ACE LIMITED
Ordinary Shares
UNDERWRITING AGREEMENT
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1. Introductory. ACE Limited, a Cayman Islands company ("Company"),
proposes to issue and sell from time to time 18,975,000 shares of its ordinary
shares (par value $0.041666667) ("Registered Securities"). Particular offerings
of the Registered Securities will be sold pursuant to a Terms Agreement referred
to in Section 3, for resale in accordance with terms of offering determined at
the time of sale.
The Registered Securities involved in any such offering are
hereinafter referred to as the "Offered Securities." The firm or firms which
agree to purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives," provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-49257) relating to the
Registered Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and has become effective. Such
registration statement, as amended at the time of any Terms Agreement referred
to in Section 3, is hereinafter referred to as the "Registration Statement," and
the prospectus included in such Registration Statement, as supplemented as
contemplated by Section 3 to reflect the terms of offering of the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933 ("Act"),
including all material incorporated by reference therein, is hereinafter
referred to as the "Prospectus". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the registration statement relating
to the Registered Securities, such registration statement conformed in all
material respects to the requirements of the Act and the rules and regulations
of the Commission ("Rules and Regulations") and did not include 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, in the case of the
Prospectus in light of the circumstances under which they were made, not
misleading, and on the date of each Terms Agreement referred to in Section 3,
the Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include 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, in the case of the Prospectus in light of the
circumstances under which they were made, not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by any
Underwriter through the Representatives, if any, specifically for use therein.
(c) The Company has been duly organized and is subsisting and in
good standing under the laws of the Cayman Islands, with corporate power and
authority to own its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the business, results of operations or financial condition of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect").
(d) Each subsidiary of the Company which is a corporation has
been duly incorporated or organized and is an existing corporation in good
standing (to the extent such jurisdiction recognizes such concept) under the
laws of the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as described in the
Prospectus; and each such subsidiary of the Company is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to so qualify would not have a
Material Adverse Effect; all of the issued and outstanding capital stock of
each such subsidiary of the Company has been duly authorized and validly issued
and is fully paid and nonassessable; and all of the issued and outstanding
capital stock of each such subsidiary is owned by the Company, directly or
through subsidiaries, other than ACE Staff Corporate Member Ltd., except for
de minimis shareholdings as required to comply with applicable law, and such
capital stock, is
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owned free from liens, encumbrances and defects (except for restrictions or
transferability on the ordinary shares of ACE Insurance (as defined below) and
CODA (as defined below) prior to approval by the Bermuda Monetary Authority).
(e) Each subsidiary of the Company which is a partnership has
been duly formed and is an existing partnership under the laws of the
jurisdiction of its formation, with power and authority to own its properties
and conduct its business as described in the Prospectus; and each such
subsidiary of the Company is duly qualified to do business in good standing in
all other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the failure
to so qualify would not have a Material Adverse Effect; all of the outstanding
equity interests of each such subsidiary of the Company have been duly
authorized and validly issued; and all of the equity interests of each such
subsidiary are owned by the Company, directly or through subsidiaries, free from
liens, encumbrances and defects (other than immaterial amounts necessary to
comply with applicable law).
(f) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding shares
of capital stock of the Company are, and, when the Offered Securities have been
delivered and paid for in accordance with the Terms Agreement on the Closing
Date (as defined below), such Offered Securities will have been, validly issued,
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Securities.
(g) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the Company
to file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to a Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(h) The Offered Securities have been approved for listing on the
New York Stock Exchange Inc. subject to notice of issuance.
(i) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement in
connection with the issuance and sale of the Offered Securities by the Company,
except such as have been obtained and made under the Act, such filing of the
Prospectus as has been
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made with the Bermuda Registrar of Companies under the Companies Xxx 0000 of
Bermuda and such as may be required under state securities laws.
(j) Except as disclosed in the Prospectus, under current laws and
regulations of the Cayman Islands and Bermuda and any political subdivision
thereof, all dividends and other distributions declared and payable on the
Offered Securities may be paid by the Company to the holder thereof in United
States dollars and freely transferred out of the Cayman Islands or Bermuda and
all such payments made to holders thereof or therein who are non-residents of
the Cayman Islands or Bermuda will not be subject to income, withholding or
other taxes under laws and regulations of the Cayman Islands or Bermuda or any
political subdivision or taxing authority thereof or therein and will otherwise
be free and clear of any other tax, duty, withholding or deduction in the Cayman
Islands or Bermuda or any political subdivision or taxing authority thereof or
therein and without the necessity of obtaining any governmental authorization in
the Cayman Islands or Bermuda or any political subdivision or taxing authority
thereof or therein.
(k) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) and the issuance and sale
of the Offered Securities, will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, (A) any statute, any
rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any subsidiary of
the Company or any of their properties, or (B) any agreement or instrument to
which the Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the Company or
any such subsidiary is subject, or (C) the organizational documents of the
Company or any such subsidiary, except, in the case of clauses (A) and (B) only,
such breaches, violations, or defaults as would not have a Material Adverse
Effect, and the Company has full power and authority to authorize, issue and
sell the Offered Securities as contemplated by this Agreement.
(l) The Terms Agreement (including the provisions of this
Agreement) has been duly authorized, executed and delivered by the Company.
(m) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have
a Material Adverse Effect.
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(n) Each of A.C.E. Insurance Company, Ltd. ("ACE Insurance"),
Corporate Officers & Directors Assurance Ltd. ("CODA"), CAT Limited ("CAT") and
Tempest Reinsurance Company Limited ("Tempest") (the "Bermuda Insurance
Subsidiaries") is duly registered as an insurer and is subject to regulation and
supervision in Bermuda; each of Westchester Fire Insurance Company, Westchester
Surplus Lines Insurance Company and Industrial Underwriters Insurance Company
(the "U.S. Insurance Subsidiaries" and together with the Bermuda Insurance
Subsidiaries and the U.K. Insurance Subsidiaries, the "Insurance Subsidiaries")
is duly registered as an insurer and subject to regulation and supervision in
New York, Georgia and Texas, respectively; each of the Company and the Insurance
Subsidiaries is duly licensed or admitted as an insurer or an insurance holding
company (as applicable) in each jurisdiction outside its jurisdiction of
organization where it is required to be so licensed to conduct its business as
described in the Prospectus, except for where the failure to be so licensed or
admitted would not have a Material Adverse Effect; each of the Company and the
Insurance Subsidiaries has all other necessary authorizations, approvals,
orders, certificates and permits, of and from, and has made all declarations and
filings with, all insurance authorities, commissions or other insurance
regulatory bodies to conduct their respective businesses as described in the
Prospectus, except for where the failure to have such authorizations, approvals,
orders, certificates and permits, or to make such declarations and filings,
would not have a Material Adverse Effect; all of such authorizations, approvals,
orders, certificates and permits are in full force and effect, except where the
failure to be in full force and effect would not have a Material Adverse Effect;
and neither the Company nor the Insurance Subsidiaries has received any
notification from any insurance authority, commission or other insurance
regulatory body to the effect that any additional authorization, approval,
order, license, certificate or permit from such authority, commission or body is
needed to be obtained by any of the Company or the Insurance Subsidiaries,
except for any authorization, approval, order, license, certificate or permit
from any such authority, commission or body the failure of which to obtain,
singly or in the aggregate, would not have a Material Adverse Effect.
(o) Each of the Company and its Insurance Subsidiaries is in
compliance with all applicable insurance statutes and regulations and has filed
all reports, documents or other information required to be filed under such
statutes and regulations, except where the failure to comply or file would not
have a Material Adverse Effect; and each of the Company and its Insurance
Subsidiaries is in compliance with the insurance laws and regulations of other
jurisdictions which are applicable to the Company and the Insurance Subsidiaries
(as the case may be), except where the failure to comply would not have a
Material Adverse Effect.
(p) Except as set forth in the Registration Statement and the
Prospectus, no authorization, approval or consent of any governmental authority
or agency is required (other than any license as an insurer or insurance holding
company as referred to in paragraph (n) above and other than those which have
already been obtained) under the laws of any jurisdiction in which the Company
or any of its
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subsidiaries conduct their respective businesses in connection with the
ownership, directly or indirectly, by the Company of equity interests in any
subsidiary or the repatriation of any amount from or to the Company or any of
the subsidiaries, except to the extent that the failure to obtain such
authorization, approval or consent would not have a Material Adverse Effect.
(q) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations under the Terms
Agreement (including the provisions of this Agreement) or which are otherwise
material in the context of the sale of the Offered Securities; and no such
actions, suits or proceedings are, to the Company's knowledge, threatened or
contemplated.
(r) The financial statements included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis.
(s) The description of the Company's reserves and reserving
methodology and assumptions described in the Prospectus is accurate and fairly
presents the information set forth therein in all material respects and, since
December 31, 1997, no loss experience has developed which would require or make
it appropriate for the Company to alter or modify such methodology.
(t) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus (i) neither the
Company nor any of its subsidiaries has sustained any material loss or material
interference with its business from any action, notice, order or decree from an
insurance regulatory authority and (ii there has been (A) no material adverse
change in case reserves or losses or loss expense or (B) no material adverse
change, nor any development or event involving a prospective material adverse
change, in the financial condition, business, or results of operations of the
Company and its subsidiaries taken as a whole, and (iii) except as disclosed in
or contemplated by the Prospectus, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(u) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof
as
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described in the Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940.
3. Purchase, Sale and Delivery of Offered Securities. The obligation
of the Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the number of shares to be
purchased by each Underwriter and the purchase price to be paid by the
Underwriters. The Terms Agreement will also specify the time and date of
delivery and payment (such time and date, or such other time not later than
seven full business days thereafter as the Underwriter first named in the Terms
Agreement (the "Lead Underwriter") and the Company agree as the time for payment
and delivery, being herein and in the Terms Agreement referred to as the
"Closing Date"), the place of delivery and payment and any details of the terms
of offering that should be reflected in the prospectus supplement relating to
the offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the Closing Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Offered Securities for sale as set forth in the Prospectus.
The certificates for the Offered Securities delivered to the
Underwriters on the Closing Date will be in definitive form, in such
denominations and registered in such names as the Lead Underwriter requests.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (2) (or, if applicable,
subparagraph (5)) of Rule 424(b) not later than the second business day
following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Lead Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus
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and will afford the Lead Underwriter a reasonable opportunity to review and
comment upon such proposed amendment or supplement; and the Company will also
advise the Lead Underwriter promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its reasonable
best efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales by
any Underwriter or dealer, any event occurs 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 to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify the Lead Underwriter of such
event and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the Lead
Underwriter's consent to, nor the Underwriters' delivery of, any such amendment
or supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than 16 months, after
the date of each Terms Agreement, the Company will make generally available to
its securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the registration
statement relating to the Registered Securities, (ii) the effective date of the
most recent post-effective amendment to the Registration Statement to become
effective prior to the date of such Terms Agreement and (iii) the date of the
Company's most recent Annual Report on Form 10-K filed with the Commission prior
to the date of such Terms Agreement, which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement (two of which will be signed and will include all
exhibits), any related preliminary prospectus, any related preliminary
prospectus supplement, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as the Lead Underwriter requests. The
Prospectus shall be so furnished on or prior to 3:00 P.M., New York time, on the
business day following the later of the execution and delivery of the Terms
Agreement. All other documents shall be so furnished as soon as available. The
Company will pay the expenses of printing and distributing to the Underwriters
all such documents.
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(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as the Lead Underwriter
designates and will continue such qualifications in effect so long as required
for the distribution provided that the Company shall not be required to qualify
as a foreign corporation or to consent to the service of process under the laws
of any such state (except service of process with respect to the offering and
sale of the Offered Securities) or subject itself to any taxation in respect of
doing business.
(g) During the period of two years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon request, to
each of the other Underwriters, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such year; and the
Company will furnish to the Representatives as soon as available, a copy of each
report and any definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934 or mailed to stockholders.
(h) The Company will pay all expenses incident to the performance
of its obligations under the Terms Agreement (including the provisions of this
Agreement), for any filing fees and other expenses (including fees and
disbursements of counsel) incurred in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions as the Lead
Underwriter designates and the printing of memoranda relating thereto, for the
filing fee incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. of the Offered Securities, for any travel expenses of
the Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers of the
Offered Securities and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters.
(i) The Company will indemnify and hold harmless the Underwriters
against any documentary, stamp or similar issue tax, including any interest and
penalties, on the creation, issue and sale of the Offered Securities and on the
execution and delivery of the Terms Agreement (including the provisions of this
Agreement). All payments to be made by the Company hereunder shall be made
without withholding or deduction for or on account of any present or future
taxes, duties or governmental charges whatsoever unless the Company is compelled
by law to deduct or withhold such taxes, duties or charges. In that event, the
Company shall pay such additional amounts as may be necessary in order that the
net amounts received after such withholding or deduction shall equal the amounts
that would have been received if no withholding or deduction had been made.
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(j) For a period of 90 days after the date of the initial public
offering of any Offered Securities, the Company will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to, any
additional ordinary shares or securities convertible into or exchangeable or
exercisable for any ordinary shares, or publicly disclose the intention to make
any such offer, sale, pledge, disposition or filing, without the prior written
consent of the Lead Underwriter, other than (x) issuances of ordinary shares,
options, or other securities or rights pursuant to any employee or director
compensation, options, savings, benefit or other plan of the Company, (y) any
issuance upon exercise, conversion or exchange of any securities or obligations
outstanding on the date hereof and (z) any issuances of equity securities as
consideration for an acquisition.
(k) The Company will use its best efforts to provide to
shareholders the information required by shareholders to complete their U.S.
income tax returns in the manner specified in the Prospectus and, to that end,
to (i) send a letter shortly after the end of each fiscal year asking each
corporate policyholder to represent whether the insured or any director or
officer of the insured was a U.S. shareholder of the Company, within the meaning
of Section 953(c)(1)(A) of the Internal Revenue Code of 1986 (the "Code"), or
related to a U.S. shareholder of the Company at any time during the preceding 12
months or to use another method which the Company reasonably believes will
elicit similar information; (ii) if the gross "related person insurance income"
("RPII") of either of the Insurance Subsidiaries for any fiscal year is 20% or
more of such Insurance Subsidiary's gross insurance income within the meaning of
Section 953(c)(3)(B) of the Code, send a letter shortly after the end of such
fiscal year to all record owners (other than The Depository Trust Company
("DTC") and DTC participants) asking them to notify the Company's transfer agent
(on a form attached to the letter) within 30 days of the percentage of shares
held by them that are beneficially owned by U.S. persons, the percentage that
are beneficially owned by non-U.S. persons, and the percentage for which
beneficial ownership is not known; and (iii) if the gross RPII of either of the
Insurance Subsidiaries for any fiscal year is 20% or more of such Insurance
Subsidiary's gross insurance income within the meaning of Section 953(c)(3)(B)
of the Code, (A) prepare IRS Form 5471 (or any successor form) with all
Insurance Subsidiary information and (B) as soon as practicable after the end of
such fiscal year, send copies of Form 5471 and a letter instructing U.S.
shareholders how to complete Form 5471 to all record owners (other than DTC and
DTC participants).
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Securities will
be subject to the accuracy in all material respects of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder in all material respects and to the
following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery thereof
of Coopers & Xxxxxxx L.L.P. confirming that they are independent public
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statement comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards No.
71, Interim Financial Information, on any unaudited financial statements
included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements of
the Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other
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specified procedures, nothing came to their attention that caused them to
believe that:
(A) the unaudited financial statements included in the
Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations or any material modifications should be
made to such unaudited financial statements for them to be in conformity
with generally accepted accounting principles;
(B) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not more than
three business days prior to the date of the Terms Agreement, there was
any change in the capital stock or any increase in short-term indebtedness
or long-term debt of the Company and its consolidated subsidiaries or, at
the date of the latest available balance sheet read by such accountants,
there was any decrease in consolidated net assets, as compared with
amounts shown on the latest balance sheet included in the Prospectus; or
(C) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there were any
decreases, as compared with the corresponding period of the previous year,
in consolidated net sales, net operating income or in the total or per
share amounts of consolidated net income, except in all cases set forth in
clauses (B) and (C) above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statement (in each case to the
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the Company
and its subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in such letter
and have found such dollar
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amounts, percentages and other financial information to be in agreement
with such results, except as otherwise specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in the
Registration Statements for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement.
Prior to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of the Terms
Agreement, there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the financial condition
business or results of operations of the Company or its subsidiaries
which, in the judgment of a majority in interest of the Underwriters including
the Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii any downgrading in the rating of any
debt securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or any
public announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (ii any suspension or limitation of
trading in securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market;
(iv any banking moratorium declared by U.S. federal, New York or Bermuda
authorities; or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the judgment
of a majority in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) the Representatives shall have received on the Closing Date a
signed opinion of Xxxxxx and Xxxxxx, Cayman Islands counsel for the Company,
dated the Closing Date, to the effect that:
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(i) the Company has been duly incorporated and is validly
existing and in good standing as an exempted company, under the laws of the
Cayman Islands, and has the corporate power and corporate authority to own,
lease and operate its property, and to conduct its business, as described
in the Registration Statement and the Prospectus;
(ii) the authorized share capital of the Company, as set out
in its Memorandum of Association, conforms as to legal matters to the
description thereof contained in the Registration Statement and the
Prospectus; all of the Company's Ordinary Shares have been duly and validly
authorized and issued by the Company and are registered in the books of the
Company as fully paid; on the basis that the contractual subscription price
of all such Ordinary Shares is fully paid in cash (or equivalent
consideration approved by the Directors), such ordinary Shares issued may
properly be credited as fully paid under Cayman Islands law and, as the
Company has been established on the basis that the liability of its
shareholders is limited to the amount, if any, unpaid on their Shares (see
Clause 5 of the Memorandum of Association), there is no rule of Cayman
Islands law that would impose any further liability on persons holding
Ordinary Shares in the Company, merely by reason of such shareholding; so
far as Cayman Islands law is concerned, the registered holders have good
and valid title to their respective Ordinary Shares on the assumption that
they have not entered into any liens, encumbrances, equities or claims
which could give rise to any equitable interest on the part of any third
party in respect of such Ordinary Shares; and the holders of Ordinary
Shares are not subject to any pre-emptive rights under the laws of the
Cayman Islands or the Company's Memorandum and Articles of Association;
(iii) the Terms Agreement, including the provisions of this
Agreement, have been duly authorized, executed and delivered by the
Company;
(iv) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Terms Agreement,
including the provisions of this Agreement, and the consummation by the
Company, of the transactions contemplated by the Terms Agreement, including
the provisions of this Agreement, do not (A) violate any provision of the
Articles of Association of the Company; (B) contravene any provision of any
law, public rule or regulation of the Cayman Islands applicable to the
Company; (C) to
13
the best of such counsel's knowledge, contravene any existing published
order or decree of the courts of the Cayman Islands by which the Company is
bound or by which its properties or assets may be affected; or (D) require
any consent, approval or authorization or order of, or qualification with
any Cayman Islands governmental agency in connection with the offer and
sale of the Offered Securities;
(v) to the best of such counsel's knowledge, but based only
upon a search of the cause list at the offices of the Grand Courts of the
Cayman Islands, there was no action, suit or proceeding before the courts
of the Cayman Islands at the close of business on a recent date;
(vi) all statements made in the Prospectus with regard to
statutes, regulations, rules, treaties and other laws of the Cayman Islands
(including, but not limited to, insurance, regulatory and tax matters and
the Companies Law (1995 Revision) of the Cayman Islands) and enforcement of
judgments in the Cayman Islands are accurate;
(vii) pursuant to this Agreement, and to the extent that the
laws of the Cayman Islands are relevant, the Company has legally, validly,
effectively and irrevocably submitted to the jurisdiction of the federal
and state courts of the United States having jurisdiction in the State of
New York, County of New York, and has legally, validly and effectively
appointed CT Corporation System as the authorized agent of the Company for
the purposes described in Section 14 of this Agreement assuming this to be
the case as a matter of the applicable federal and state laws;
(viii) the choice of the laws of New York, United States of
America as the governing law of this Agreement is a valid and effective
choice of law and in an action brought before a court of competent
jurisdiction in the Cayman Islands, the laws of New York would, to the
extent specifically pleaded and proved as a fact by expert evidence, be
recognized and applied by such court to all issues concerning the formal
and essential validity of the Agreement and the interpretation thereof,
except that in any such action such court will apply those laws of the
Cayman Islands as such court characterizes as procedural and will not apply
those laws of New York as such court characterizes as procedural;
14
(ix) although there is no statutory enforcement in the
Cayman Islands of a judgment obtained in New York, the courts of the Cayman
Islands will recognize and enforce a foreign judgment of a court of
competent jurisdiction, based on the principle that a judgment of a
competent foreign court imposes upon the judgment debtor an obligation to
pay the sum for which judgment has been given provided such judgment is
final, for a liquidated sum, not in respect of taxes or a fine or penalty,
and was not obtained in a manner and is not of a kind the enforcement of
which is contrary to the public policy of the Cayman Islands; a Cayman
Islands court may stay proceedings if concurrent proceedings are being
brought elsewhere; for the purposes of enforcement of a judgment granted
against the Company in respect of this Agreement, a court in the Cayman
Islands would recognize the jurisdiction of the applicable federal or state
court to the jurisdiction of which the Company has submitted rendering
such judgment if service of process on the Company is effected pursuant to
and in accordance with the provisions of this Agreement; and
(x) on the basis that the Company carries on its business as
set forth in the Prospectus, there is not requirement that it be licensed
under the Insurance Law, 1979, as amended of the Cayman Islands.
(e) the Representatives shall have received on the Closing Date a
signed opinion of Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel for the Company, dated
the Closing Date, to the effect that:
(i) each of ACE Insurance, CODA, Tempest and CAT (A) is
validly existing under the laws of Bermuda as a company with limited
liability and is in good standing under the laws of Bermuda (meaning that
such company has not failed to make any filing with any Bermuda government
authority or to pay any Bermuda government fee or tax, the failure of which
would make such company immediately liable to be struck off the Register
of Companies and thereby cease to exist under the laws of Bermuda) and (B)
the corporate objects and powers contained in the Memorandum of Association
of each of CODA, Tempest and CAT are sufficient to allow them to carry on
their business and to own, lease and operate its properties as both are
described in the Prospectus;
(ii) based solely upon a certified copy of the Register of
Members for ACE Insurance, CODA, Tempest and CAT
15
without further inquiry, (a) all of the issued shares in the share capital
of ACE Insurance have been duly and validly authorized and issued and are
fully paid and nonassessable (meaning that, subject to the common law
doctrine of "piercing the corporate veil" and to any agreement to the
contrary between the registered holders and the Company, no further sums
are required to be paid by the holders thereof in connection with the issue
of such shares); and (b) the Company is the registered holder of all the
issued shares of such Company (except for a de minimis number of shares
necessary to comply with applicable law); and (c) based solely upon the
Register of Charges, and without further enquiry, there are no registered
liens, encumbrances, equities or claims in the Register of Charges in
respect of those shares;
(iii) each of ACE Insurance, CODA, CAT and Tempest is duly
registered as an insurer under the Insurance Xxx 0000 (Bermuda) and the
regulations promulgated thereunder (together, the "Insurance Act") and as
so registered, ACE Insurance, CODA and Tempest each may conduct that
insurance business which it is described in the Prospectus as carrying on;
and, based solely on the Certificates of Compliance and without independent
inquiry, each of ACE Insurance, CODA, Tempest and CAT has filed with the
appropriate Bermuda governmental authority all reports, documents or other
information required to be filed under the Insurance Act;
(iv) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Terms Agreement,
including the provisions of this Agreement and the consummation by the
Company of the transactions contemplated by the Terms Agreement, including
the provisions of this Agreement, do not and will not (A) violate any
provision of the Memorandum of Association or Bye-laws of each of ACE
Insurance, CODA, Tempest, and CAT (collectively, the "Bermuda
Subsidiaries"); (B) contravene any provision of any of those laws, rules
and regulations of Bermuda which, in such counsel's experience, are
normally applicable to transactions of the type contemplated by this
Agreement, except that such counsel need not express any opinion in this
paragraph with respect to Bermuda securities laws; (C) based solely upon
the Cause Book and without further inquiry, contravene any judgment, order
or decree by the Bermuda Supreme Court against the Company or the Bermuda
Subsidiaries; (D) based solely upon the Register of Charges and without
further inquiry, conflict with, result in any breach of or constitute a
default (or an event which, with notice or lapse of time, or
16
both, would constitute a default) under, or give rise to any right to
accelerate the maturity or require the prepayment of any registered charge
recorded in the Register of Charges against the Company or the Bermuda
Subsidiaries; or (E) require any consent, approval or authorization or
order of, or qualification with any Bermuda governmental agency, except
such as have been obtained under the applicable securities laws of Bermuda
in connection with the offer and sale of the Securities (as defined in this
Agreement);
(v) based solely upon the Cause Book and without further
enquiry, there is no action, suit or proceeding now pending before the
Bermuda Supreme Court against the Company, ACE Insurance, Tempest or CODA
or any of their respective properties; and
(vi) all statements (but excluding those statements forming
a part of financial information or accounts) made in the Registration
Statement and Prospectus with respect to statutes, regulations, rules,
treaties and other laws of Bermuda (including, but not limited to,
statements made with respect to the Insurance Act and Bermuda tax matters)
fairly and accurately present the information set forth therein and such
counsel's opinion as to such matters.
(f) the Representatives shall have received on the Closing Date a
signed opinion of Xxxxx X. Xxxx, Esq., General Counsel of the Company, dated the
Closing Date, to the effect that:
(i) the Company is qualified to do business, and is in good
standing, as a foreign corporation, under the laws of each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or to be in good standing, would not singly or in the aggregate
have a Material Adverse Effect;
(ii) each of the Subsidiaries is qualified to do business in
each jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification, except where the
failure to be so qualified, would not singly or in the aggregate have a
Material Adverse Effect;
(iii) except as set forth in the Registration Statement and
the Prospectus, such counsel does not know of any outstanding (A)
securities or obligations of the Company convertible into or
17
exchangeable for any shares of capital stock of the Company or any
Subsidiary; (B) rights, warrants or options to acquire or purchase from the
Company any shares of capital stock of the Company or any such convertible
or exchangeable securities or obligations; or (C) obligations or
understandings of the Company to issue or sell any shares of capital stock
of the Company or any Subsidiary, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or obligations; and
(iv) to the best of such counsel's knowledge, and other than
as disclosed in the Prospectus and based solely on a certificate of
officers of the Company, and without independent inquiry, there are no
threatened legal proceedings against the Company and its subsidiaries which
if determined adversely to any such company, would have a Material Adverse
Effect.
(g) the Representatives shall have received on the Closing Date a
signed opinion of Xxxxx, Xxxxx & Xxxxx, United States counsel for the Company,
dated the Closing Date, to the effect that:
(i) ACE USA is duly incorporated and is validly existing as
corporations in good standing as a corporation under the laws of the State
of Delaware;
(ii) the execution and delivery by the Company of, and the
performance by the Company of its respective obligations under, the Terms
Agreement, including the provisions of this Agreement, and the consummation
by the Company of the transactions contemplated by the Terms Agreement,
including the provisions of this Agreement, do not and will not (A)
contravene any provision of any United States federal or New York State
law, rule and regulation, in each case which, in such counsel's experience,
are normally applicable to transactions of the type contemplated by this
Agreement ("United States Applicable Laws"), except that such counsel need
not express any opinion in this paragraph with respect to United States
federal or state securities laws; (B) contravene any judgment, order or
decree known to such counsel without independent inquiry of any United
States federal or New York State court or governmental agency or body
having jurisdiction over the Company or the Subsidiaries or by which the
Company or the Subsidiaries is bound or by which their properties or assets
may be affected; (C) conflict with, result in any breach of or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or
18
give rise to any right to accelerate the maturity or require the prepayment
of any indebtedness or the purchase of any capital stock under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
material properties or assets of the Company or its Subsidiaries, pursuant
to the terms of any agreement filed as an exhibit to the Annual Report on
Form 10-K or the certificate of incorporation or bylaws of ACE USA and its
subsidiaries, except for such conflicts, breaches, violations, defaults,
accelerations, repayments, repurchases, liens, charges or encumbrances that
would not singly or in the aggregate have a Material Adverse Effect; or (D)
based upon such counsel's review of the United States Applicable Laws,
require any consent, approval or authorization or order of, or
qualification with any United States federal or state governmental agency,
except such as have been obtained under the Securities Act and such as may
be required under state securities or blue sky laws or state insurance laws
in connection with the offer and sale of the Securities;
(iii) such counsel does not know, after inquiry of Company
officers and based solely on such inquiry, of any action, suit or
proceeding before or by any United States federal or state government,
governmental instrumentality or court now pending or threatened against
or affecting the Company or its subsidiaries of any of their respective
properties that is required to be described in the Registration Statement
or the Prospectus and is not so described or of any contract or other
document that is required to be described in the Registration Statement or
the Prospectus, or to be filed as an exhibit to the Registration Statement,
that is not described or filed, as required;
(iv) the Registration Statement and the Prospectus (except
for financial statements, schedules and other financial, statistical and
actuarial data, included in or excluded from the Registration Statement and
the Prospectus as to which counsel need not opine) comply as to form in all
material respects with the requirements of the Securities Act;
(v) the statements in the Registration Statement and the
Prospectus insofar as they are descriptions of contracts, agreements or the
Articles, or refer to statements of United States federal or New York State
laws or United States federal or New York State legal conclusions, are
accurate and present fairly the information required to be shown;
19
(vi) the discussion of tax matters set forth under the
heading "--Taxation of Shareholders of the Company--United States Taxation
of U.S. and Non-U.S. Shareholders" in the Prospectus contains the relevant
and material provisions of present United States tax law applicable to the
offering of the Securities and the statements thereunder are true and
correct (subject to the qualifications and assumptions set forth in such
discussion) as of the Closing Date; and
(vii) each of the U.S. Insurance Subsidiaries is duly
registered as an insurer under the Texas Insurance Code, the Georgia
Insurance Code or the Insurance Law of the State of New York (as
applicable) and the regulations promulgated thereunder (collectively, the
"U.S. Insurance Laws") and as so registered, the U.S. Insurance
Subsidiaries each may conduct the insurance business described in the
Prospectus as conducted by them.
Such counsel shall also state that it has been advised by the
Commission that the Registration Statement became effective under the Securities
Act; that any required filings of the Prospectus pursuant to Rule 424 (b) have
been made in the manner and within the time period required by Rule 424(b); and
that, based solely on conversations with the Commission, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for the purpose have been instituted, are pending or, to such
counsel's knowledge, are contemplated under the Securities Act.
Such counsel shall also state that they have examined various
documents and participated in conferences with representatives of the Company
and its accountants and with representatives of the Representatives and their
counsel at which times the contents of the Registration Statement and the
Prospectus and related matters were discussed, and that, although they are not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus or making any representation that they have independently verified
or checked the accuracy, completeness or fairness of such statements, except as
set forth above, no facts have come to such counsel's attention that cause such
counsel to believe that the Registration Statement, at the time it became
effective and as of the date of the Terms Agreement contained any 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 the Prospectus, as of the date of the Terms Agreement and as of the Closing
Date, contained or contains any untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not mislead-
20
ing (such counsel need not express a belief with respect to the financial
statements, schedules and other financial data included in or excluded from the
Registration Statement and the Prospectus).
(h) The Representatives shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriters, such opinion or
opinions, dated such Closing Date, with respect to the Registration Statements
and the Prospectus and other related matters as the Representatives may require,
and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(i) The Representatives shall have received a certificate, dated
such Closing Date, of any two of the Chairman, President and Chief Executive
Officer; Vice Chairman; Chief Financial Officer; and General Counsel and
Secretary of the Company in which such officers, to the best of their knowledge
after reasonable investigation, shall state that: the representations and
warranties of the Company in this Agreement are true and correct in all material
respects; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; and, subsequent to the
date of the most recent financial statements in the Prospectus, there has been
no material adverse change, nor any development or event involving a prospective
material adverse change, in the financial condition, business or results of
operations of the Company and its subsidiaries taken as a whole except as set
forth in or contemplated by the Prospectus or as described in such certificate.
(j) The Representatives shall have received a letter, dated such
Closing Date, of Coopers & Xxxxxxx L.L.P. which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as the
Representatives reasonably request. The Lead Underwriter may in its sole
discretion waive on behalf of the Underwriters compliance with any conditions to
the obligations of the Underwriters hereunder and under the Terms Agreement.
7. Indemnification and Contribution. (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
21
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, 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
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will 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 in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in the Terms Agreement.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the 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 reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in the Terms Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from
22
any liability which it may have to any indemnified party otherwise than under
subsection (a) or (b) above . In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may 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 will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the 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 or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is
23
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 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 director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities under the Terms
Agreement and the aggregate number of shares of Offered Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total number of shares of Offered Securities that the
Underwriters are obligated to purchase on the Closing Date, the Lead Underwriter
may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments under the Terms Agreement (including the provisions of this
Agreement), to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on the Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory to the Lead
Underwriter and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, the Terms Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company, except as provided in Section 9. As used in this Agreement, the
term
24
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to the Terms Agreement (including the provisions of
this Agreement) will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If the Terms Agreement is terminated
pursuant to Section 8 or if for any reason the purchase of the Offered
Securities by the Underwriters is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Company and the Underwriters pursuant to
Section 7 shall remain in effect, and if any Offered Securities have been
purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of the Terms Agreement pursuant to
Section 8 or the occurrence of any event specified in clause (iii), (iv) or (v)
of Section 6(c), the Company will reimburse the Underwriters for all out-of-
pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to them at their addresses furnished to the Company in the Terms Agreement, or,
if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx XX 00 Xxxxxxx, Xxxxxxxxx: General
Counsel; provided, however, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company and the
Underwriters and their respective successors and the officers and directors and
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with the financing described in the Terms
Agreement, and any action under the Terms Agreement (including the
25
provisions of this Agreement) taken by the Representatives jointly or by the
Lead Underwriter will be binding upon all the Lead Underwriters.
13. Counterparts. The Terms Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to the Terms Agreement (including the
provisions of this Agreement) or the transactions contemplated thereby. The
Company irrevocably appoints CT Corporation, as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served in
any such suit or proceeding, and agrees that service of process upon such agent,
and written notice of said service to the Company by the person serving the same
to the address provided in Section 10, shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
The Company further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and effect
for a period of seven years from the date of this Agreement.
The obligation of the Company in respect of any sum due to any Underwriter
shall, notwithstanding any judgment in a currency other than United States
dollars, not be discharged until the first business day, following receipt by
such Underwriter of any sum adjudged to be so due in such other currency, on
which (and only to the extent that) such Underwriter may in accordance with
normal banking procedures purchase United States dollars with such other
currency; if the United States dollars so purchased are less than the sum
originally due to such Underwriter hereunder, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Underwriter
against such loss. If the United States dollars so purchased are greater than
the sum originally due to such Underwriter hereunder, such Underwriter agrees to
pay to the Company an amount equal to the excess of the dollars so purchased
over the sum originally due to such Underwriter hereunder.
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