Exhibit 1.1
Executed Copy
1,850,000 Shares
AXIS CAPITAL HOLDINGS LIMITED
COMMON SHARES, PAR VALUE $0.0125 PER SHARE
UNDERWRITING AGREEMENT
August 17, 2005
August 17, 2005
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
New York, New York 10080
Dear Sirs and Mesdames:
The shareholder (the "Selling Shareholder") of AXIS Capital
Holdings Limited, a Bermuda corporation (the "Company"), named in Schedule I
hereto, proposes to sell to Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Underwriter"), an aggregate of 1,850,000 Common Shares, par value
$0.0125 per share, of the Company (the "Shares"), with the Selling Shareholder
selling the amount set forth opposite such Selling Shareholder's name under
"Number of Shares to Be Sold" in Schedule I hereto. The Common Shares, par
value $0.0125 per share of the Company, including the Shares, are hereinafter
referred to as the "Common Stock."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (No. 333-118023) on
Form S-3, including a prospectus, relating to the Shares. The registration
statement as amended at the time it became effective, including the
information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act of 1933,
as amended (the "Securities Act"), is hereinafter referred to as the
"Registration Statement"; any preliminary prospectus relating to the Shares
included in the Registration Statement or filed with the Commission pursuant
to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act (the "Securities Act Regulations") being hereinafter called a
"Preliminary Prospectus"; the final prospectus relating to the Shares in the
form filed pursuant to Rule 424(b) under the Securities Act Regulations being
hereinafter referred to as the "Prospectus." Any reference herein to the
Registration Statement, a 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 or the issue date of such Preliminary Prospectus
or 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 the filing of any document under the Exchange Act after
the effective date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
1. Representations and Warranties of the Company. The
Company represents and warrants to and
agrees with the Underwriter and the Selling Shareholder that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to the
knowledge of the Company, threatened by the Commission.
(b) (i) The Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder and
(iii) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to the Underwriter furnished to the Company in writing by the Underwriter
expressly for use therein.
(c) Deloitte & Touche, whose report is included in the
Prospectus, is an independent certified public accountant with respect to
the Company and its consolidated subsidiaries within the meaning of the
Securities Act and the rules and regulations adopted by the Commission
thereunder. The financial statements of the Company and its consolidated
subsidiaries (including the related notes and supporting schedules)
included in the Registration Statement and the Prospectus present fairly
in all material respects the financial condition, results of operations
and cash flows of the entities purported to be shown thereby at the dates
and for the periods indicated and have been prepared in accordance with
United States generally accepted accounting principles applied on a
consistent basis throughout the periods indicated and conform in all
material respects with the rules and regulations adopted by the
Commission under the Securities Act; and the supporting schedules
included in the Registration Statement present fairly in all materials
respects the information required to be stated therein.
(d) The Company has been duly incorporated, is validly
existing as a corporation in good standing (including as an exempted
company) under the laws of the jurisdiction of its incorporation (good
standing meaning that it has not failed to make any required filing with
any Bermuda governmental authority or to pay any Bermuda governmental fee
or tax which would make it liable to be struck off the registrar of
companies and thereby cease to exist under the laws of Bermuda), has the
corporate power and authority to own, lease and operate its property and
to conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement, and is duly qualified
to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing or
operating of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(e) Each of AXIS Specialty Limited, AXIS Specialty Europe
Limited, AXIS Re Limited, AXIS Specialty Insurance Company, AXIS
Reinsurance Company, AXIS Surplus Insurance Company, AXIS Specialty U.S.
Holdings, Inc. and AXIS Specialty Holdings Ireland Limited (hereafter,
the "Designated Subsidiaries") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation (good standing meaning, with respect to
each of AXIS Specialty Limited, AXIS Specialty Europe Limited, AXIS Re
Limited and AXIS Specialty Holdings Ireland Limited, that each has not
failed to make any required filing with any government authority of the
jurisdiction of its incorporation or to pay any government fee or tax in
its jurisdiction of incorporation which would make it liable to be struck
off the register of companies and thereby cease to exist under the laws
of its jurisdiction of incorporation), has the corporate power and
authority to own, lease and operate its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing (good standing meaning, with respect to
each of AXIS Specialty Limited, AXIS Specialty Europe Limited, AXIS Re
Limited and AXIS Specialty Holdings Ireland Limited, that each has not
failed to make any required filing with any government authority of the
jurisdiction of its incorporation or to pay any government fee or tax in
its jurisdiction of incorporation which would make it liable to be struck
off the register of companies and thereby cease to exist under the laws
of its jurisdiction of incorporation) in each jurisdiction in which the
conduct of its business or its ownership or leasing or operating of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock of each Designated
Subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable (non-assessable meaning, with respect to each of
AXIS Specialty Limited, AXIS Specialty Europe Limited, AXIS Re Limited
and AXIS Specialty Holdings Ireland Limited, that no further sums are
payable with respect to the holding of such shares and the member shall
not be bound by an alteration (unless it agrees in writing to such
alteration) in the memorandum of association or the bye-laws or
equivalent organizational documents of such Designated Subsidiary after
the date upon which it became a member if and so far as the alteration
requires such member to take or subscribe for additional shares or in any
way increases its liability to contribute to the share capital of, or
otherwise pay money to, such Designated Subsidiary) and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities, claims, preemptive rights or restrictions upon
voting or transfer except, in the case of restrictions on transfer, as
described in the Prospectus. Except for AXIS Specialty U.S. Services,
Inc., AXIS Specialty UK Limited, AXIS Specialty UK Holdings Limited,
Combined Specialty Group, Inc. and Fireman's Fund Insurance Company of
Wisconsin each of which is immaterial and not a "significant subsidiary"
of the Company as that term is defined in Rule 1-02(w) of Regulation S-X
of the rules and regulations of the Commission under the Securities Act,
the Designated Subsidiaries are the only subsidiaries of the Company.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus.
(h) The capitalization of the Company as of December 31,
2004 conforms in all material respects to the description thereof in the
Prospectus. All of the outstanding shares of Common Stock (including the
Shares to be sold by the Selling Shareholder) have been duly authorized
and are validly issued, fully paid and non-assessable and were not issued
in violation of any preemptive or similar rights.
(i) None of the execution and delivery by the Company of, or
the performance by the Company of its obligations under, this Agreement,
nor the consummation of the transactions contemplated hereby, will (i)
contravene or result in a breach or violation of, or constitute a default
under, (A) the charter, memorandum of association, bye-laws or other
governing documents of the Company or any of its subsidiaries, (B) any
provision of applicable law or any regulation, rule, judgment, order or
decree of any governmental body, agency or court having jurisdiction over
the Company or any subsidiary or any of their respective properties or
(C) any agreement, indenture or other instrument binding upon the Company
or any of its subsidiaries or to which the Company or any of its
subsidiaries is a party or to which any of their respective properties
are subject, or (ii) result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property of the Company or any of
its subsidiaries, except (other than with respect to clause (i)(A)) as
would not, individually or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Except for
permits, consents, approvals and similar authorizations required by the
securities or "Blue Sky" or insurance laws of certain jurisdictions in
connection with the offer and sale of the Shares and permits, consents,
approvals and authorizations which have been obtained, no permit,
consent, approval, authorization or order of any court, governmental
agency or body or financial institution is required in connection with
the consummation of the transactions contemplated by this Agreement.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement). Subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) the Company and its
subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in
the ordinary course of business; (ii) the Company has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt
of the Company and its subsidiaries, except in each case as described in
the Prospectus.
(k) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject that would reasonably
be expected to have, individually or in the aggregate, a material adverse
effect on the Company and its subsidiaries, taken as a whole, or that are
required to be described in the Registration Statement or the Prospectus
and are not so described, or any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act, complied
when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(m) The Company is not, and after giving effect to the
offering and sale of the Shares will not be, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(n) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
(o) On the date hereof and upon issuance of the Shares, each
of the Company and its Designated Subsidiaries is and will be solvent and
able to pay its liabilities as they become due.
(p) Each of the Company and its Designated Subsidiaries has
(i) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has filed all reports, documents
and other information required to be filed pursuant to the applicable
laws of Bermuda, Ireland, the United Kingdom, Switzerland and the United
States (and any State thereof) and all other relevant jurisdictions as is
necessary to engage in the business currently conducted by it in the
manner described in the Prospectus (each, an "Authorization"), except
where the failure, individually or in the aggregate, to file such report,
document or information would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, (ii) fulfilled and
performed all obligations necessary to maintain each Authorization,
except where the failure to fulfill or perform such obligation,
individually or in the aggregate, would not have a material adverse
effect on the Company and its subsidiaries taken as a whole and (iii) no
knowledge of any pending or threatened action, suit, proceeding or
investigation that would reasonably be expected to result in the
revocation, termination, material adverse modification, material adverse
impairment or suspension of any Authorization. All such Authorizations
are valid and in full force and effect and the Company and the Designated
Subsidiaries are in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with
respect thereto, except where the failure to comply, individually or in
the aggregate, would not have a material adverse effect on the Company
and its subsidiaries taken as whole. Except as otherwise described in or
contemplated by the Prospectus, the Company has not received any order or
decree from any insurance regulatory agency or body impairing,
restricting or prohibiting the payment of dividends by any Designated
Subsidiary to its parent and has not otherwise agreed to any such
impairment, restriction or prohibition.
(q) Each of the Company and its subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of Section
302 of the United States Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and such
regulations and published interpretations) in which employees of the
Company and its subsidiaries are eligible to participate and each such
plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations. The Company and its subsidiaries have not incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other than
for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(r) The Company has no knowledge of any threatened or
pending downgrading of any of its or its Designated Subsidiaries
claims-paying ability rating by A.M. Best Company, Inc. or Standard &
Poor's Ratings Service, a Division of The McGraw-Hill Companies, Inc.,
the only "nationally recognized statistical rating organizations," as
such term is defined for purposes of Rule 463(g)(2) ability under the
Securities Act, which currently rate the claims-paying ability of the
Company or any of the Designated Subsidiaries.
(s) The Shares have been approved for listing on the New
York Stock Exchange.
(t) The Company and each of the Designated Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) Neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights
of others with respect to any material patents, patent rights, licenses,
inventions, copyrights, technology, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by them in connection with the business now
operated by them, which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
affect on the Company and its subsidiaries, taken as a whole.
(v) None of the Company or any of its Designated
Subsidiaries (i) is in violation of its charter, memorandum of
association or bye-laws or articles of association or other governing
documents, (ii) is in default and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition
contained in any agreement (including any retrocessional or reinsurance
treaty, contract or arrangement), indenture or other instrument to which
it is a party or by which it is bound or to which any of its properties
is subject, except for any such defaults that would not, individually or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or (iii) is in violation of any insurance
law, rule or regulation to which it or its property is subject, except
for any such violations that would not, individually or in the aggregate,
have a material adverse effect on the Company and its subsidiaries taken
as a whole. Except as disclosed in the Prospectus, all retrocessional and
reinsurance treaties, contracts and arrangements to which any of the
Company or its subsidiaries are a party as the reinsured or insured are
in full force and effect except where the failure to be in full force and
effect would not, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
None of the Company or any of its Designated Subsidiaries has received
any notice or otherwise has knowledge that any of the other parties to
such retrocessional and reinsurance treaties, contracts, agreements or
arrangements intends not to perform, or will be unable to perform, in any
material respect such retrocessional or reinsurance treaty, contract,
agreement or arrangement, except where such non-performance would not,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(w) None of the Company's subsidiaries is currently
prohibited, directly or indirectly, from paying any dividends to the
Company or from making any other distribution on such subsidiary's
capital stock, except as described in or contemplated by the Prospectus.
(x) Neither the Underwriter nor any subsequent purchaser of
the Shares (other than any purchaser resident in Bermuda for Bermuda
exchange control purposes) is subject to any stamp duty, excise or
similar tax imposed in Bermuda in connection with the offering, sale or
purchase of the Shares.
(y) There are no currency exchange control laws or
withholding taxes of Bermuda that would be applicable to the payment of
dividends on the Shares by the Company (other than to residents of
Bermuda for Bermuda exchange control purposes).
(z) Any tax returns required to be filed in any jurisdiction
by the Company or any of its subsidiaries other than AXIS Reinsurance
Company, AXIS Surplus Insurance Company, AXIS Specialty Insurance Company
and Fireman's Fund Insurance Company of Wisconsin (collectively, the
"U.S. Insurance Companies") have been accurately prepared and timely
filed and any taxes, including any withholding taxes, excise taxes, sales
taxes, use taxes, penalties and interest, assessments and fees and other
charges due or claimed to be due from such entities, have been paid,
other than any of those being contested in good faith and for which
adequate reserves have been provided or any of those currently payable
without penalty or interest and (ii) to the Company's knowledge, any tax
return required to be filed in any jurisdiction by any of the U.S.
Insurance Companies has been accurately prepared and timely filed and any
taxes, including any withholding taxes, excise taxes, sales taxes, use
taxes, penalties and interest, assessments and fees and other charges due
or claimed to be due from such entities have been paid, other than any of
those being contested in good faith and for which adequate reserves have
been provided or any of those currently payable without penalty or
interest, in either case except to the extent that the failure to so file
or pay would not result in a material adverse effect on the Company and
its subsidiaries, taken as a whole, and in either case other than those
tax returns that would be required to be filed or taxes that would be
payable by the Company or any of its subsidiaries if (A) any of them was
characterized as a "personal holding company" as defined in Section 542
of the Code (as defined below), (B) any of them other than the U.S.
Insurance Companies, AXIS Specialty U.S. Holdings, Inc. or AXIS Specialty
U.S. Services, Inc. (collectively the "U.S. Subsidiaries") was
characterized as engaged in a U.S. trade or business, (C) any of them
other than AXIS Specialty UK Limited, AXIS Specialty UK Holdings Limited,
AXIS Specialty Europe Limited or AXIS Specialty Holdings Ireland Limited
(the "U.K./Irish Subsidiaries") was characterized as resident, managed
and controlled or carrying on a trade through a branch or agency in the
United Kingdom or (D) any of them other than AXIS Specialty Europe
Limited, AXIS Re Limited or AXIS Specialty Holdings Ireland Limited (the
"Irish Subsidiaries") was characterized as resident, managed and
controlled or carrying on a trade through a branch or agency in Ireland.
No deficiency assessment with respect to a proposed adjustment of the
Company's or any of its subsidiaries' taxes is pending or, to the
Company's knowledge, threatened. There is no material tax lien, whether
imposed by any federal, state, or other taxing authority, outstanding
against the assets, properties or business of the Company or any of its
subsidiaries.
(aa) Based upon and subject to the assumptions and
qualifications set forth in the Prospectus under the heading "Material
Tax Considerations," the Company does not believe: (i) that either the
Company or any of its subsidiaries currently should be, or upon the sale
of the Shares herein contemplated should be (A) treated as a "passive
foreign investment company" as defined in Section 1297(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) characterized as a
"personal holding company" as defined in Section 542 of the Code, (C)
except for the U.S. Subsidiaries, considered to be engaged in a trade or
business within the United States for purposes of section 864(b) of the
Code, (D) except for the U.K./Irish Subsidiaries, characterized as
resident, managed or controlled or carrying on a trade through a branch
or agency in the United Kingdom or (E) except for the Irish Subsidiaries,
characterized as resident, managed or controlled or carrying on a trade
through a branch or agency in Ireland; or (ii) that any person who owns
shares of the Company directly or indirectly through foreign entities
should be treated as owning (directly, indirectly through foreign
entities or by attribution pursuant to Section 958(b) of the Code) 10
percent or more of the total voting power of the Company or any of its
foreign subsidiaries.
(bb) AXIS Specialty Limited, AXIS Re Limited and AXIS
Specialty Europe Limited intend to operate in a manner that is intended
to ensure that the related person insurance income of each of AXIS
Specialty Limited, AXIS Re Limited or AXIS Specialty Europe Limited does
not equal or exceed 20% of each such company's gross insurance income for
any taxable year in the foreseeable future.
2. Representations and Warranties of the Selling
Shareholder. The Selling Shareholder represents and warrants to and agrees
with the Underwriter and the Company that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.
(b) Neither the execution and delivery by the Selling
Shareholder of, or the performance by the Selling Shareholder of its
obligations under, this Agreement nor the consummation of the
transactions contemplated hereby or thereby, will (i) contravene or
result in a breach or violation of, or constitute a default under, (A)
the memorandum of association, bye-laws or other governing documents of
the Selling Shareholder (if the Selling Shareholder is not a natural
person), (B) any provision of applicable law or any regulation, rule,
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Selling Shareholder or any of its properties
or (C) any agreement, indenture or other instrument binding upon the
Selling Shareholder or to which the Selling Shareholder is a party or to
which any of its properties are subject, or (ii) result in the creation
or imposition of any lien, charge, claim or encumbrance upon any property
of the Selling Shareholder, except (other than with respect to clause
(i)(A)) as would not, individually or in the aggregate, have a material
adverse effect on the ability of the Selling Shareholder to consummate
the transactions contemplated hereby and thereby. Except for permits,
consents, approvals and similar authorizations required by the securities
or "Blue Sky" or insurance securities laws of certain jurisdictions in
connection with the offer and sale of the Shares and permits, consents,
approvals and authorizations which have been obtained, no permit,
consent, approval, authorization or order of any court, governmental
agency or body or financial institution is required in connection with
the consummation by the Selling Shareholder of the transactions
contemplated by this Agreement.
(c) The Selling Shareholder is, and on the Closing Date will
be, the registered holder of a certificated security representing, and/or
has and will have a "security entitlement" within the meaning of Section
8-102(a)(7) of the New York Uniform Commercial Code (the "NYUCC") in
respect of, the Shares to be sold by the Selling Shareholder, free and
clear of all security interests, claims, liens, equities or other
encumbrances, and the Selling Shareholder's entry into this Agreement and
the Selling Shareholder's sale, transfer and delivery of the Shares to be
sold by the Selling Shareholder have been duly authorized by all
necessary organizational action, if any, and the Selling Shareholder has
the legal right and power to enter into this Agreement and to sell,
transfer and deliver the Shares to be sold by the Selling Shareholder or
a security entitlement in respect of such Shares. The Shares to be sold
by the Selling Shareholder are not subject to any preemptive or similar
rights, and the Selling Shareholder has all rights in and full power and
authority to transfer such Shares.
(d) Upon delivery in New York of any certificate or
certificates representing the Shares to be sold by the Selling
Shareholder, properly indorsed in blank by an effective indorsement, to
either (i) Cede & Co. ("Cede") or such other nominee as may be designated
by The Depository Trust Company ("DTC") or (ii) the Underwriter
purchasing such Shares, and upon payment for such Shares as contemplated
by this Agreement, Cede (or such other nominee) or the Underwriter, as
the case may be, will acquire all of the Selling Shareholder's rights in
such Shares that the Selling Shareholder has or has the power to
transfer, free of any adverse claim within the meaning of Section
8-102(a)(1) of the NYUCC, provided that Cede (or such other nominee) or
the Underwriter, as the case may be, has no notice of any adverse claim
(within the meaning of Section 8-105 of the NYUCC) to such Shares.
Assuming the proper execution of an entitlement order (within the meaning
of Section 8-102(a)(8) of the NYUCC) given by the Selling Shareholder to
the securities intermediary (within the meaning of Section 8-102(a)(14)
of the NYUCC) maintaining the security entitlement for the Selling
Shareholder with respect to the Shares to be sold by the Selling
Shareholder, and assuming that as a result of the execution of such order
a security entitlement with respect to such Shares is properly credited
at a securities intermediary (within the meaning of Section 8-102(a)(14)
of the NYUCC) to the account of the Underwriter purchasing such Shares,
upon payment for such Shares as contemplated by this Agreement, then no
action based on an adverse claim within the meaning of Section 8-102 of
the NYUCC may be asserted against the Underwriter with respect to such
security entitlement to the extent that (i) the Underwriter had no notice
of such adverse claim within the meaning of Section 8-105 of the NYUCC
and (ii) the Underwriter is the entitlement holder (within the meaning of
Section 8-102(a)(8) of the NYUCC) with respect to the securities account
to which such security entitlement is credited.
(e) (i) The Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (ii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any 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 that the representations and
warranties set forth in this paragraph 2(e) are limited to statements or
omissions made in reliance upon information relating to the Selling
Shareholder furnished to the Company in writing by the Selling
Shareholder expressly for use in the Registration Statement, the
Prospectus or any amendments or supplements thereto.
3. Agreements to Sell and Purchase. (a) The Selling
Shareholder hereby agrees to sell to the Underwriter, and the Underwriter,
upon the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agrees to purchase from the
Selling Shareholder at $30.02 a share (the "Purchase Price") the Shares.
The Selling Shareholder hereby agrees that, without the
prior written consent of the Underwriter, it will not, during the period
ending 45 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
The restrictions contained in the preceding paragraph shall
not apply to the Shares to be sold hereunder.
(b) The Underwriter represents, warrants and undertakes,
that: (i) it has not offered or sold and, prior to the expiry of a period
of six months from the Closing Date, will not offer or sell any Shares to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their businesses or otherwise
in circumstances which have not resulted and will not result in an offer
to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, as amended; (ii) it has only
communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in
investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000 (the "FSMA")) received by it in connection
with the issue or sale of any Shares in circumstances in which section
21(1) of the FSMA does not apply; and (iii) it has complied and will
comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Shares in, from or otherwise
involving the United Kingdom.
(c) No Advisory or Fiduciary Relationship. The Company and
the Selling Shareholder acknowledges and agrees that (i) the purchase and
sale of the Shares pursuant to this Agreement, including the
determination of the public offering price of the Shares and any related
discounts and commissions, is an arm's-length commercial transaction
between the Company and the Selling Shareholder, on the one hand, and the
Underwriter, on the other hand, (ii) in connection with the offering
contemplated hereby and the process leading to such transaction the
Underwriter is and has been acting solely as a principal and is not the
agent or fiduciary of the Company, the Selling Shareholder, or their
respective stockholders, creditors, employees or any other party, (iii)
the Underwriter has not assumed nor will it assume an advisory or
fiduciary responsibility in favor of the Company or the Selling
Shareholder with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has
advised or is currently advising the Company or the Selling Shareholder
on other matters) and the Underwriter has no obligation to the Company or
the Selling Shareholder with respect to the offering contemplated hereby
except the obligations expressly set forth in this Agreement, (iv) the
Underwriter and its respective affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of the
Company or the Selling Shareholder, and (v) the Underwriter has not
provided any legal, accounting, regulatory or tax advice with respect to
the offering contemplated hereby and the Company and the Selling
Shareholder has consulted its own legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.
4. Offering by the Underwriter. The Underwriter shall offer
the Shares for resale as set forth in the Prospectus.
5. Payment and Delivery. Payment for the Shares to be sold
by the Selling Shareholder shall be made to the Selling Shareholder in Federal
or other funds immediately available in New York City against delivery of the
Shares for the account of the Underwriter at 10:00 a.m., New York City time,
on August 23, 2005, or at such other time on the same or such other date, not
later than August 30, 2005, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "Closing Date."
The Shares shall be registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The Shares shall be delivered to you on the
Closing Date for your account, with any transfer taxes payable in connection
with the transfer of the Shares to you duly paid by the Selling Shareholder,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriter's Obligations. The
obligations of the Selling Shareholder to sell the Shares to the Underwriter
and the obligation of the Underwriter to purchase and pay for the Shares on
the Closing Date are subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the Closing Date,
to the accuracy of the representations and warranties on the part of the
Selling Shareholder contained herein as of the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the accuracy of the statements of the Selling
Shareholder made in any certificates pursuant to the provisions hereof, to the
performance by each of the Company and the Selling Shareholder of its
respective obligations hereunder and to the following additional conditions.
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's or any Designated Subsidiary's
securities or in the Company's or any Designated Subsidiary's
financial strength or claims paying ability rating by any
"nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriter shall have received on the Closing Date
(i) a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 6(a)(i) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date and (ii) a certificate, dated the
Closing Date and signed by or on behalf of the Selling Shareholder, to
the effect that the representations and warranties of the Selling
Shareholder contained in this Agreement are true and correct as of the
Closing Date and that the Selling Shareholder has complied with all of
the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date. The
officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(c) The Underwriter shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, outside counsel
for the Company, dated the Closing Date, substantially to the effect set
forth in Exhibit A hereto.
(d) The Underwriter shall have received on the Closing Date
an opinion of Conyers Dill & Pearman, special Bermuda counsel for the
Company, dated the Closing Date, substantially to the effect set forth in
Exhibit B hereto.
(e) The Underwriter shall have received on the Closing Date
an opinion of Gibson, Dunn & Crutcher LLP, special counsel for the
Selling Shareholder, dated the Closing Date, substantially to the effect
set forth in Exhibit C hereto.
(f) The Underwriter shall have received on the Closing Date
opinions of each of William Fry and William Fry Tax Advisers Limited,
special Irish counsel for the Company, dated the Closing Date,
substantially to the effect set forth in Exhibits D-1 and D-2 hereto.
(g) The Underwriter shall have received on the Closing Date
two opinions of LeBoeuf, Lamb, Greene & MacRae L.L.P., special United
States counsel for the Company, dated the Closing Date, substantially to
the effect set forth in Exhibits E-1 and E-2 hereto.
(h) The Underwriter shall have received on the Closing Date
an opinion of Bar & Karrer, special Swiss counsel for the Company, dated
the Closing Date, substantially to the effect set forth in Exhibit F
hereto.
(i) The Underwriter shall have received on the Closing Date
an opinion of Carol S. Rivers, Esq., General Counsel for the Company,
dated the Closing Date, substantially to the effect set forth in Exhibit
G hereto.
(j) The Underwriter shall have received on the Closing Date
(i) an opinion of Simpson Thacher & Bartlett LLP, counsel for the
Underwriter, and (ii) a letter from Simpson Thacher & Bartlett LLP,
counsel for the Underwriter, dated the Closing Date, covering the matters
referred to in paragraph 2 and the last paragraph of Exhibit A.
(k) The Underwriter shall have received, on each of a date
prior to the Closing Date and the Closing Date, a letter dated as of a
date prior to the Closing Date or the Closing Date, as the case may be,
in form and substance satisfactory to the Underwriter, from Deloitte &
Touche, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
With respect to Section 6(e) above, counsel to the Selling
Shareholder may rely upon with respect to factual matters and to the extent
such counsel deems appropriate, upon the representations of the Selling
Shareholder contained herein and in other documents and instruments; provided
that copies of any such other documents and instruments shall be delivered to
you and shall be in form and substance satisfactory to your counsel.
The opinions of Skadden, Arps, Slate, Meagher & Flom LLP,
Conyers Dill & Pearman, Gibson, Dunn & Crutcher LLP, William Fry, William Fry
Tax Advisers Limited, LeBoeuf, Lamb, Greene & MacRae L.L.P., Bar & Karrer and
Carol S. Rivers, Esq. described in Sections 6(c), 6(d) 6(e), 6(f), 6(g), 6(h)
and 6(i) above shall be rendered to the Underwriter at the request of the
Company or the Selling Shareholder, as the case may be, and shall so state
therein.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriter herein contained, the Company covenants with the
Underwriter as follows:
(a) To furnish to you, without charge, one signed copy of
the Registration Statement and all amendments thereto (including exhibits
thereto) and to furnish to you in New York City, without charge, prior to
10:00 a.m. New York City time on the business day next succeeding the
date of this Agreement and during the period mentioned in Section 7(c)
below, as many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file with
the Commission within the applicable period specified in Rule 424(b)
under the Securities Act any prospectus required to be filed pursuant to
such Rule.
(c) If, during such period after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriter the Prospectus is required by law to be delivered in
connection with sales by the Underwriter or a dealer, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriter, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriter and to the
dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to material
taxation or service of process in suits, other than those arising out of
the offering or sale of the Shares, in any jurisdiction where it is not
now so subject.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending December 31, 2005 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
agrees to pay or cause to be paid: (i) the fees, disbursements and expenses of
the counsel for the Company in connection with the registration and delivery
of the Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, any
Preliminary Prospectus, the Prospectus and amendments and supplements to any
of the foregoing, excluding all printing costs associated therewith and the
mailing and delivering of copies thereof to the Underwriter and dealers, in
the quantities hereinabove specified, (ii) one half of the fees, disbursements
and expenses of the Company's accountants in connection with the registration
and delivery of the Shares under the Securities Act, (iii) the costs and
charges of any transfer agent, registrar or depository and (iv) all other
costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section.
Whether or not the transactions contemplated in this Agreement are consummated
or this Agreement is terminated, the Selling Shareholder agrees to pay or
cause to be paid: (A) the fees, disbursements and expenses of the counsel for
the Selling Shareholder in connection with the registration and delivery of
the Shares under the Securities Act and all printing costs associated with the
Prospectus and amendments and supplements to any of the foregoing and the
mailing and delivering of copies thereof to the Underwriter and dealers, in
the quantities hereinabove specified, (B) one half of the fees, disbursements
and expenses of the Company's accountants in connection with the registration
and delivery of the Shares under the Securities Act, (C) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriter, including any transfer or other taxes payable thereon, other than
costs and expenses paid pursuant to clause (iii) above, (D) the cost of
printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities laws
and all expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum, (E) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriter incurred in
connection with the review and qualification of the offering of the Shares by
the National Association of Securities Dealers, Inc. (such fees and
disbursements of counsel, together with fees and disbursements of counsel
pursuant to clause (D) above, not to exceed $30,000), (F) the document
production charges and expenses associated with printing this Agreement and
(G) all other costs and expenses incident to the performance of the
obligations of the Selling Shareholder hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 9 entitled "Indemnity and Contribution", the
last paragraph of Section 11 below and Section 14(d), the Underwriter will pay
all of its costs and expenses, including fees and disbursements of its
counsel, stock transfer taxes payable on resale of any of the Shares by it and
any advertising expenses connected with any offers it may make.
9. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless the Underwriter, each person, if any, who controls
the Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, and each affiliate of the Underwriter
within the meaning of Rule 405 under the Securities Act, from and against any
and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any Preliminary Prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), 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 not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Underwriter furnished to the Company in writing by
the Underwriter expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any Preliminary Prospectus shall
not inure to the benefit of the Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling the Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of the Underwriter to such
person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless the failure to
send or give such Prospectus is the result of noncompliance by the Company
with Section 7(a) hereof.
(b) The Selling Shareholder agrees to indemnify and hold
harmless the Underwriter, each person, if any, who controls the
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, and each affiliate of the Underwriter
within the meaning of Rule 405 under the Securities Act, from and against
any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any Preliminary
Prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), 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
not misleading, but only with reference to information relating to the
Selling Shareholder furnished in writing by or on behalf of the Selling
Shareholder expressly for use in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendments or supplements
thereto; provided, however, that the foregoing indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of
the Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares, or any person controlling the
Underwriter, if a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of the Underwriter to such
person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless the
failure to send or give such Prospectus is the result of noncompliance by
the Company with Section 7(a) hereof. The liability of the Selling
Shareholder under the indemnity agreement contained in this paragraph
shall be limited to an amount equal to the aggregate Purchase Price of
the Shares sold by the Selling Shareholder under this Agreement.
(c) The Underwriter agrees to indemnify and hold harmless
the Company, the Selling Shareholder, the directors of the Company, the
officers of the Company who sign the Registration Statement and each
person, if any, who controls the Company or the Selling Shareholder
within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any Preliminary Prospectus or the
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), 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 not
misleading, but only with reference to information relating to the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 9(a), 9(b) or 9(c),
such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying
party may designate in such proceeding and shall pay the reasonable fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with
any proceeding or related proceedings in the same jurisdiction, be liable
for (i) the fees and expenses of more than one separate firm (in addition
to any local counsel) for the Underwriter and all persons, if any, who
control the Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or who are affiliates of
the Underwriter within the meaning of Rule 405 under the Securities Act,
(ii) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (iii) the fees and
expenses of more than one separate firm (in addition to any local
counsel) for the Selling Shareholder and all persons, if any, who control
the Selling Shareholder within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firm for the Underwriter and its control
persons and affiliates, such firm shall be designated in writing by the
Underwriter. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm
shall be designated in writing by the Company. In the case of any such
separate firm for the Selling Shareholder and such control persons of the
Selling Shareholder, such firm shall be designated in writing by the
Selling Shareholder. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement
or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(e) To the extent the indemnification provided for in
Section 9(a), 9(b) or 9(c) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified
party or parties on the other hand from the sale of the Shares or (ii) if
the allocation provided by clause 9(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 9(e)(i) above but also the
relative fault of the indemnifying party or parties on the one hand and
of the indemnified party or parties on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholder
on the one hand and the Underwriter on the other hand in connection with
the sale of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the sale of the Shares (before
deducting expenses) received by the Company and the Selling Shareholder
and the total discounts and commissions received by the Underwriter in
any resale of the Shares bear to the aggregate offering price of the
Shares in such resale. The relative fault of the Company, the Selling
Shareholder and the Underwriter 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, the Selling
Shareholder or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The liability of the Selling Shareholder
under the contribution agreement contained in this paragraph shall be
limited to an amount equal to the aggregate Purchase Price of the Shares
sold by the Selling Shareholder under this Agreement.
(f) The Company, the Selling Shareholder and the Underwriter
agree that it would not be just or equitable if contribution pursuant to
this Section 9 were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable
considerations referred to in Section 9(e). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, 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 Section 9, the Underwriter shall
not be required to contribute any amount in excess of the amount by which
the total price at which the Shares resold by it exceeds the amount of
any damages that the 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements
of the Company and the Selling Shareholder contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on
behalf of the Underwriter, any person controlling the Underwriter or any
affiliate of the Underwriter, the Selling Shareholder or any person
controlling the Selling Shareholder, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
10. Termination. The Underwriter may terminate this
Agreement by notice given to the Company, if after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on, or by, as the case may be, any
of the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the
United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State or Bermuda
authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets, or any calamity or crisis
that, in your judgment, is material and adverse and which, singly or together
with any other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of
the Shares on the terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Default. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
(a) If this Agreement shall be terminated by the Underwriter
because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Underwriter for all
out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by the Underwriter in connection with this
Agreement or the offering contemplated hereunder.
(b) If this Agreement shall be terminated by the Underwriter
because of any failure or refusal on the part of the Selling Shareholder
to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Selling Shareholder shall be unable
to perform its obligations under the Agreement, the Selling Shareholder
will reimburse the Underwriter for all out-of-pocket expenses (including
the fees and disbursements of its counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering
contemplated thereby.
12. Successors and Assigns. This Agreement shall be binding
upon and inure solely to the benefit of, the Underwriter, the Company and the
Selling Shareholder, and their respective successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement.
No purchaser of any of the Shares from the Underwriter shall be deemed a
successor or assign solely by reason of such purchase.
13. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
14. Applicable Law; Submission to Jurisdiction; Appointment
of Agent for Service; Judgment Currency.
(a) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
(b) The Company and the Selling Shareholder irrevocably
submit to the non-exclusive jurisdiction of any New York State or United
States Federal court sitting in The City of New York over any suit,
action or proceeding arising out of or relating to this Agreement, the
Prospectus, the Registration Statement or the offering of the Shares. The
Company irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of
any such suit, action or proceeding brought in such a court and any claim
that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. To the extent the Company has or
hereafter may acquire any immunity from the jurisdiction of any court or
from any legal process with respect to itself or its property, it
irrevocably waives, to the fullest extent permitted by law, such immunity
in respect of any such suit, action or proceeding.
(c) The Company and the Selling Shareholder hereby
irrevocably appoint CT Corporation System, with offices at 111 Eighth
Avenue, New York, NY 10011, as its agent for service of process in any
suit, action or proceeding described in the preceding paragraph. The
Company and the Selling Shareholder agree that service of process in any
such suit, action or proceeding may be made upon it at the office of
their agent. The Company and the Selling Shareholder waive, to the
fullest extent permitted by law, any other requirements of or objections
to personal jurisdiction with respect thereto. The Company and the
Selling Shareholder represent and warrant that its agent has agreed to
act as agent for service of process, and each 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.
(d) In respect of any judgment or order given or made for
any amount due hereunder that is expressed and paid in currency (the
"judgment currency") other than United States dollars, the party against
whom such judgment or order has been given or made will indemnify each
party in whose favor such judgment or order has been given or made (the
"Indemnitee") against any loss incurred by the Indemnitee as a result of
any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the judgment currency for the
purpose of such judgment or order and (ii) the rate of exchange at which
the Indemnitee is able to purchase United States dollars with the amount
of the judgment currency actually received by such Indemnitee. The
foregoing indemnity shall constitute a separate and independent
obligation of the Company, the Selling Shareholder and the Underwriter
and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid. The term "rate of exchange" shall include
any reasonable premiums and costs of exchange payable in connection with
the purchase of or conversion into United States dollars.
15. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
AXIS CAPITAL HOLDINGS LIMITED
By: /s/ Andrew Cook
----------------------------------------
Name: Andrew Cook
Title: Chief Financial Officer
MARSH & MCLENNAN RISK CAPITAL HOLDINGS, LTD.
By: /s/ Mark J. Dallara
----------------------------------------
Name: Mark J. Dallara
Title: Secretary
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: /s/ Joseph E. (Jeff) Consolino
----------------------------------------------
Name: Joseph E. (Jeff) Consolino
Title: Managing Director
SCHEDULE I
Selling Shareholder Number of Shares
To Be Sold
Marsh & McLennan Risk Capital Holdings, Ltd................... 1,850,000
Total:.............................................. 1,850,000
=========
EXHIBIT A
[FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
EXHIBIT B
[FORM OF OPINION OF CONYERS DILL & PEARMAN]
EXHIBIT C
[FORM OF OPINION OF GIBSON, DUNN & CRUTCHER LLP]
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Selling Shareholder.
2. Upon delivery to the Underwriter in the State of New York as
provided in the Underwriting Agreement of certificates representing the
aggregate number of Shares being sold by the Selling Stockholder in accordance
with the provisions of the Underwriting Agreement, duly indorsed to the
Underwriter or in blank or accompanied by a duly executed stock power relating
to such Shares, and payment to the Selling Shareholder, as provided in the
Underwriting Agreement, of the purchase price set forth in the Underwriting
Agreement, and assuming that the Underwriter does not have notice of any
adverse claim to the Shares, the Underwriter will acquire title to such Shares
free of any adverse claim. All terms used in this paragraph defined in or by
reference in Article 8 of the Uniform Commercial Code of the State of New York
are used herein as so defined.
3. Such Selling Shareholder has the legal right and power, and all
authorization and approval required by law, to enter into the Underwriting
Agreement and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder or a security entitlement in respect of such Shares.
EXHIBIT D
[FORMS OF OPINIONS OF WILLIAM FRY AND
WILLIAM FRY TAX ADVISERS LIMITED]
EXHIBIT E
[FORMS OF OPINIONS OF LEBOEUF, LAMB, GREENE & MACRAE L.L.P.]
EXHIBIT F
[FORM OF OPINION OF BAR & KARRER]
EXHIBIT G
[FORM OF OPINION OF CAROL S. RIVERS, ESQ.]