EXHIBIT 1.1
Markel Corporation
Common Shares
Underwriting Agreement
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February 21, 2001
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time Markel Corporation, a Virginia corporation (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 Common Shares, no par value (the
"Shares"), specified in Schedule II to such Pricing Agreement (with respect to
such Pricing Agreement, the "Firm Company 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"). In
addition, the shareholders of the Company named in Annex I hereto (the "Selling
Shareholders") propose to enter into one or more Pricing Agreements to sell to
the Underwriters certain Shares (the "Shareholder Shares") specified in Schedule
IV to such Pricing Agreement (with respect to such Pricing Agreement, the "Firm
Shareholder Shares"). Firm Company Shares and Firm Shareholder Shares are
collectively referred to herein as the "Firm 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 or Selling Shareholders 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, the
obligation of the Selling Shareholders to 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 Company Shares, the Firm Shareholder Shares, the maximum number of
Optional Shares, if any, the initial public offering price of such Designated
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 Designated Shares, 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. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-52544 (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 (i) the Representatives
and (ii) 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, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the
offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission
(other than 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 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 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 in which it has most
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, 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
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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) 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);
(ii) 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 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 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;
(iii) 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 the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Shares or by a Selling Shareholder expressly for use in the
preparation of the answers in the Prospectus to Item 7 of Form S-3;
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(iv) Neither the Company nor any of its subsidiaries which meets the
definition of a significant subsidiary as defined in Regulation S-X (a
"Significant Subsidiary") 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; 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 (i) pursuant to the Company's employee stock purchase
plan existing on the date hereof or (ii) exercise of certain employee stock
options existing on the date hereof) or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus;
(v) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Virginia, with power and
authority (corporate and other) to own, lease and operate its properties
and conduct its business in all material respects as described in the
Prospectus; and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which its owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(vi) Each subsidiary of the Company has been duly formed and is validly
existing as a legal entity in good standing under the laws of its
jurisdiction of formation with power and authority (corporate and other) to
own, lease and operate its properties and to conduct its business in all
material respects as described in the Prospectus; each subsidiary of the
Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or lease properties or conducts any
business so as to require qualification or is subject to no material
liability or disability by reason of the failure to be so qualified in any
jurisdiction;
(vii) The Company has an authorized capitalization as set forth in the
Prospectus, all of the issued and outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully
paid and non-assessable; all of the issued and outstanding shares of
capital stock of each Significant Subsidiary of the Company 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;
(viii) The Shares have been duly and validly authorized, and, when the
Firm Company Shares are issued and the Firm Shares are 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 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;
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(ix) The issue and sale of the Firm Company Shares and the Optional
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 is a party or by which the Company is bound or to which
any of the property or assets of the Company is subject, except in each
case, for such conflicts, breaches, violations or defaults as could not
reasonably be expected, individually or in the aggregate, to have a
material adverse effect on the financial position, shareholders' equity or
results of operations of the Company (a "Material Adverse Effect"), nor
will such action result in any violation of (i) the provisions of the
Articles of Incorporation or By-laws of the Company or (ii) any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties, except, in
the case of clause (ii), for such violations as could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Firm Company Shares and the Optional
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, 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 and such
consents, approvals, authorizations, registrations or qualifications the
failure to obtain which could not reasonably be expected to have a Material
Adverse Effect;
(x) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xi) Neither the Company nor any of its subsidiaries is (i) in
violation of its Articles of Incorporation or By-laws or (ii) in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound, except, in the case of
clause (ii), where such violation or default could not reasonably be
expected to have a Material Adverse Effect;
(xii) Each of the Company and its subsidiaries is in compliance with,
and conducts its business in conformity with, all applicable laws and
governmental regulations, except where the failure to be so in compliance
could not reasonably be expected to have a Material Adverse Effect;
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(xiii) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the stock, and under the caption "Plan of
Distribution", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects;
(xiv) 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"); and
(xv) KPMG LLP, who have certified certain financial statements of the
Company and its subsidiaries, and PricewaterhouseCoopers, who have
certified certain financial statements of Terra Nova (Bermuda) Holdings,
Ltd., are each independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder.
(b) Each of the Selling Shareholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Shareholder of this Agreement,
the Pricing Agreement, the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Firm
Shareholder Shares to be delivered by such Selling Shareholder at the Time
of Delivery, have been obtained; and such Selling Shareholder has full
right, power and authority to enter into this Agreement, the Pricing
Agreement, the Power of Attorney and the Custody Agreement and to sell,
assign, transfer and deliver the Firm Shareholder Shares to be delivered by
such Selling Shareholder at the Time of Delivery;
(ii) The sale of the Firm Shareholder Shares to be delivered by such
Selling Shareholder at the Time of Delivery and the compliance by such
Selling Shareholder with all of the provisions of this Agreement, the
Pricing Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling
Shareholder is bound or to which any of the property or assets of such
Selling Shareholder is subject, except, in each case, for such conflicts,
breaches, violations or defaults as could not reasonably be expected,
individually or in the aggregate, to have a material adverse effect on such
Selling Shareholders, nor will such action result in any violation of (i)
the provisions of the Certificate of Incorporation or By-laws of such
Selling Shareholder, if such Selling Shareholder is a corporation, the
Partnership Agreement of such Selling Shareholder, if such Selling
Shareholder is a partnership or (ii) any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Shareholder, or the property of such Selling Shareholder,
except, in the case of clause (ii), to the extent such violation would not
have a material adverse effect on such Selling Shareholder;
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(iii) Such Selling Shareholder has, and immediately prior to each Time
of Delivery (as defined in Section 4 hereof) such Selling Shareholder will
have, good and valid title to the Firm Shareholder Shares to be delivered
by such Selling Shareholder at such Time of Delivery, free and clear of all
liens, encumbrances, equities or claims; and, upon delivery of such Firm
Shareholder Shares and payment therefor pursuant hereto, good and valid
title to such Firm Shareholder Shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several Underwriters;
(iv) During the period beginning from the date of the Pricing Agreement
for such Firm Shareholder Shares and continuing to and including 90 days
after the date of the Prospectus, such Selling Shareholder shall not offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Shares or any such substantially similar securities (other than
pursuant to employee stock option plans or the contingent value rights
existing on the date of this Agreement), without your prior written
consent;
(v) Such Selling Shareholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling
Shareholder expressly for use therein, such Preliminary Prospectus and
Registration Statement did, and the Prospectus and any further amendments
or supplements to the Registration Statement and the Prospectus, when they
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 and
the rules and regulations of the Commission thereunder and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder will deliver to you prior to or at
each Time of Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof);
(viii) Certificates in negotiable form representing all of the Firm
Shareholder Shares to be sold by such Selling Shareholder at the Time of
Delivery have been placed in custody under a Custody Agreement, in the form
heretofore furnished to you (the "Custody Agreement"), duly executed and
delivered by such Selling Shareholder to DLJ Merchant Banking, Inc., as
custodian (the "Custodian"), and such Selling Shareholder has duly executed
and delivered a Power of Attorney, in the form heretofore furnished to you
(the "Power of Attorney"), appointing the persons indicated in Annex III
hereof and each of them, as such Selling Shareholder's attorneys-in-fact
(the "Attorneys-in-Fact") with authority to (i) execute and deliver this
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Agreement and the Pricing Agreement on behalf of such Selling Shareholder,
(ii) determine the purchase price to be paid by the Underwriters to the
Selling Shareholders as provided in Schedule [II] of the Pricing Agreement,
(iii) authorize the delivery of the Firm Shareholder Shares to be delivered
by such Selling Shareholder at the Time of Delivery and (iv) otherwise act
on behalf of such Selling Shareholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement; and
(ix) The Firm Shareholder Shares represented by the certificates held
in custody for such Selling Shareholder under the Custody Agreement are
subject to the interests of the Underwriters under the Pricing Agreement
and the arrangements made by such Selling Shareholder for such custody, and
the appointment by such Selling Shareholder of the Attorneys-in-Fact by the
Power of Attorney, are to that extent irrevocable; the obligations of the
Selling Shareholders hereunder and under the Pricing Agreement shall not be
terminated by operation of law, whether by the death or incapacity of any
individual Selling Shareholder or, in the case of an estate or trust, by
the death or incapacity of any executor or trustee or the termination of
such estate or trust, or in the case of a partnership or corporation, by
the dissolution of such partnership or corporation, or by the occurrence of
any other event; if any individual Selling Shareholder or any such executor
or trustee should die or become incapacitated, or if any such estate or
trust should be terminated, or if any such partnership or corporation
should be dissolved, or if any other such event should occur, before the
delivery of the Firm Shareholder Shares at the Time of Delivery,
certificates representing the Firm Shareholder Shares shall be delivered by
or on behalf of the Selling Shareholders in accordance with the terms and
conditions of this Agreement, the Pricing Agreement and the Custody
Agreements; and actions taken by the Attorneys-in-Fact pursuant to the
Powers of Attorney shall be as valid as if such death, incapacity,
termination, dissolution or other event had not occurred, regardless of
whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
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.
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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.
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 and the Selling Shareholders,
shall be delivered by or on behalf of the Company and the Selling Shareholders
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 and
the Custodian to Goldman, Sachs & Co. at least forty-eight 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 after any Time of Delivery for 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
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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;
(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 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 10:00 A.M., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with written and electronic copies of the Prospectus 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) During the period beginning from the date of the Pricing Agreement for
such Designated Shares and continuing to and including 90 days after the date of
the Prospectus, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any securities of the Company that are
substantially similar to the Designated Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent the
right to receive, Shares or any such substantially similar securities (other
than pursuant to (i) employee stock purchase plans existing on, or (ii) employee
stock option plans existing on, or (iii) the contingent value rights existing
on, the date of the Pricing Agreement for such Designated Shares) without the
prior written consent of the Representatives;
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(f) To apply the net proceeds from the sale of the Designated Shares sold
by the Company substantially in accordance with the description set forth in the
Prospectus; and not to use any such net proceeds for reserves or payments
relating to any insurance claims of Markel IInternational Limited;
(g) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay 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
(h) Upon request of any Underwriter, to furnish, or cause to be furnished,
to such Underwriter an electronic version of the Company's trade names and
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 (the "License");
provided, however, that the License shall be used solely for the purpose
described above for a period not to exceed 120 days, is granted without any fee
and may not be assigned or transferred.
6. The Company hereby covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents (including compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey(s); (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; and (vii) 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; and, without
prejudice to the rights of the Selling Shareholders under the Amended and
Restated Registration Rights Agreement, dated as of January 28, 2000, among the
parties listed on the signature pages thereto, such Selling Shareholder hereby
agrees that it will, for the benefit of the several Underwriters, pay or cause
to be paid all costs and expenses incident to the performance of such Selling
Shareholder's obligations hereunder that are not otherwise specifically provided
for in this Section, including (i) any fees and expenses of counsel for such
Selling Shareholder, provided that, up to $25,000 of reasonable fees and
disbursements of one counsel for the Selling Shareholders in connection with
their participation in the offering of the Designated Shareholder Shares will be
paid by the Company, (ii) such Selling Shareholder's pro rata share of the fees
and expenses of the Attorneys-in-Fact and the Custodian, and (iii) all expenses
and taxes incident to the sale and delivery of the Designated Shareholder Shares
to be delivered by such Selling Shareholder to the Underwriters at the Time of
Delivery. In connection with clause (iii) of the preceding sentence, Goldman,
Sachs & Co. agrees to pay New York State stock transfer tax applicable to the
sale of the Designated Shares, and each Selling Shareholder agrees to reimburse
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Goldman, Sachs & Co. for associated carrying costs if such tax payment is not
rebated on the day of payment and for any portion of such tax payment not
rebated. It is understood, however, that the Company shall bear, and the Selling
Shareholders shall not be required to pay or to reimburse the Company for, the
cost of any other matters not directly relating to the sale and purchase of the
Shares pursuant to this Agreement. 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 and of the Selling Shareholders
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 and the Selling
Shareholders shall have performed all of its and their respective 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 P.M., Washington, D.C. time, on
the date of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have furnished
to the Representatives such written opinion or opinions, dated each Time of
Delivery for such Designated Shares, with respect to the matters covered in
paragraphs (i), (iv) and (viii) of subsection (c) below, as well as such other
related matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters. As to all matters of Virginia law,
Sullivan & Cromwell may rely on the opinion of McGuireWoods LLP.
(c) McGuireWoods LLP, counsel for the Company, shall have furnished to the
Representatives their written opinions, dated each Time of Delivery for such
Designated Shares, respectively, in form and substance reasonably satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with full corporate power and authority to
own its properties and conduct its business as described in the
Prospectus as amended or supplemented;
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(ii) The Company has an authorized capitalization as set forth in
the Prospectus as amended or supplemented, and all of the issued and
outstanding shares of capital stock of the Company (including the
Designated Shares being delivered at such Time of Delivery) have been
duly and validly authorized and issued and are fully paid and
non-assessable; and the Designated Shares 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 Option (as defined in Section 3 hereof) with respect to
such Optional Shares, have been duly and validly issued and are fully
paid and non-assessable; and such Designated Shares conform to the
description thereof in the Prospectus as amended or supplemented;
(iii) This Agreement and the Pricing Agreement with respect to the
Designated Shares have been duly authorized, executed and delivered by the
Company;
(iv) The issue and sale of the Designated Shares being delivered at
such Time of Delivery and the compliance by the Company with all of the
provisions of this Agreement and the Pricing Agreement with respect to the
Designated Shares and the consummation of the transactions herein and
therein contemplated will not (i) 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 that would constitute a material contract as
described in Item 601(b)(10) of Regulation S-K known to such counsel to
which the Company is a party or by which the Company is bound or to which
any of the property or assets of the Company is subject or (ii) result in
any violation of the provisions of the Articles of Incorporation or By-laws
of the Company, except, in the case of clause (i), for such conflicts,
breaches, violations or defaults that could not reasonably be expected to
have a Material Adverse Effect; in rendering the opinion in clause (i)
hereof, such counsel may rely upon a certificate of the Company in respect
of which contracts constitute material contracts as described in Item
601(b)(10) of Regulation S-K, provided that such counsel shall state that
they believe that both you and they are justified in relying upon such
certificate;
(v) The issue and sale of the Firm Company Shares and the Optional
Shares being delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the Pricing
Agreement with respect to such Firm Company Shares and Optional Shares and
the consummation of the transactions herein and therein contemplated will
not result in a violation of any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties, except for such
conflicts, breaches, violations or defaults that could not reasonably be
expected to have a Material Adverse Effect;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Company or any of its properties is required for the
issue and sale of the Firm Company Shares and Optional Shares being
delivered at such Time of Delivery or the consummation by the Company of
the transactions contemplated by this Agreement or such Pricing Agreement,
except such as have been 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 Designated Shares by the Underwriters;
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(vii) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Shares, and under the captions "Plan of
Distribution", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects;
(viii) The Company is not an "Investment Company", as such term is
defined in the Investment Company Act;
(ix) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules and other financial data therein, as to which such counsel need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
(x) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as to
which such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder. Such counsel shall also state that, although they
are not passing upon, do not assume any responsibility for, and have not
independently verified, the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Prospectus and any
further amendments or supplements to the Prospectus made by the Company
prior to such Time of Delivery, except for those referred to in the opinion
in subsection (viii) of this Section 7(c), in the course of their review
and discussion of the contents of the Registration Statement and the
Prospectus with certain officers and employees of the Company, nothing has
come to their attention that causes them to believe that, as of its
effective date, the Registration Statement or any further amendment thereto
made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and other financial data
therein, as to which such counsel need make no statement) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial statements
and related schedules and other financial data therein, as to which such
counsel need make no statement) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the Registration
Statement or the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules and
other financial data therein, as to which such counsel need make no
statement) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration Statement required to
be filed or any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by reference or
described as required;
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(d) The respective counsel for each of the Selling Shareholders, as
indicated in Schedule II to the Pricing Agreement, each shall have furnished to
you their written opinion with respect to each of the Selling Shareholders for
whom they are acting as counsel, dated such Time of Delivery, in form and
substance reasonably satisfactory to you, to the effect that:
(i) A Power of Attorney and a Custody greement have been duly
executed and delivered by such Selling Shareholder and constitute valid and
binding agreements of such Selling Shareholder enforceable in accordance
with their terms;
(ii) Each of this Agreement and the Pricing Agreement has been duly
executed and delivered by or on behalf of such Selling Shareholder; and the
sale of the Firm Shareholder Shares being delivered by such Selling
Shareholder at such Time of Delivery and the compliance by such Selling
Shareholder with all of the provisions of this Agreement, the Pricing
Agreement, the Power of Attorney and the Custody Agreement with respect to
such Firm Shareholder Shares and the consummation of the transactions
herein and therein contemplated will not result in any violation of the
provisions of the Certificate of Incorporation or By-laws of such Selling
Shareholder if such Selling Shareholder is a corporation or the Partnership
Agreement of such Selling Shareholder if such Selling Shareholder is a
partnership;
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the sale of such Firm
Shareholder Shares being delivered by such Selling Shareholder at such Time
of Delivery or the consummation of the transactions contemplated by this
Agreement and the Pricing Agreement to be sold by such Selling Shareholder
hereunder, except such as have been obtained under the Act and such as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of such Shareholder Shares by the Underwriters;
(iv) Upon payment for the Firm Shareholder Shares as provided in this
Agreement and delivery of such Firm Shareholder Shares to each of the
several Underwriters endorsed to them in blank in the State of New York,
and assuming that such Underwriters are without notice of any adverse
claim, the Underwriters are "protected purchasers" of the Firm Shareholder
Shares (within the meaning of Section 8-303 of the New York Uniform
Commercial Code (the "UCC")) and the Underwriters will take such Firm
Shareholder Shares free of any adverse claim to the extent Section 8-303 of
the UCC is effective with respect to such adverse claim.
In rendering the opinion in paragraph (iv), such counsel may rely upon a
certificate of such Selling Shareholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
such Selling Shareholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
-15-
It is understood that the opinions set forth above, to the extent they are
governed by or relate to the laws of the Netherlands Antilles, will be addressed
by De Brauw Blackstone Westbroek P.C., and it is understood that counsel for the
Selling Shareholders other than De Brauw Blackstone Westbroek P.C. will limit
their opinion to matters reflecting New York law and the federal law of the
United States;
(e) On the date of the Pricing Agreement for such Designated Shares and at
each Time of Delivery for such Designated Shares, 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, dated the date of the
Pricing Agreement, and a letter dated such Time of Delivery, respectively (a
draft of the form of letter to be delivered on the date of the Pricing Agreement
for such Designated Shares is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered at the Time of Delivery for such Designated
Shares is attached as Annex I(b) hereto), and with respect to such letter dated
such Time of Delivery, as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives;
(f) (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 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 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 pursuant to (i) the Company's
employee stock purchase plans existing on the date hereof, or (ii) the exercise
of certain employee stock options existing on the date hereof), or long-term
debt of the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended 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 relating to the Designated Shares;
(g) On or after the date of the Pricing Agreement relating to the
Designated Shares 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 on or after the date of the Pricing Agreement relating to the Designated
Shares 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;
(h) 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 trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
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Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Firm Shares or Optional Shares
or both on the terms and in the manner contemplated in the Prospectus as first
amended or supplemented relating to the Designated Shares;
(i) The Shares at each Time of Delivery shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange;
(j) 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
(k) 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) and (e) of this Section and as to
such other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, 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 or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, 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 any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares.
(b) Each Selling Shareholder will indemnify and hold harmless each
Underwriter and the Company against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or 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 or the Prospectus as amended or supplemented and any other prospectus
-17-
relating to the Shareholder 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 or the Prospectus as amended
or supplemented and any other prospectus relating to the Shareholder Shares or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder expressly for
use therein; and will reimburse each Underwriter and the Company for any legal
or other expenses reasonably incurred by such Underwriter or the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that such Selling Shareholder shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
expressly for use therein.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Shareholder against any losses, claims, damages or liabilities to which
the Company or such Selling Shareholders 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 and each Selling Shareholder for any legal or other expenses reasonably
incurred by the Company or such Selling Shareholder in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) 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
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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.
(e) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders 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 (d) 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 and the
Selling Shareholders 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 and the Selling Shareholders 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 and the Selling Shareholders 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 and the Selling Shareholders 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, each
of the Selling Shareholders and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (e) 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 (e). 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 (e) 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 (e), 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
-19-
(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 (e) to contribute are several in proportion to their respective
underwriting obligations with respect to such Shares and not joint.
(f) The obligations of the Company and the Selling Shareholders under this
Section 8 shall be in addition to any liability which the Company and the
Selling Shareholders 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 or any Selling Shareholder within the meaning of the Act.
9. (a) 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 Representatives may in their discretion
arrange for themselves or another party or other parties to purchase such Shares
on the terms contained herein. If within thirty-six hours after such default by
any Underwriter the Representatives do not arrange for the purchase of such Firm
Shares or Optional Shares, as the case may be, then the Company and the Selling
Shareholders 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 and the
Selling Shareholders that they have so arranged for the purchase of such Shares,
or the Company and the Selling Shareholders notify the Representatives that it
has so arranged for the purchase of such Shares, the Representatives or the
Company and the Selling Shareholders 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.
(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 and the Selling
Shareholders 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 and the Selling
Shareholders 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.
-20-
(c) 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 and the Selling
Shareholders 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 and the Selling Shareholders 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 or the
Selling Shareholders, except for the expenses to be borne by the Company, the
Selling Shareholders 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.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Shareholders 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 of the Selling Shareholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Shareholder 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, neither the Company nor the Selling Shareholders
shall 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 and the Selling Shareholders as provided herein, the Company and each of
the Selling Shareholders pro rata (based on the number of Shares to be sold by
the Company and such Selling Shareholder under such Pricing Agreement) will
reimburse the Underwriters through the Representatives for all out-of-pocket
expenses approved in writing by the Representatives, including 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 and the Selling Shareholders 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; and in all dealings with
any Selling Shareholder hereunder, the Representatives of the Underwriters of
Designated Shares and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of such Selling Shareholder
made or given by any or all of the Attorneys-in-Fact for such Selling
Shareholder.
-21-
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; if to any Selling Shareholder shall be delivered or sent by
mail, telex, or facsimile transmission to counsel for such Selling Shareholder
at its address set forth in Annex III hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(d) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company or the Selling Shareholders by the Representatives upon request. 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 the Selling
Shareholders 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,
any Selling Shareholder 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. Time shall be of the essence of 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.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. 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.
-22-
If the foregoing is in accordance with your understanding, please sign and
return to us eight counterparts hereof.
Very truly yours,
Markel Corporation
/s/ Alan I. Kirshner
By:__________________________________
Name: Alan I. Kirshner
Title: Chairman and
Chief Executive Officer
DLJMB Overseas Partners, C.V.
DLJ International Partners, C.V.
DLJ Offshore Partners, C.V.
DLJ First ESC L.P.
DLJ Merchant Banking Funding, Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
/s/ Ivy Dodes
By:___________________________________
Name: Ivy Dodes
Title: Senior Vice President
Accepted as of the date hereof:
/s/ Goldman, Sachs & Co
_________________________
(Goldman, Sachs & Co.)
-23-
ANNEX I
Pricing Agreement
-----------------
Goldman, Sachs & Co.,
Credit Suisse First Boston Corporation,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
As Representatives of the several
Underwriters named in Schedule I hereto,
85 Broad Street,
New York, New York 10004.
February , 2001
Ladies and Gentlemen:
Markel Corporation, a Virginia corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated February , 2001 (the "Underwriting Agreement"), between
the Company and the Selling Shareholders (as defined herein) on the one hand and
Goldman, Sachs & Co. on the other, to issue and sell to the Underwriters named
in Schedule I hereto (the "Underwriters") the Shares specified in Schedule II
hereto (the "Designated Company Shares" consisting of Firm Company Shares and
any Optional Shares the Underwriters may elect to purchase). In addition, the
shareholders of the Company named in Schedule III hereto (the "Selling
Shareholders") propose, subject to the terms and conditions stated herein and in
the above-mentioned Underwriting Agreement, to sell to the Underwriters the
Shareholder Shares specified in Schedule IV hereto (the "Designated Shareholder
Shares" consisting of Firm Shareholder Shares). Firm Company Shares and Firm
Shareholder Shares are hereinafter collectively referred to as the "Firm
Shares." Designated Company Shares and Designated Shareholder Shares are
hereinafter collectively referred to as the "Designated Shares." 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.
1
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) 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 Company 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 Company 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.
Also subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, each of the Selling
Shareholders agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Shareholders, at the time and place and at the purchase price to the
Underwriters set forth in Schedule IV hereto, the number of Firm Shareholder
Shares set forth opposite the name of such Underwriter in Schedule I hereto.
F-2
If the foregoing is in accordance with your understanding, please sign and
return to us eight 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, the Company and the Selling Shareholders. 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 and the
Selling Shareholders for examination, upon request, but without warranty on the
part of the Representatives as to the authority of the signers thereof.
Very truly yours,
Markel Corporation
By:_______________________________________
Name:
Title:
DLJMB Overseas Partners, C.V.
DLJ International Partners, C.V.
DLJ Offshore Partners, C.V.
DLJ First ESC L.P.
DLJ Merchant Banking Funding, Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
By:_______________________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Representatives of the several Underwriters
By:__________________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
F-3
SCHEDULE I
Maximum Number
Number of of Optional
Firm Company Shares Number of Firm
Shares Which Shareholder Shares
to be May be to be Purchased
Underwriter Purchased Purchased
- ----------- ----------- -------------- ------------------
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Cochran, Caronia Securities LLC
Ferris, Baker Watts, Incorporated
Legg Mason Wood Walker, Incorporated
Total ----------- -------------- ------------------
F-4
SCHEDULE II - DESIGNATED COMPANY SHARES
Title of Designated Company Shares:
Number of Designated Company Shares:
Number of Firm Company Shares:
Maximum Number of Optional Shares:
Initial Offering Price to Public:
[$........ per Share] [Formula]
Purchase Price by Underwriters:
[$........ per Share] [Formula]
[Commission Payable to Underwriters:
$........ per Share in [specify same form of funds as in Specified Funds below]]
Form of Designated Company Shares:
Definitive form to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of [The Depository Trust Company or
its designated custodian]
Specified Funds for Payment of Purchase Price:
Federal (same-day) funds
[Describe any blackout provisions with respect to the Designated Company Shares]
Time of Delivery:
......... a.m. (New York City time), .................., 2001
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms] :
[Please see attached sheets.]
F-5
SCHEDULE III
DLJMB Overseas Partners, C.V.
DLJ International Partners, C.V.
DLJ Offshore Partners, C.V.
DLJ First ESC L.P.
DLJ Merchant Banking Funding, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
F-6
SCHEDULE IV - DESIGNATED SHAREHOLDER SHARES
Title of Designated Shareholder Shares:
Number of Designated Shareholder Shares:
Number of Firm Shareholder Shares:
Initial Offering Price to Public:
[$........ per Share] [Formula]
Purchase Price by Underwriters:
[$........ per Share] [Formula]
[Commission Payable to Underwriters:
$........ per Share in [specify same form of funds as in Specified Funds below]]
Form of Designated Shareholder Shares:
Definitive form to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of The Depository
Trust Company or its designated custodian
Specified Funds for Payment of Purchase Price:
Federal (same-day) funds
Time of Delivery:
......... a.m. (New York City time), .................., 2001
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms] :
F-7
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
F-8
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference
in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus or
included in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
or incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
F-9
which were outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the
letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the
documents incorporated by reference therein) in relation to the applicable
Designated Shares for purposes of the letter delivered at the Time of
Delivery for such Designated Shares.
F-10
Pricing Agreement
-----------------
Goldman, Sachs & Co.,
Credit Suisse First Boston Corporation,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
As Representatives of the several
Underwriters named in Schedule I hereto,
85 Broad Street,
New York, New York 10004.
February 21, 2001
Ladies and Gentlemen:
Markel Corporation, a Virginia corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated February 21, 2001 (the "Underwriting Agreement"), between the
Company and the Selling Shareholders (as defined herein) on the one hand and
Goldman, Sachs & Co. on the other, to issue and sell to the Underwriters named
in Schedule I hereto (the "Underwriters") the Shares specified in Schedule II
hereto (the "Designated Company Shares" consisting of Firm Company Shares and
any Optional Shares the Underwriters may elect to purchase). In addition, the
shareholders of the Company named in Schedule III hereto (the "Selling
Shareholders") propose, subject to the terms and conditions stated herein and in
the above-mentioned Underwriting Agreement, to sell to the Underwriters the
Shareholder Shares specified in Schedule IV hereto (the "Designated Shareholder
Shares" consisting of Firm Shareholder Shares). Firm Company Shares and Firm
Shareholder Shares are hereinafter collectively referred to as the "Firm
Shares." Designated Company Shares and Designated Shareholder Shares are
hereinafter collectively referred to as the "Designated Shares." 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.
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Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) 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 Company 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 Company 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.
Also subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, each of the Selling
Shareholders agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Shareholders, at the time and place and at the purchase price to the
Underwriters set forth in Schedule IV hereto, the number of Firm Shareholder
Shares set forth opposite the name of such Underwriter in Schedule I hereto.
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If the foregoing is in accordance with your understanding, please sign and
return to us eight 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, the Company and the Selling Shareholders. 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 and the
Selling Shareholders for examination, upon request, but without warranty on the
part of the Representatives as to the authority of the signers thereof.
Very truly yours,
Markel Corporation
/s/ Alan I. Kirshner
By:______________________________________
Name: Alan I. Kirshner
Title: Chairman and
Chief Executive Officer
DLJMB Overseas Partners, C.V.
DLJ International Partners, C.V.
DLJ Offshore Partners, C.V.
DLJ First ESC L.P.
DLJ Merchant Banking Funding, Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
/s/ Ivy Dodes
By:_______________________________________
Name: Ivy Dodes
Title: Senior Vice President
Accepted as of the date hereof:
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Representatives of the several Underwriters
/s/ Goldman, Sachs & Co
By:___________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
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SCHEDULE I
Maximum Number
of Optional
Number of Shares
Firm Shares Which
to be May be
Underwriter Purchased Purchased
----------- ----------- -------------
Goldman, Sachs & Co. 600,900 90,135
Credit Suisse First Boston Corporation 285,800 42,870
Merrill Lynch, Pierce, Fenner & Smith Incorporated 285,800 42,870
Cochran, Caronia Securities LLC 35,000 5,250
Ferris, Baker Watts, Incorporated 35,000 5,250
Legg Mason Wood Walker, Incorporated 35,000 5,250
Davenport & Company LLC 17,500 2,625
Dowling & Partners Securities, LLC 17,500 2,625
First Union Securities, Inc. 17,500 2,625
Fox-Pitt, Kelton Inc. 17,500 2,625
Janney Montgomery Scott LLC 17,500 2,625
Keefe, Bruyette & Woods, Inc. 17,500 2,625
Scott & Stringfellow, Inc. 17,500 2,625
--------- ---------
Total: 1,400,000 210,000
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SCHEDULE II - DESIGNATED COMPANY SHARES
Title of Designated Company Shares: Common Shares
Number of Designated Company Shares:
Number of Firm Company Shares: 1,078,940 Common Shares
Maximum Number of Optional Shares: 210,000 Common Shares
Initial Offering Price to Public:
$162.50 per Share
Purchase Price by Underwriters:
$153.97 per Share
Form of Designated Company Shares:
Definitive form to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of The Depository Trust Company or
its designated custodian
Specified Funds for Payment of Purchase Price:
Federal (same-day) funds
Time of Delivery:
9:30 a.m. (New York City time), February 27, 2001
Closing Location: 1701 Pennsylvania Avenue, Washington, D.C.
Names and Addresses of Representatives:
Designated Representatives: Goldman, Sachs & Co.
Address for Notices, etc.: 85 Broad Street, New York, New York 10004
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SCHEDULE III
DLJMB Overseas Partners, C.V.
DLJ International Partners, C.V.
DLJ Offshore Partners, C.V.
DLJ First ESC L.P.
DLJ Merchant Banking Funding, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
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SCHEDULE IV - DESIGNATED SHAREHOLDER SHARES
Title of Designated Shareholder Shares: Common Shares
Number of Designated Shareholder Shares:
Number of Firm Shareholder Shares: 321,060
Initial Offering Price to Public:
$162.50 per Share
Purchase Price by Underwriters:
$153.97 per Share
Form of Designated Shareholder Shares:
Definitive form to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of The Depository Trust Company or
its designated custodian
Specified Funds for Payment of Purchase Price:
Federal (same-day) funds
Time of Delivery:
9:30 a.m. (New York City time), February 27, 2001
Closing Location: 1701 Pennsylvania Avenue, Washington, D.C.
Names and Addresses of Representatives:
Designated Representatives: Goldman, Sachs & Co.
Address for Notices, etc.: 85 Broad Street, New York, New York 10004
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