Exhibit 1.1a
EXECUTION COPY
XL Capital Ltd
Class A Ordinary Shares
-------------
Underwriting Agreement
November 1, 2001
Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated,
Banc of America Securities LLC,
Credit Suisse First Boston Corporation,
J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
as Representatives of the several
Underwriters named in the Pricing
Agreement hereinafter described
Ladies and Gentlemen:
From time to time XL Capital Ltd, a Cayman Islands exempted limited company
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Class A Ordinary Shares, par value
$0.01 per share (the "Shares"), specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, the "Firm Shares"). If
specified in such Pricing Agreement, the Company may grant to the Underwriters
the right to purchase at their election an additional number of shares,
specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares shall
be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time to
the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares
in the Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of the Company to sell any of
the Shares or as an obligation of any of the Underwriters to purchase any of the
Shares. The obligation of the Company to issue and sell any of the Shares and
the obligation of any of the Underwriters to purchase any of the Shares shall be
evidenced by the Pricing Agreement with respect to the Designated Shares
specified therein. Each Pricing Agreement shall specify the aggregate number of
the Firm Shares, the maximum number of Optional Shares, if any, the initial
public offering price of such Firm and Optional Shares or the manner of
determining such price, the purchase price to the Underwriters of such
Designated Shares, the names of the Underwriters of such Designated Shares, the
names of the Representatives of such Underwriters, the number of such Designated
Shares to be purchased by each Underwriter and the commission, if any, payable
to the Underwriters with respect thereto and shall set forth the date, time and
manner of delivery of such Firm and Optional Shares, if any, and payment
therefor. The Pricing Agreement shall also specify (to the extent not set forth
in the registration statement and prospectus with respect thereto) the terms of
such Designated Shares. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No 333-72018) (as
amended by Amendment No. 1 to the registration statement, the "Initial
Registration Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to the Initial Registration Statement, but
including all documents incorporated by reference in the prospectus
included therein, to the Representatives for each of the other Underwriters
has been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore been
filed, or transmitted for filing, with the Commission (other than the
Company's Form 10-Q for the quarter ended September 30, 2001 incorporated
by reference into the Initial Registration Statement and the prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) under the
Act, including the related preliminary prospectus supplement with respect
to the Shares), is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such
2
part of the Initial Registration Statement became effective, each as
amended at the time such part of the Initial Registration Statement became
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Shares, in the form used to
confirm sales of the Shares (including the related prospectus supplement
with respect to the Shares) and filed with the Commission pursuant to Rule
424(b), under the Act, is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Initial Registration Statement shall be deemed to refer to
and include any annual report of the Company filed pursuant to Section
13(a), 13(c) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Shares in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the Act
in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make
3
the statements in the Registration Statement not misleading and the
statements in the Prospectus, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter of Designated Shares through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares;
(d) Neither the Company nor any of its Significant Subsidiaries (as
defined below) has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus which loss or interference
would have a Material Adverse Effect (as defined below), or would
reasonably be expected to have a prospective Material Adverse Effect on the
Company and its Significant Subsidiaries, taken as a whole; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock (other than changes resulting from the exercise of stock options or
the conversions of warrants or capital stock which were outstanding as of
such date, or from the exercise of options granted after such date in the
ordinary course of business or from repurchases of capital stock) or
long-term debt of the Company or any of its Significant Subsidiaries or any
material adverse change, or any development that would reasonably be
expected to involve a prospective material adverse change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its Significant Subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus;
(e) The Company has been duly incorporated and is validly existing as
an exempted limited company in good standing under the laws of the Cayman
Islands, with power and authority to own its properties and conduct its
business as described in the Prospectus and has been duly qualified as a
foreign company for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification,
except where such failure to be so qualified in any such jurisdiction or to
have any such power or authority would not have a material adverse effect
on the current or future condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"); and each Significant
Subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(f) The Company had, on September 30, 2001, an authorized
capitalization as set forth in the Prospectus under the caption "Actual"
under the heading "Capitalization", and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable;
(g) The Shares have been duly and validly authorized, and, when the
Firm Shares are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Shares and, in the case
of any Optional Shares, pursuant to Over-allotment Options (as defined in
Section 3 hereof) with respect to such Shares, such Designated Shares
4
will be duly and validly issued and fully paid and non-assessable; the
Shares conform to the description thereof contained in the Registration
Statement and the Designated Shares will conform to the description thereof
contained in the Prospectus as amended or supplemented with respect to such
Designated Shares;
(h) The issue and sale of the Shares and the compliance by the Company
with all of the provisions of this Agreement, any Pricing Agreement and
each Over-allotment Option, if any, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its Significant Subsidiaries is a party or by which the Company or any of
its Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is subject,
nor will such action result in any violation of the provisions of the
Articles of Association or the Memorandum of Association of the Company or
any statute or any order, rule or regulation of any court or governmental
agency or body ("Governmental Agency") having jurisdiction over the Company
or any of its Significant Subsidiaries or any of its properties except in
each case (other than with respect to such Articles of Association or
By-Laws) for such conflicts, violations, breaches or defaults which would
not result in a Material Adverse Effect;
(i) No consent, approval, authorization, order, registration or
qualification of or with any such Governmental Agency (a "Governmental
Authorization") is required for the issue and sale by the Company of the
Shares or the consummation by the Company of the transactions contemplated
by this Agreement or any Pricing Agreement or any Over-allotment Option,
except such as have been, or will have been prior to each Time of Delivery
(as defined in Section 4 hereof), obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(j) All of the issued share capital of each Significant Subsidiary of
the Company which is a corporation have been duly and validly authorized
and issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims (for purposes of
this agreement, "Subsidiary" means, as applied to any person, any
corporation, limited or general partnership, trust, association or other
business entity of which an aggregate of greater than 50% of the
outstanding Voting Shares of such person is, at any time, directly or
indirectly, owned by such person and/or one or more subsidiaries of such
person and "Significant Subsidiary" shall have the meaning of "significant
subsidiary" as set forth in Regulation S-X under the Act; for purposes of
the definition of " Subsidiary," "Voting Shares" means, with respect to any
corporation, the capital stock having the general voting power under
ordinary circumstances to elect at least a majority of the board of
directors (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency));
(k) None of the transactions contemplated to be performed by the
Company by this Agreement (including, without limitation, the use of the
proceeds from the sale of the Designated Shares) will violate or result in
a violation of Section 7 of the Exchange Act, or any
5
regulation promulgated thereunder, including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal Reserve
System;
(l) Prior to the date hereof, neither the Company nor, to the
Company's knowledge, any of its affiliates has taken any action which is
designed to or which has constituted or which might have been expected to
cause or result in stabilization or manipulation of the price of any
security of the Company in connection with the offering of the Designated
Shares in violation of the Exchange Act;
(m) Other than as set forth or incorporated by reference in the
Prospectus, or as encountered in the ordinary course of business in the
Company's claim activities, there are no legal or governmental proceedings
pending to which the Company or any of its Significant Subsidiaries is a
party or of which any property of the Company or any of its Significant
Subsidiaries is the subject, which would individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on the operations
of the Company and its Significant Subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(n) The financial statements of the Company and its consolidated
subsidiaries incorporated by reference in the Prospectus present fairly the
financial position of the Company and its consolidated Subsidiaries as of
the dates shown and their results of operations and cash flows for the
periods shown, and except as otherwise disclosed in the Prospectus, such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis;
(o) The Company and its Significant Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any written notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect;
(p) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(q) Neither the Company nor any of its Significant Subsidiaries is in
violation of its Articles of Association or Memorandum of Association or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound, except
for such defaults which would not result in a Material Adverse Effect;
(r) The statements set forth in the Prospectus under the captions
"General Description of the Offered Securities" and "Description of XL
Capital Ordinary Shares", insofar as they purport to constitute a summary
of the terms of the Shares, and statements set forth under the caption
"Certain Tax Considerations" in the Prospectus Supplement insofar as they
purport to describe the provisions of the laws referred to therein, are
accurate, complete and fair in all material respects;
6
(s) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(t) PricewaterhouseCoopers LLP, the Company's auditors, who have
certified certain financial statements of the Company and its consolidated
subsidiaries, are independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder.
(u) No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on
behalf of the Underwriters to the Cayman Islands or any political
subdivision or taxing authority thereof or therein in connection with (A)
the issuance, sale and delivery by the Company to or for the respective
accounts of the Underwriters of the Designated Shares or (B) the sale or
delivery outside the Cayman Islands by the Underwriters of the Designated
Shares to the initial purchasers thereof, other than as described in the
opinion of Hunter & Hunter delivered pursuant to Section 7(d) of this
Agreement.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Shares and authorization by the Representatives of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus as amended or supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares to
be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
7
4. Certificates for the Firm Shares and the Optional Shares to be purchased
by each Underwriter pursuant to the Pricing Agreement relating thereto, in the
form specified in such Pricing Agreement and in such authorized denominations
and registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Goldman, Sachs & Co. at least twenty-four
hours in advance as specified in such Pricing Agreement, (i) with respect to the
Firm Shares, all in the manner and at the place and time and date specified in
such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, herein called the "Second Time
of Delivery". Each such time and date for delivery is herein called a "Time of
Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Shares or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating to
such Shares and prior to any Time of Delivery for such Shares which shall
be disapproved by the Representatives for such Shares promptly after
reasonable notice thereof; to advise the Representatives promptly of any
such amendment or supplement so long as the delivery of a prospectus is
required in connection with the offering or sale of such Shares and furnish
the Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Shares, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Shares, of the
suspension of the qualification of such Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating
to the Shares or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order; Goldman, Sachs & Co.
shall advise the Company when the delivery of a
8
prospectus is no longer required in connection with the offer or sale of
Shares pursuant to this Section 5(a);
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering
and sale under the securities laws of such jurisdictions as the
Representatives may reasonably request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Shares, provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) Prior to noon, New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with written and electronic copies of the
Prospectus as amended or supplemented in New York City in such quantities
as the Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or sale
of the Shares and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many written and electronic copies as the Representatives may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission
or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) That during the period beginning from the date hereof and
continuing until the date 60 days after the date of this Underwriting
Agreement, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder any Shares or securities of the Company that
are convertible into or exchangeable for, or that represent the right to
receive, Shares or any such convertible or exchangeable securities (other
than pursuant to stock option or other similar plans existing on the date
of this Agreement or pursuant to this Agreement), without the prior written
consent of Goldman, Sachs & Co., on behalf of the Underwriters;
(f) That the Underwriters shall have received letters, dated the First
Time of Delivery, from Michael Esposito, Jr. and Brian O'Hara whereby each
such person agrees, for the period commencing on the date of the Time of
Delivery and ending 30 days after the date of the
9
Underwriting Agreement, not to offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any Shares, or publicly
disclose the intention to make any such offer, sale, pledge or disposal (1)
other than no more than 10% of the Shares held by each such person on the
date of such letters, (2) other than as bona fide gift or gifts, provided
that the donee or donees thereof agree to be bound by such letters or (3)
other than for tax planning purposes, without the prior written consent of
Goldman, Sachs & Co., on behalf of the Underwriters;
(g) To use its best efforts to cause the Designated Shares to be
listed on the New York Stock Exchange;
(h) To use the net proceeds received by it from the sale of the
Designated Shares pursuant to this Agreement and the Pricing Agreement in
the manner set forth in the Registration Statement under the caption "Use
of Proceeds;"
(i) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 A.M., Washington, D.C. time, on the first
business day following the date of this Agreement, and the Company shall at
the time of filing either pay the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act; and
(j) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
corporate logo for use on the website, if any, operated by such Underwriter
for the purpose of facilitating the on-line offering of the Shares in
connection with the distribution contemplated by this Underwriting
Agreement (the "License"); provided, however, that the License shall be
used solely for the purpose described above, is granted without any fee and
may not be assigned or transferred.
6. The Company covenants and agrees with the several Underwriters that,
subject to any agreements between the Company and the Representatives relating
to expenses, the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and any
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents (including compilations thereof); (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
reviews by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares; (v) the cost of preparing certificates for the Shares;
(vi) the cost and charges of any transfer agent or registrar or dividend
disbursing agent; (vii) all expenses and taxes arising as a result of the
issuance, sale and delivery of the Designated Shares, of the sale and delivery
outside of the Cayman Islands of the Designated Shares by the
10
Underwriters to the initial purchasers thereof in the manner contemplated under
this Agreement and the Pricing Agreement, including, in any such case, any
Cayman Islands income, capital gains, withholding, transfer or other tax
asserted against a Underwriter by reason of the purchase and sale of the
Designated Shares pursuant to the Underwriting Agreement and the Pricing
Agreement; and (viii) all other costs and expenses incident to the performance
of its obligations hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 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 Shares by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company in or incorporated by reference
in the Pricing Agreement relating to such Designated Shares are, at and as of
each Time of Delivery for such Designated Shares, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Shares shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 A.M.,
Washington, D.C. time, on the business day following the date of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to the Representatives' reasonable satisfaction;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Representatives their written opinion or opinions,
dated such Time of Delivery, in form and substance reasonably satisfactory
to the Representatives, in the form attached hereto in Annex II, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Cahill Gordon & Reindel, counsel for the Company, shall have
furnished to the Representatives their written opinion or opinions, dated
such Time of Delivery, in form and substance reasonably satisfactory the
Representatives, in the form attached hereto in Annex III;
(d) Hunter & Hunter, Cayman Islands counsel for the Company, shall
have furnished to the Representatives their written opinion or opinions,
dated such Time of Delivery, in form and substance reasonably satisfactory
to the Representatives, in the form attached hereto in Annex IV;
11
(e) Paul S. Giordano, Executive Vice President and General Counsel to
the Company, shall have furnished to the Representatives his written
opinion or opinions, dated such Time of Delivery, in form and substance
reasonably satisfactory to the Representatives, in the form attached hereto
in Annex V;
(f) On the date of the Pricing Agreement for such Designated Shares
and at each Time of Delivery for such Designated Shares,
PricewaterhouseCoopers LLP, the independent accountants of the Company who
have certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter or letters, dated the
respective dates of delivery thereof, in form and substance reasonably
satisfactory to the Representatives;
(g) (i) Neither the Company nor any of its Significant Subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Shares, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated Shares there
shall not have been any change in the capital stock (other than changes
resulting from the exercise of share or over-allotment options or the
conversion of warrants or capital stock which were outstanding as of such
date, or from the exercise of options granted after such date in the
ordinary course of business or from repurchases of capital stock) or
long-term debt of the Company or any of its Significant Subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its Significant Subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented prior to the date of the Pricing
Agreement relating to the Designated Shares, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as amended or supplemented relating to the Designated Shares;
(h) On or after the date of the Pricing Agreement relating to the
Designated Shares (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or the Company's financial strength
or claims paying ability by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act, and (ii) other than any announcements made
prior to the date of the Pricing Agreement, no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities
or the Company's financial strength or claims paying ability;
(i) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in
12
trading in securities generally on the New York Stock Exchange (the
"Exchange"); (ii) a suspension or material limitation in trading in the
Company's securities on the Exchange; (iii) a general moratorium on
commercial banking activities in New York or Bermuda declared by the
relevant authority or a material disruption in commercial banking or
securities settlement or clearance services in the United States as first
amended or supplemented relating to the Designated Shares; (iv) the
outbreak or escalation of hostilities involving the United States or
Bermuda or the declaration by the United States or Bermuda of a national
emergency or war (v) a change or development involving a prospective change
in the Cayman Islands taxation affecting the Company, the Designated Shares
or the transfer thereof or (vi) the occurrence of any other calamity or
crisis or any change in financial, political or economic conditions in the
United States or currency exchange rates or controls in the United States,
the Cayman Islands, Bermuda or elsewhere, if the effect of any such event
specified in clauses (iv) or (vi) in the judgment of the Representatives is
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Designated Shares
on the terms and in the manner contemplated in the Prospectus as amended or
supplemented relating to the Designated Shares;
(j) The Shares at each Time of Delivery shall have been duly listed,
subject to notice of issuance, on the Exchange;
(k) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the Pricing Agreement relating to
such Designated Shares; and
(l) The Company shall have furnished or caused to be furnished to the
Representatives at each Time of Delivery for the Designated Shares
certificates of officers of the Company satisfactory to the Representatives
as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a)
relating to the effectiveness of the Registration Statement and no stop
orders, (g) and (h) of this Section and as to such other matters as the
Representatives may reasonably request.
8. The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal expenses of one counsel (in addition to any local
counsel) engaged reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as
13
amended or supplemented and any other prospectus relating to the Shares, or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Shares
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares.
(a) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Shares, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred, including the reasonable
fees and expenses of one counsel (in addition to any applicable local counsel).
(b) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include any statement as
to or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(c) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims,
14
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriters
of the Designated Shares on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Shares in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Shares and not joint.
(d) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. If any Underwriter shall default in its obligation to purchase the Firm
Shares or Optional Shares which it has agreed to purchase under the Pricing
Agreement relating to such Shares, the
15
Representatives may in their discretion arrange for themselves or another party
or other parties satisfactory to the Company to purchase such Shares on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such Firm
Shares or Optional Shares, as the case may be, then the Company shall be
entitled to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to the Representatives to purchase such
Shares on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Shares, or the Company notifies the Representatives that it
has so arranged for the purchase of such Shares, the Representatives or the
Company shall have the right to postpone a Time of Delivery for such Shares for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing Agreement
with respect to such Designated Shares.
(a) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Shares or Optional Shares, as
the case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Firm Shares or the Over-allotment Option
relating to such Optional Shares, as the case may be, shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
16
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, the Company shall not then be under any liability
to any Underwriter with respect to the Firm Shares or Optional Shares with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
reasonable fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of such
Designated Shares, but the Company shall then be under no further liability to
any Underwriter with respect to such Designated Shares except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. The Company irrevocably (i) agrees that any legal suit, action or
proceeding against the Company brought by any Underwriter or by any person who
controls any Underwriter arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in the federal district court
for the Southern District of New York and the New York County Court, (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Company has appointed CT Corporation System, New York,
New York, as its authorized agent (the "Authorized Agent") upon whom process may
be served in any
17
such action arising out of or based on this Agreement or the transactions
contemplated hereby which may be instituted in the federal district court for
the Southern District of New York and the New York County Court by any
Underwriter or by any person who controls any Underwriter, expressly consents to
the jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. The Company represents and
warrants that the Authorized Agent has agreed to act as such agent for service
of process and agrees to take any and all action, including the filing of any
and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company shall be
deemed, in every respect, effective service of process upon the Company.
15. Time shall be of the essence in each Pricing Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business. "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
16. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
17. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
18. The Company is authorized, subject to applicable law, to disclose any
and all aspects of this potential transaction that are necessary to support any
U.S. federal income tax benefits expected to be claimed with respect to such
transaction, without the Underwriters imposing any limitation of any kind.
18
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and one for each of the Representatives
counterparts hereof.
Very truly yours,
XL Capital Ltd
By: /s/ Paul S. Giordano
---------------------------------------
Name: Paul S. Giordano
Title: Executive Vice President,
General Counsel & Secretary
Accepted as of the date hereof:
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated,
Banc of America Securities LLC,
Credit Suisse First Boston Corporation,
J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Goldman, Sachs & Co.
- ----------------------------------
(Goldman, Sachs & Co.)
19
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated,
Banc of America Securities LLC,
Credit Suisse First Boston Corporation,
J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Goldman, Sachs & Co.
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
November 1, 2001
Ladies and Gentlemen:
XL Capital Ltd, a Cayman Islands exempted limited company (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated November 1, 2001 (the "Underwriting Agreement"),
between the Company on the one hand and Goldman, Sachs & Co., Morgan Stanley &
Co. Incorporated, Banc of America Securities LLC, Credit Suisse First Boston
Corporation, J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, on the other hand, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Shares specified in Schedule
II hereto (the "Designated Shares") consisting of Firm Shares and any Optional
Shares the Underwriters may elect to purchase. Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in relation
to the Prospectus as amended or supplemented relating to the Designated Shares
which are the subject of this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Shares pursuant to Section 12 of the Underwriting Agreement and the address of
the Representatives referred to in such Section 12 are set forth in Schedule II
hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and, (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares, as provided below, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company at
the purchase price to the Underwriters set forth in Schedule II hereto that
portion of the number of Optional Shares as to which such election shall have
been exercised.
The Company hereby grants to each of the Underwriters the right to purchase
at their election up to the number of Optional Shares set forth opposite the
name of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from the Representatives to the Company given within a period
of 30 calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by the Representatives, but
in no event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no earlier than two
or later than ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and one for each of the Representatives plus
one for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
XL Capital Ltd
By: ________________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated,
Banc of America Securities LLC,
Credit Suisse First Boston Corporation,
J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: _____________________________________
(Goldman, Sachs & Co.)
SCHEDULE I
Underwriter Number of Firm Maximum Number of
Shares to be Optional
Purchased Shares Which May be
Purchased
Total.......................
=============== ================
SCHEDULE II
Title of Designated Shares:
Number of Designated Shares:
Number of Firm Shares:
Maximum Number of Optional Shares:
Initial Offering Price to Public:
per Share
Purchase Price by Underwriters:
per Share
Commission Payable to Underwriters:
per Share
Form of Designated Shares:
Specified Funds for Payment of Purchase Price:
Describe any lock-up provisions with respect to the Designated Shares
Time of Delivery:
Time of Delivery Location:
Names and Addresses of Representatives:
Other Terms:
ANNEX II
SIMPSON THACHER & BARTLETT FORM OF OPINION
ANNEX III
CAHILL GORDON & REINDEL FORM OF OPINION
ANNEX IV
HUNTER & HUNTER FORM OF OPINION
ANNEX V
XL CAPITAL LTD FORM OF OPINION