitute, cause or result in, the stabilization or
manipulation of the price of any security to facilitate the sale or resale of
the Units.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement, the Purchase Contract Agreement, the Pledge Agreement, the
Remarketing Agreement, the Registration Statement and the Prospectus are
consummated or this Agreement is terminated, the Company hereby agrees to pay
all costs and expenses incident to the performance of the obligations of the
Company hereunder, including the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Units, the Preferred Shares and the Ordinary Shares under
the Securities 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 costs
incident to the authorization, issuance, sale and delivery of the Preferred
Shares, Purchase Contracts and Ordinary Shares to be issued and sold pursuant to
the Purchase Contracts and upon conversion of the Preferred Shares and any taxes
payable in connection therewith; (iii) the cost of duplicating and binding any
Agreement Among Underwriters, this Agreement, the Purchase Contract Agreement,
the Pledge Agreement, the Remarketing Agreement, the Blue Sky memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Units,
Preferred Shares, Purchase Contracts and Ordinary Shares; (iv) all expenses in
connection with the qualification of the Units, Preferred Shares, Purchase
Contracts and Ordinary Shares for offering and sale under state or foreign
securities or Blue Sky laws as provided in Section 4(e) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (v) all fees and
expenses in connection with listing the Units and the Ordinary Shares on the
NYSE; (vi) all travel expenses of the Company's officers and employees and any
other expense of the Company incurred in connection with attending or hosting
meetings with prospective purchasers of the Units; (vii) any stock transfer
taxes incurred in connection with this Agreement or the Offering; and (viii) the
filing fees incident to, and the reasonable fees and disbursements of counsel
for the Underwriters in connection with, securing any required review by the
NASD of
19
the terms of the sale of the Units. The Company also will pay or cause to be
paid: (i) the cost of preparing Unit and share certificates; (ii) any fees
charged by securities rating agencies for rating the Units (or any related
security); (iii) the fees and expenses of the Purchase Contract Agent, the
Collateral Agent and their respective counsel; (iv) the cost and charges of any
transfer agent or registrar; and (v) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 5. It is understood, however, that
except as provided in this Section, and Sections 7, 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Units by them, and any
advertising expenses connected with any offers they may make.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Units and the Optional Units, as
provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Units and any Additional Closing Date, if different,
for the Optional Units), to the absence from any certificates, opinions, written
statements or letters furnished to you or to Underwriters' Counsel pursuant to
this Section 6 of any misstatement or omission, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) If a post-effective amendment to the Registration
Statement is required to be filed under the Securities Act, such post-effective
amendment shall have become effective and all necessary approvals from the NYSE
shall have been received not later than 5:30 p.m., New York time, on the date of
this Agreement or at such later time and date as shall have been consented to in
writing by you; the Prospectus containing information relating to the
description of the Units, Preferred Shares, Purchase Contracts and Ordinary
Shares and the method of distribution and similar matters shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time period;
and, at or prior to the Closing Date no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof shall have
been issued and no proceedings therefor shall have been initiated or threatened
by the Commission.
(b) At the Closing Date, you shall have received the favorable
written opinion of (i) LeBoeuf, Lamb, Greene & MacRae, L.L.P., United States
counsel for the Company, (ii) Paul Goldean, Esq., General Counsel of the
Company, (iii) Maples and Calder, Cayman Islands counsel for the Company and
(iv) Bryan Cave LLP, counsel to JPMorgan Chase Bank, as Purchase Contract Agent
and Collateral Agent, each dated the Closing Date and addressed to the
Underwriters in the forms attached hereto as Annexes I(A), I(B), II and III,
respectively.
20
(c) All proceedings taken in connection with the sale of the
Firm Units and the Optional Units as herein contemplated shall be satisfactory
in form and substance to the Lead Manager and to Underwriters' Counsel, and the
Underwriters shall have received from said Underwriters' Counsel a favorable
opinion, dated as of the Closing Date with respect to the issuance and sale of
the Units, the Registration Statement and the Prospectus and such other related
matters as you may require, and the Company shall have furnished to
Underwriters' Counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) At the Closing Date, you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date all agreements,
conditions and obligations of the Company to be performed or complied with
hereunder on or prior thereto have been duly performed or complied with, (iv)
except (A) as disclosed in the Registration Statement and Prospectus and (B) for
such losses or interferences as would not result, individually or in the
aggregate, in a Material Adverse Effect, the Company and the Subsidiaries have
not sustained any material loss or interference with their respective businesses
or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and (v) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus there has
not been any Material Adverse Change in the capital stock or Ordinary Shares of
the Company or any of the Subsidiaries or any change, or any development
involving a prospective change, in the business, prospects, properties,
operations, condition (financial or otherwise) or results of operations of the
Company and the Subsidiaries taken as a whole, except in each case as described
in or contemplated by the Prospectus.
(e) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from Ernst & Young LLP,
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Underwriters
and in form and substance satisfactory to the Underwriters and Underwriters'
Counsel.
(f) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the share
capital, Ordinary Shares, preferred shares, or long-term debt of the Company or
any of the Subsidiaries or any other change (whether or not arising from
transactions in the ordinary course of business), or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
results of operations, business, properties or prospects
21
of the Company and the Subsidiaries taken as a whole, including, without
limitation, the occurrence of a fire, flood, explosion or other calamity at any
of the properties owned or leased by the Company or any of its Subsidiaries, the
effect of which, in any such case described above, is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Units on the terms
and in the manner contemplated in the Prospectus (exclusive of any supplement).
(g) You shall have received a duly executed lock-up agreement
from each person who is a director or officer of the Company and each
shareholder as shall have been heretofore designated by you and listed on
Schedule II hereto substantially in the form attached hereto as Annex IV.
(h) At the Closing Date, the Units shall have been approved
for listing on the NYSE.
(i) The Company shall have complied with the provisions of
Section 4(c) hereof with respect to the furnishing of prospectuses.
(j) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
(k) None of Company's Insurance Subsidiaries shall have been
downgraded by any of the Rating Agencies nor have been put on credit watch with
negative implications (or similar action) by any of the Rating Agencies.
(l) At the Closing Date, the NASD shall have confirmed that it
has not raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(m) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal,
state or foreign governmental or regulatory authority that would, as of the
Closing Date, prevent the issuance or sale of the Units; and no injunction or
order of any federal, state or foreign court shall have been issued that would,
as of the Closing Date, prevent the issuance or sale of the Units.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the Lead
Manager or to Underwriters' Counsel pursuant to this Section 6 shall not be in
all material respects reasonably satisfactory in form and substance to the Lead
Manager and to Underwriters' Counsel, all obligations of the Underwriters
hereunder may be cancelled by the Lead Manager at, or at any time prior to, the
Closing Date and the obligations of the Underwriters to purchase the
22
Optional Units may be cancelled by the Lead Manager at, or at any time prior to,
the Additional Closing Date. Notice of such cancellation shall be given to the
Company in writing or by telephone. Any such telephone notice shall be confirmed
promptly thereafter in writing.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Units, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, 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; provided, however, that the Company will not be liable
in any such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the Lead
Manager expressly for use therein. The parties agree that such information
provided by or on behalf of any Underwriter through the Lead Manager consists
solely of the material referred to in the last sentence of Section 1(b) hereof;
provided, further, that the foregoing indemnity agreement with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter who
failed to deliver a Prospectus (as then amended or supplemented, provided by the
Company to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the person
asserting any losses, claims, damages and liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they are
made, not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured, as determined by a court of
competent jurisdiction in a decision not subject to further appeal, in such
Prospectus and such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person. This indemnity agreement
will be
23
in addition to any liability which the Company may otherwise have, including but
not limited to other liability under this Agreement.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Units, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Lead Manager specifically for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Units to be
purchased by such Underwriter hereunder. The parties agree that such information
provided by or on behalf of any Underwriter through the Lead Manager consists
solely of the material referred to in the last sentence of Section 1(b) hereof.
This indemnity will be in addition to any liability which any Underwriter may
otherwise have, including but not limited to other liability under this
Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of any claims or the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the claim or the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve the indemnifying party from any liability which it may have under
this Section 7 to the extent that it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that such
indemnifying party may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof,
24
the indemnifying party will be entitled to participate, at its own expense in
the defense of such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided however, that
counsel to the indemnifying party shall not (except with the written consent of
the indemnified party) also be counsel to the indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, (iii) the indemnifying party does not diligently defend the action
after assumption of the defense, or (iv) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior written
consent of the indemnified parties, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
claim, investigation, action or proceeding in respect of which indemnity or
contribution may be or could have been sought by an indemnified party under this
Section 7 or Section 8 hereof (whether or not the indemnified party is an actual
or potential party thereto), unless (x) such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such claim, investigation, action or proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or
any failure to act, by or on behalf of the indemnified party, and (y) the
indemnifying party confirms in writing its indemnification obligations hereunder
with respect to such settlement, compromise or judgment.
8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, officers
of the Company who
25
signed the Registration Statement and directors of the Company) as incurred to
which the Company and one or more of the Underwriters may be subject, in such
proportions as are appropriate to reflect the relative benefits received by the
Company and the Underwriters from the Offering or, if such allocation is not
permitted by applicable law, in such proportions as are appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Underwriters shall be deemed to be in the same proportion
as (x) the total proceeds from the Offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bears to (y)
the underwriting discount or commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of each of the Company and of the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters 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 contribution pursuant to this
Section 8 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 Section. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any judicial, regulatory or
other legal or governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the provisions of this Section 8,
(i) no Underwriter shall be required to contribute any amount in excess of the
amount by which the discounts and commissions applicable to the Units
underwritten by it and distributed 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 and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly
26
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. The
obligations of the Underwriters to contribute pursuant to this Section 8 are
several in proportion to the respective number of Units to be purchased by each
of the Underwriters hereunder and not joint.
27
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Units or Optional Units hereunder, and if the
Firm Units or Optional Units with respect to which such default relates do not
(after giving effect to arrangements, if any, made by you pursuant to subsection
(b) below) exceed in the aggregate 10% of the number of Firm Units or Optional
Units, the Firm Units or Optional Units to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Units set forth opposite their respective
names in Schedule I hereto bear to the aggregate number of Firm Units set forth
opposite the names of the non-defaulting Underwriters, subject, however, to such
adjustments to eliminate fractional Units as the Lead Manager in their sole
discretion shall make.
(b) In the event that such default relates to more than 10% of
the Firm Units or Optional Units, as the case may be, the Lead Manager may in
their discretion arrange for themselves or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree) to
purchase such Firm Units or Optional Units, as the case may be, to which such
default relates on the terms contained herein. In the event that within five
calendar days after such a default the Lead Manager do not arrange for the
purchase of the Firm Units or Optional Units, as the case may be, to which such
default relates as provided in this Section 9, this Agreement or, in the case of
a default with respect to the Optional Units, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Units shall
thereupon terminate, without liability on the part of the Company with respect
thereto (except in each case as provided in Sections 5, 7, 8, 10 and 11(d)) or
the Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Units or Optional Units to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
the Lead Manager or the Company shall have the right to postpone the Closing
Date or Additional Closing Date, as the case may be for a period, not exceeding
five business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Units and Optional
Units.
28
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, and the Company
contained in this Agreement or in certificates of officers of the Company or any
Subsidiary submitted hereto or thereto, including the agreements contained in
Section 5, the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Units to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8, 10, 11(d), 14 and 15 hereof shall survive the termination of this
Agreement, including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the execution
of this Agreement. If either the public offering price or the purchase price per
Unit has not been agreed upon prior to 5:00 p.m., New York City time, on the
fifth full business day after this Agreement shall have become effective, this
Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided.
(b) The Lead Manager shall have the right to terminate this
Agreement at any time prior to the Closing Date or to terminate the obligations
of the Underwriters to purchase the Optional Units at any time prior to the
Additional Closing Date, as the case may be, if (A) any domestic or
international event or act or occurrence has materially disrupted, or in the
Lead Manager's opinion will in the immediate future materially disrupt, the
market for the Company's securities or securities in general; or (B) if trading
on the NYSE, the Nasdaq National Market (the "Nasdaq") or the American Stock
Exchange shall have been suspended or been made subject to material limitation,
or minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the NYSE, the
Nasdaq or the American Stock Exchange by the NYSE, the Nasdaq or the American
Stock Exchange or by order of the Commission or any other governmental authority
having jurisdiction; or (C) if a banking moratorium has been declared by any
state or federal authority or if any material disruption in commercial banking
or securities settlement or clearance services shall have occurred; or (D) any
downgrading shall have occurred in the Company's corporate credit rating or the
rating accorded the Company's debt securities or preferred shares by any
"nationally recognized statistical rating organization" as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Securities Act or if
any such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred shares; or (E) (i) if there shall
have occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a
29
declaration of a national emergency or war by the United States or (ii) if there
shall have been any other calamity or crisis or any change in political,
financial or economic conditions if the effect of any such event in (A) or (E)
in the Lead Manager's judgment makes it impracticable or inadvisable to proceed
with the offering, sale and delivery of the Firm Units or the Optional Units, as
the case may be, on the terms and in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be in writing.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to Section 9(b) or pursuant to
Section 11(a)), or if the sale of the Units provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth herein is not satisfied or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith. If this Agreement shall be
terminated pursuant to Section 6 (other than pursuant to Section 6(l)) or 11(b)
hereof, then no party shall have any liability hereunder except for the
Company's obligation to pay all out-of-pocket expenses of the Underwriters
(including the fees and expenses of their counsel) incurred in connection with
this Agreement.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to such Underwriter c/o Bear, Stearns & Co.
Inc., 383 Madison Avenue, New York, New York 10179, Attention: Jay Bullock,
Senior Managing Director, with a copy to Simpson Thacher & Bartlett LLP, 425
Lexington Avenue, New York, New York, 10017, Attention: Gary I. Horowitz, Esq.
(b) if sent to the Company, shall be mailed, delivered, or
faxed and confirmed in writing to the Company at P.O. Box HM 2939, Crown House,
Third Floor, 4 Par-la-Ville Road, Hamilton HM 08, Bermuda, Attention: Paul
Goldean, Esq., with a copy to LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West
55th Street, New York, New York, 10019, Attention: Stephen G. Rooney, Esq.
provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to the Lead Manager, which
address will be supplied to any other party hereto by the Lead Manager upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
30
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 7 and
8 hereof, and their respective successors and assigns, and no other person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and their
respective successors, and said controlling persons, and officers and directors
and their heirs and legal representatives, and it is not for the benefit of any
other person, firm or corporation. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Units from any of the
Underwriters.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. Submission to Jurisdiction and Service of Process. (a) The Company
irrevocably (a) submits to the jurisdiction of any court of the State of New
York in New York County or the United States District Court for the Southern
District of the State of New York for the purpose of any suit, action, or other
proceeding arising out of this Agreement, or any of the agreements or
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus (each, a "Proceeding"), (b) agrees that all claims in respect of any
Proceeding may be heard and determined in any such court, (c) waives, to the
fullest extent permitted by law, any immunity from jurisdiction of any such
court or from any legal process therein, (d) agrees not to commence any
Proceeding other than in such courts, and (e) waives, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum.
(b) The Company agrees that service of all writs, process and
summonses in any suit, action or proceeding brought in connection with this
Agreement against the Company in any court of the State of New York or any
United States federal court, in each case, sitting in the Borough of Manhattan,
City and State of New York, may be made upon CT Corporation System at 111 Eighth
Avenue, New York, New York 10011, whom the Company irrevocably appoints as its
authorized agent for service of process. The Company represents and warrants
that CT Corporation System has agreed to act as the Company's agent for service
of process. The Company agrees that such appointment shall be irrevocable until
the irrevocable appointment by the Company of a successor in The City of New
York as its authorized agent for such purpose and the acceptance of such
appointment by such successor. The Company further 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.
If CT Corporation System shall cease to act as the agent for service of process
for the Company, the Company shall appoint without delay, another such agent and
provide prompt written notice to Bear, Stearns & Co. Inc. of such appointment.
31
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be delivered by facsimile and shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
18. Time is of the Essence. 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.
[signature page follows]
32
If the foregoing correctly sets forth the understanding between you and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us. 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,
SCOTTISH RE GROUP LIMITED
By: /s/ Paul Goldean
-------------------------------------
Name: Paul Goldean
Title: General Counsel
33
This letter agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
Very truly yours,
By: /s/ Stephen Parish
-------------------------------------
Print Name: Stephen Parish
34
SCHEDULE I
UMBER OF FIRM UNITS
NAME OF UNDERWRITER TO BE PURCHASED
Bear, Stearns & Co. Inc. .......................... 3,000,000
UBS Securities LLC ................................ 1,125,000
J.P. Morgan Securities Inc. ....................... 875,000
---------
Total:.......................................... 5,000,000
I-1
SCHEDULE II
NAMES OF STOCKHOLDERS SUBJECT TO THE LOCK-UP PROVISION
Pacific Life Insurance Company
Michael Austin
G. William Caulfeild-Browne
Robert M. Chmely
Michael C. French
Paul Goldean
David Huntley
Lord Norman Lamont
Thomas A. McAvity, Jr.
J. Clay Moye
Elizabeth A. Murphy
Hazel R. O'Leary
Glenn S. Schafer
Oscar R. Scofield
Khanh T. Tran
Clifford J. Wagner
Scott E. Willkomm
II-1
SCHEDULE III
LIST OF SUBSIDIARIES
Scottish Annuity & Life Insurance Company (Cayman) Ltd.
Scottish Annuity & Life Holdings (Bermuda) Limited
Scottish Annuity & Life Insurance Company (Bermuda) Limited
Scottish Holdings (Barbados), Ltd.
Scottish Holdings, Inc.
Scottish Annuity & Life International Insurance Company (Bermuda) Ltd.
Scottish Financial (Luxembourg) S.a.r.l.
Scottish Re (U.S.), Inc.
Scottish Re (Dublin) Limited
Scottish Solutions LLC
Tartan Wealth Management, Inc.
Tartan Financial (U.K.)
Tartan Holdings (U.K.) Limited
The Scottish Annuity Company (Cayman) Ltd.
Scottish Re Holdings Limited
Scottish Re Limited
World-Wide Life Assurance S.A.
World-Wide Corporate Capital Limited
World-Wide Insurance PCC Limited
III-1
ANNEX I(A)
Form of Opinion of Company's U.S. Counsel
ANNEX I(A)-1
ANNEX I(B)
Form of Opinion of Company's General Counsel
ANNEX I(B)-1
ANNEX II
Form of Opinion of Company's Cayman Island Counsel
ANNEX II-1
ANNEX III
Form of Counsel to the Purchase Contract Agent and the Collateral Agent
ANNEX III-1
ANNEX IV
December __, 2003
BEAR, STEARNS & CO. INC.
as Representative of the
several Underwriters named in
Schedule I attached to the
Underwriting Agreement
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Attention: Equity Capital Markets
Scottish Re Group Limited - Lock-Up Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by Scottish Re Group Limited, an exempted company
limited by shares incorporated and existing under the laws of the Cayman Islands
(the "Company"), of 5,000,000 of its Hybrid Capital Units (the "Units").
In order to induce you and the other underwriters for which you act as
representatives (the "Underwriters") to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, Stearns & Co.
Inc. ("Bear Stearns"), during the period from the date hereof until ninety (90)
days from the date of the final prospectus for the Offering (the "Lock-Up
Period"), the undersigned (a) will not, directly or indirectly, offer, sell,
agree to offer or sell, solicit offers to purchase, grant any call option or
purchase any put option with respect to, pledge, borrow or otherwise dispose of
any Relevant Security (as defined below), (b) will not establish or increase any
"put equivalent position" or liquidate or decrease any "call equivalent
position" with respect to any Relevant Security (in each case within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder), or (c) will not otherwise enter into
any swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any of the economic consequence of ownership of a
Relevant Security, whether or not such transaction is to be settled by delivery
of Relevant Securities, other securities, cash or other consideration. As used
herein "Relevant Security" means any equity unit, ordinary share, preferred
share or purchase contract or other security of the Company or any subsidiary
that is convertible into, or exercisable or exchangeable for equity units,
ordinary shares, convertible preferred shares or purchase contracts or that
holds the right to acquire any equity units, ordinary shares, convertible
preferred shares or purchase contracts of the Company or any subsidiary or any
other such Relevant Security, except for such rights as
ANNEX IV-1
may have been fully satisfied or waived prior to the effectiveness of the
Registration Statement.
The undersigned hereby authorizes the Company during the Lock-Up Period
to cause any transfer agent for the Relevant Securities to decline to transfer,
and to note stop transfer restrictions on the share register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the share register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of Bear Stearns, during the Lock-Up
Period the undersigned (x) will not file or participate in the filing with the
Securities and Exchange Commission of any registration statement, or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect to any proposed offering or sale of a
Relevant Security and (y) will not exercise any rights the undersigned may have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
[signature page follows]
ANNEX IV-2
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. Delivery of a signed copy of this letter
by facsimile transmission shall be effective as delivery of the original hereof.
Very truly yours,
By: ________________________________
Print Name: _________________________
ANNEX IV-3