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EXHIBIT 10.13
CONFIDENTIAL
Placement Agency Agreement
October 25, 2001
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
American International Group, Inc. ("AIG"), The Chubb Corporation
("Chubb")
and GS Capital Partners 2000, L.P. ("GSCP 2000"), or their
respective affiliates
(each a "Founder" and collectively, the "Founders"), expect to form
a Bermuda
corporation organized as a limited liability company (the
"Company"), which the
Founders agree will be initially financed (and the Founders will
have such
rights) substantially as described in the confidential Private
Placement
Memorandum dated October 25, 2001 (together with all amendments
thereof and
supplements and exhibits thereto, the "Private Placement
Memorandum") attached
hereto as Annex A. The Company would propose to issue and privately
sell to
"accredited investors", as that term is defined in Rule 501(a)
under the United
States Securities Act of 1933, as amended (the "Securities Act"),
voting and
non-voting shares of common stock, US$0.01 par value per share
("Common Shares",
the Common Shares to be offered and sold pursuant to this Agreement
being
referred to as the "Shares"), of the Company. The Founders, on
behalf of the
Company, propose to appoint you, as the exclusive placement agent
of the Company
through which the Company will privately offer and sell the Shares,
including
the Shares sold to the Founders and their affiliates (the
"Offering"), subject
to the terms and conditions stated herein. For the purposes of
clarity as used
in this Agreement, the word "you" shall mean, Goldman, Sachs &
Co. and
affiliates thereof acting in the capacity of a placement agent
under this
Agreement and not in the capacity of a Founder or an investor in
the Company.
1.
Upon formation of the Company, the Founders shall cause the Company
to
execute and become a party to this Agreement as if the Company was
a party to
this Agreement as of the date hereof. The Company, as of the date
of its
execution of this Agreement, hereby represents and warrants to you,
as follows:
(a) The Company is a corporation organized as a limited
liability
company duly organized, validly existing and in good standing under
the laws of
Bermuda, and each of its subsidiaries is duly organized, validly
existing and in
good standing under the laws of the jurisdiction in which such
subsidiary is
incorporated or organized; upon completion of the closing relating
to the
issuance of the Shares (the "Closing"), the Company and its
subsidiaries will
each have full right, power and authority to carry on its business
as described
in the Private Placement Memorandum, as the same may be amended or
supplemented
prior to the Closing; the Company has full right, power and
authority to enter
into this Agreement, the Shareholders' Agreement (the shareholders'
agreement to
be entered into by and among the Company, the Founders and the
investors in the
Offering is, the "Shareholders' Agreement") and the Subscription
Agreement (the
subscription agreements to be entered into by and between the
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Company and the investors in the Offering are collectively, the
"Subscription
Agreement") and perform its obligations hereunder and thereunder;
and the
Certificate of Incorporation (the "Certificate"), the Memorandum of
Association
(the "Memorandum") and the Bye-laws (the "Bye-Laws") of the
Company, or similar
organizational documents of the Company, as in effect on the
Commencement Date
(as defined in paragraph 3), will be substantially in the form
included as an
exhibit to the Private Placement Memorandum and no further
amendments to such
Certificate, Memorandum or Bye-Laws will have been proposed or
adopted;
(b) This Agreement has been, and prior to the Closing Date, each
of
the Shareholders' Agreement and the Subscription Agreement will be,
duly
authorized, executed and delivered by the Company and a valid and
binding
obligation of the Company enforceable in accordance with its
terms;
(c) The Company will have an authorized capitalization as described
in
the Private Placement Memorandum; the Shares have been duly and
validly
authorized and, upon payment for the Shares, the Shares will be
duly and validly
issued, fully paid and nonassessable and will conform to the
description of the
Company's capital stock contained in the Private Placement
Memorandum; except as
described in or contemplated by the Private Placement Memorandum,
neither the
Company nor any of its subsidiaries will have at the Closing Date
any
outstanding or authorized options, warrants, calls, rights,
commitments nor any
other agreements of any character obligating it to issue any shares
in its
capital ("Capital Shares") or any securities convertible into, or
evidencing the
right to purchase, any of its Capital Shares nor any agreements
or
understandings with respect to the voting, sale or transfer of any
of its
Capital Shares; and the Company owns all of the outstanding capital
stock of
each of its subsidiaries and the shares of capital stock of such
subsidiaries
are duly and validly issued, fully paid and nonassessable;
(d) The statements set forth in the Private Placement Memorandum
under
the caption "Description of Common Stock, Bye-Laws and Shareholders
Agreement,"
insofar as they purport to describe the material terms of the
Company's Capital
Stock, are accurate and complete;
(e) The Company does not currently contemplate any offers and sales
of
securities of the same or similar class as the Shares nor any
capital stock of
any of its subsidiaries within the next six months (or six months
from the
Closing), with the exception of Common Shares issued upon exercise
of
outstanding warrants (including warrants issued to management),
whether made by,
or on behalf of, the Company;
(f) Except as described in or contemplated by the Private
Placement
Memorandum, delivery and performance of this Agreement, the
Subscription
Agreement and the Shareholders' Agreement by the Company and the
consummation by
the Company of the transactions contemplated hereby and thereby
will not
violate, with or without the giving of notice or the lapse of time,
or both, or
require any registration, qualification, approval or filing, except
such as will
have been made or obtained prior to the Closing, under any
provision of law,
statute, ordinance or regulation applicable to the Company, and
will not
conflict with, or require any consent or approval under, or result
in the breach
or termination of any provision of, or constitute a default under,
or result in
the acceleration of the performance of the obligations of
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the Company or any of its subsidiaries under, or result in the
creation of any
claim, lien, charge or encumbrance upon any of the properties,
assets or
businesses of the Company or any of its subsidiaries pursuant to,
the
Certificate, Memorandum and Bye-Laws of the Company or any order,
judgment,
decree, law, ordinance or regulation applicable to the Company or
any of its
subsidiaries or any contract, instrument or agreement to which the
Company or
any of its subsidiaries is a party or by which the Company or any
of its assets
or properties, or any of its subsidiaries or any of its assets or
properties, is
bound; neither the Company nor any of its assets or properties, and
neither any
of its subsidiaries nor any of its assets or properties, is subject
to any
charter, contract or other instrument or agreement, order,
judgment, decree,
law, statute, ordinance or regulation or any other restriction of
any kind or
character that would prevent the Company from entering into this
Agreement, the
Subscription Agreement or the Shareholders' Agreement or from
consummating the
transactions contemplated herein or therein in accordance with the
terms hereof
or thereof;
(g) No filing with, or authorization, approval, consent,
license,
order, registration, qualification or decree of, any court or
arbitrator,
governmental authority or agency, domestic or foreign (including
pursuant to the
Securities Act, the rules and regulations thereunder, the
securities laws of
Bermuda, and the securities or "blue sky" laws of the various
states of the
United States), is required to be obtained by the Company or by any
of its
subsidiaries for the completion of the Offering or the valid
issuance, sale and
delivery of the Shares, except such as will have been made or
obtained prior to
the Closing;
(h) Upon completion of the Closing, the Company, either directly
or
through one or more subsidiaries, will be authorized under Bermuda
law to
underwrite from Bermuda insurance and reinsurance as contemplated
in the Private
Placement Memorandum and no further approvals of the insurance
regulatory or
other authorities in or outside of Bermuda are required for the
conduct of such
business, except as referred to in the Private Placement
Memorandum. Upon
completion of the Closing, the Company and its subsidiaries will be
in
compliance with all applicable provisions of law and applicable
ordinances and
regulations thereunder, and the Company shall have all assets,
rights and
properties necessary to conduct its business as described in the
Private
Placement Memorandum;
(i) Neither the Company nor any of its subsidiaries is in violation
of
its, or any of their respective, Certificate, Memorandum or
Bye-laws or in
default in the performance or observance of any material
obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by
which it or any of its properties may be bound;
(j) No Bermuda stamp, transfer or similar taxes are payable in
respect
of the issuance and delivery of the Shares to the Investors
pursuant to this
Agreement and the Subscription Agreement;
(k) Other than as set forth in the Private Placement Memorandum,
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,
be reasonably
likely to have a material adverse effect on the current or
future
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consolidated financial position, shareholders' equity or results of
operations
of the Company and/or its subsidiaries, and no such proceedings are
to the best
knowledge of the Company or any of its subsidiaries threatened by
governmental
authorities or threatened by others;
(l)
Since the time of its incorporation, neither the Company nor
any
of its subsidiaries has engaged in any activity or business, other
than
organizational actions and actions taken in connection with (i)
seeking
insurance and other regulatory approvals, licenses and permits in
Bermuda and
(ii) the Offering; and
(m) 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.
2.
(a) Subject to the terms and conditions herein set forth, the
Founders,
on behalf of the Company, and upon its execution of this Agreement,
the Company,
hereby appoint you as the exclusive placement agent of the Company
through which
the Company will privately offer and sell the Shares to subscribers
therefor.
(b) With respect to the placement of the Shares to "accredited
investors", the Founders, the Company and you agree (each as to
itself) as
follows:
(i) None of the
Founders, the Company or any other person acting
on its or their behalf will, directly or indirectly (except
through
you or one of your respective affiliates or selling agents), sell
or
offer, or attempt to offer to dispose of, or solicit any offer to
buy,
or otherwise approach or negotiate in respect of, any of the
Common
Shares (or securities exercisable for Common Shares), and none of
the
Founders, the Company or any such person has heretofore done any
of
the foregoing (except that each of AIG and Chubb has engaged
and/or
may engage in preliminary, informal and confidential
discussions
regarding the matters described herein with a limited number of
institutional "accredited investors" with which it has a
substantive
business relationship and which have been approved by you, each
of
which institutions, if interested in seeking additional
information
about participating in the Offering, will be referred to you);
provided, however, that it is hereby agreed that the Company
may,
through you as the placement agent, concurrently offer and sell
Common
Shares to the Founders or their affiliates, and members of the
management of the Company, provided that the Company and you
shall
agree upon appropriate limitations upon any such offers or sales so
as
to enable all offers and sales of Shares to "accredited investors"
to
be entitled to the exemption afforded by Regulation D of the
Securities Act. As used herein, the terms "offer" and "sale" have
the
meanings specified in section 2(3) of the Securities Act;
(ii) None of the Founders, the Company or any other person
acting
on its or their behalf (including you) will, directly or
indirectly,
offer to sell or sell any securities so as to cause the offer and
sale
of the Shares to fail to be entitled to the exemption afforded
by
Regulation D under the Securities Act;
(iii) You and the Company (and until the Closing, each of the
Founders) shall have the right to approve (A) every form of
letter,
circular, notice or
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other written communication from the Company or any other
person
acting on its behalf (including you) to any offeree in connection
with
the offer and sale of the Shares and (B) the nature and number of
the
persons to whom the communication is to be directed; and you and
each
of the Founders has as of the date hereof approved the "teaser" and
no
Founder or you has used any letters, circulars, notices or
other
written communications in connection with the Offering of the
Stock
prior to the date hereof;
(iv) None of the Founders, the Company or any other person
acting
on its or their behalf (including you) will offer or sell the
Shares
by any form of general solicitation or general advertising,
including
but not limited to the methods described in Rule 502(c) under
the
Securities Act;
(v) Each of the Company and you will reasonably believe at the
time of the sale of the Shares that each purchaser is an
"accredited
investor" as that term is defined in Rule 501(a) under the
Securities
Act. The Company will furnish and make available to each purchaser
of
Shares the information and provide each purchaser with the
opportunity
to ask questions and receive answers required by Rule 502(b) under
the
Securities Act. The Company shall be solely responsible for the
contents of any disclosure documents approved by the Company or
the
Founders, including the Private Placement Memorandum, used in
the
offering of the Shares, and the Company represents, warrants,
and
agrees that such documents will not, as of the date of any offer
or
sale of the Shares, contain any untrue statement of a material fact
or
omit to state a material fact necessary to make the statements
made
therein, in the light of the circumstances under which they were
made,
not misleading. The Company hereby authorizes you to use such
disclosure documents in connection with offers and sales of the
Shares;
(vi) The Company and any person acting on its behalf (including
you) will exercise reasonable care to ensure that the purchasers
of
Shares are not underwriters within the meaning of section 2(11) of
the
Securities Act, all purchasers of the Shares will be required
to
execute a Subscription Agreement, with such modifications and
amendments thereto as you and the Company may agree and no
purchaser
shall have the right to purchase any Shares until the
Subscription
Agreement has been executed and delivered by the purchaser and
shall
have been accepted by the Company;
(vii) The Company and any person acting on its behalf
(including
you) will exercise best efforts to observe any restrictions imposed
on
the offer, sale or delivery of the Shares by laws of
jurisdictions
outside the United States, including, without restriction, the
limitations set forth in the Private Placement Memorandum under
the
caption "Notice to Investors";
(viii) The Founders and the Company understand that you are
acting as the Company's agent in the placing of Shares with
"accredited investors" and that your responsibility is limited to
a
"best
efforts" undertaking in placing the Shares, with no
understanding, express or implied, on your part of a commitment by
you
to purchase or place the Shares (the Company understands,
however,
that your affiliates intend to purchase Shares on terms
substantially
as set forth in the Private Placement Memorandum, subject to
completion of the Offering); and
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(ix) You will not complete any sale of Shares to a purchaser in
an amount less than $5,000,040, unless you determine, on a
case-by-case basis, to lower such minimum purchase limitation to
an
amount to not less than $2 million.
(c) You shall communicate to the Company, orally or in writing,
each
offer to purchase Shares other than those rejected by you. You
shall have the
right, in your discretion reasonably exercised, to reject any offer
received by
you to purchase Shares, as a whole or in part, and any such
rejection by you
shall not be deemed a breach of your agreements contained herein. A
reasonable
period of time prior to the Company signing a Subscription
Agreement with an
Investor, you will submit for discussion and consultation with each
of the
Founders the name of such prospective purchaser in the
Offering.
(d) The Founders and the Company acknowledge that you, in
arranging
for the placement of the Shares, will do so in reliance on the
representations,
warranties, covenants and agreements of the Founders and the
Company contained
herein.
(e) Each of the Founders and the Company will notify you promptly
of
any occurrence of which it becomes aware that is material in the
context of the
offering and sale of the Shares, including any event which shall
lead such
Founder or the Company to reasonably believe that the Private
Placement
Memorandum or any amendment or supplement thereto contains any
untrue statement
of a material fact or omits to state a material fact necessary to
make the
statements made therein not misleading, or which occurrence could
cause the
representations or warranties of such Founder or the Company
contained in this
Agreement to be untrue or could cause a breach of the covenants,
agreements or
indemnities of such Founder or the Company contained in this
Agreement (or which
occurrence would have caused such representations and warranties to
be untrue if
this Agreement had been entered into immediately after such
occurrence), and
will take such steps as may be reasonably requested by you to
remedy and/or
publicize the same, including preparing and distributing a
supplement or
amendment to the Private Placement Memorandum, and to indemnify you
in respect
of any such steps taken.
(f) Any representations, warranties, agreements, certificates or
legal
opinions made, given or delivered by the Company or its counsel
(acting in such
capacity) to any purchaser of the Shares (other than the opinion
contemplated in
paragraph 4(b)) or made, given or delivered by any purchaser of the
Shares or
its counsel to the Company in connection with the Offering shall
also extend to
the benefit of you as the placement agent.
(g) The Company will not offer or sell any securities of the same
or
similar class as the Shares nor any capital stock of any of its
subsidiaries
within the next six months (or six months from the Closing) whether
made by, or
on behalf of, the C
