Exhibit 1.1
8,000,000
Shares
ASPEN INSURANCE
HOLDINGS LIMITED
7.401% Perpetual
Non-Cumulative Preference Shares
(Liquidation Preference $25 Per Share)
UNDERWRITING
AGREEMENT
November 10,
2006
LEHMAN BROTHERS
INC .
745 Seventh Avenue
New York, NY 10019
UBS SECURITIES LLC
677 Washington Boulevard
Stamford, CT 06901
As Representatives of
the several
Underwriters named in Schedule
1,
Dear Sirs:
1.
Introductory. Aspen Insurance
Holdings Limited, a Bermuda company (the ‘‘
Company ’’), proposes to issue and sell to the
several underwriters named in Schedule 1 hereto (the ‘‘
Underwriters ’’), for whom you (the
‘‘ Representatives ’’) are acting as
representatives, an aggregate of 8,000,000 of its 7.401% Perpetual
Non-Cumulative Preference Shares (the ‘‘
Securities ’’), with a liquidation preference of
$25 per share (the ‘‘ Preference Shares
’’), which shall have the rights, powers and
preferences set forth in the Certificate of Designation of
Perpetual Non-Cumulative Preference Shares (the ‘‘
Certificate of Designation ’’). The ordinary
shares, par value $.0015144558 per share, of the Company, are
hereinafter referred to as the ‘‘ Ordinary
Shares ’’.
The Company hereby
agrees with the several Underwriters as follows:
2.
Representations, Warranties and Agreements of the Company.
The Company represents and warrants to, and
agrees with, each Underwriter that:
(i) A
registration statement (No. 333-129214) relating to the
Securities has been prepared by the Company, including a prospectus
(the ‘‘ initial registration statement
’’) has been filed with the Securities and Exchange
Commission (the ‘‘ Commission ’’)
and has been declared effective under the Securities Act of 1933,
as amended (the ‘‘ Act ’’) and
either (A) is not proposed to be amended or (B) is proposed to
be amended by amendment or post-effective amendment. Either (A) an
additional registration statement (the ‘‘ additional
registration statement ’’) relating to the
Securities may have been filed with the Commission pursuant to Rule
462(b) (‘‘ Rule 462(b) ’’) under the
Act (if available) and, if so filed, has become effective upon
filing pursuant to such Rule and the Securities have been duly
registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration statement
or (B) such an additional registration statement is proposed to be
filed with the Commission pursuant to Rule 462(b) (if available)
and will become effective upon filing pursuant to such Rule, and
upon such filing the Securities will all have been duly registered
under the Act pursuant to the initial registration statement and
such additional registration statement. If the Company does not
propose to amend the initial registration statement or if an
additional registration statement has been filed and the Company
does not propose to amend it, and if any post-effective amendment
to either such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement,
the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has
become effective upon
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filing pursuant to Rule
462(c) (‘‘ Rule 462(c) ’’) under the
Act or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, ‘‘ Effective
Time ’’ with respect to the initial registration
statement or, if filed prior to the execution and delivery of this
Agreement, the additional registration statement means (A) if
the Company has advised the Representatives that it does not
propose to amend such registration statement, the date and time as
of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c), or (B) if the Company has advised the Representatives
that it proposes to file an amendment or post-effective amendment
to such registration statement, the date and time as of which such
registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective
by the Commission. If an additional registration statement has not
been filed prior to the execution and delivery of this Agreement
but the Company has advised the Representatives that it proposes to
file one, ‘‘ Effective Time ’’ with
respect to such additional registration statement means the date
and time as of which such registration statement is filed and
becomes effective pursuant to Rule 462(b). ‘‘
Effective Date ’’ with respect to the initial
registration statement or the additional registration statement (if
any) means the date of the Effective Time thereof. The initial
registration statement, as amended at its Effective Time, including
all material incorporated by reference therein and including all
information contained in the additional registration statement (if
any) and deemed to be a part of the initial registration statement
as of the Effective Time of the additional registration statement
(if any) pursuant to the General Instructions of the Form on which
it is filed, is hereinafter referred to as the ‘‘
Initial Registration Statement ’’. The
additional registration statement (if any), as amended at its
Effective Time, including the contents of the initial registration
statement incorporated by reference therein, is hereinafter
referred to as the ‘‘ Additional Registration
Statement ’’. For purposes of this Agreement, the
following terms have the specified meanings:
‘‘
Applicable Time ’’ means 2:10 P.M. (New York
City time) on the date of this Agreement;
‘‘ Base
Prospectus ’’ means the base prospectus filed as
part of the Registration Statement, in the form in which it has
most recently been amended on or prior to the date hereof, relating
to the Securities;
‘‘
Disclosure Package ’’ means, as of the
Applicable Time, the most recent Preliminary Prospectus, together
with each Issuer Free Writing Prospectus filed or used by the
Company on or before the Applicable Time and identified on Schedule
2 hereto, other than a road show that is an Issuer Free Writing
Prospectus under Rule 433 of the rules and regulations of the
Commission (the ‘‘ Rules and Regulations
’’);
‘‘ Final
Term Sheet ’’ means the term sheet prepared
pursuant to Section 6(b) of the Agreement and substantially in the
form attached in Schedule 3 hereto;
‘‘ Issuer
Free Writing Prospectus ’’ means each
‘‘issuer free writing prospectus’’ (as
defined in Rule 405 of the Rules and Regulations) prepared by
or on behalf of the Company or used or referred to by the Company
in connection with the offering of the Securities, including the
Final Term Sheet;
‘‘
Preliminary Prospectus ’’ means any preliminary
prospectus relating to the Securities, including the Base
Prospectus and any preliminary prospectus supplement thereto,
included in the Registration Statement or as filed with the
Commission pursuant to Rule 424(b) (‘‘ Rule
424(b )’’) under the Act and provided to the
Representatives for use by the Underwriters;
‘‘
Prospectus ’’ means the final prospectus
relating to the Securities, including the Base Prospectus and the
final prospectus supplement thereto relating to the Securities, as
filed with the Commission pursuant to Rule 424(b) and provided to
the Representatives for use by the Underwriters; and
‘‘
Registration Statement ’’ as of any time means
the Initial Registration Statement and any Additional Registration
Statement in the form then filed with the Commission, including any
amendment thereto, any document incorporated by reference
therein and any prospectus deemed or retroactively deemed to be a
part thereof that has not been superseded or modified.
‘‘ Registration Statement ’’ without
reference to a time means the Registration Statement as of the time
of the first
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contract of sale for the
Securities, which time shall be considered the
‘‘effective date’’ of the Registration
Statement. For purposes of this definition, information contained
in a form of prospectus or prospectus supplement that is deemed
retroactively to be a part of the Registration Statement pursuant
to Rule 430B shall be considered to be included in the
Registration Statement as of the time specified in
Rule 430B.
Any reference to the
‘‘ most recent Preliminary Prospectus
’’ will be deemed to refer to the latest Preliminary
Prospectus included in the Registration Statement or filed pursuant
to Rule 424(b) prior to or on the date hereof (including, for
purposes of this Agreement, any documents incorporated by reference
therein prior to or on the date of this Agreement). Any reference
to any Preliminary Prospectus or the Prospectus will be deemed to
refer to and include any documents incorporated by reference
therein pursuant to Form S-3 under the Act as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be. Any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus will be deemed to refer to and include
any document filed under the Securities Exchange Act of 1934, as
amended (the ‘‘ Exchange Act ’’),
after the date of such Preliminary Prospectus or the Prospectus, as
the case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be.
(ii) On the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the Rules and Regulations. On the
Effective Date of the Additional Registration Statement (if any),
each Registration Statement conformed, or will conform, in all
material respects to the requirements of the Act and the Rules and
Regulations. On the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each
conforms, the most recent Preliminary Prospectus conforms, and at
the time of filing of the Prospectus pursuant to Rule 424(b)
and as of the Closing Date, each Registration Statement and the
Prospectus will conform, in all material respects to the
requirements of the Act and the Rules and Regulations.
(iii) The
Company was at the time of filing of the Initial Registration
Statement, and continues to be, a ‘‘well-known seasoned
issuer’’ (as defined in Rule 405 of the Rules and
Regulations) and was not since the time of the filing of the
Initial Registration Statement, and continues not to be, an
‘‘ineligible issuer’’ (as defined in Rule
405 of the Rules and Regulations), in each case at all times
relevant under the Act in connection with the offering of the
Securities.
(iv) Each
Registration Statement did not, as of its Effective Date, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however ,
that no representation or warranty is made as to information
contained in or omitted from the Registration Statement in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, it being understood
that the only such information is that described as such in Section
8(b) hereof.
(v) The
Disclosure Package did not, as of the Applicable Time, does not, as
of the date hereof, and will not, as of the Closing Date, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however ,
that no representation or warranty is made as to information
contained in or omitted from the Disclosure Package in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, it being understood
that the only such information is that described as such in Section
8(b) hereof.
(vi) The
Prospectus, and any amendment or supplement thereto, will not, as
of its date and on the Closing Date, contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however , that no representation or
warranty is made as to information contained in or omitted from the
Prospectus in reliance
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upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein, it being understood that the only such
information is that described as such in Section 8(b)
hereof.
(vii) The
documents incorporated by reference in any Preliminary Prospectus
or the Prospectus did not, and any further documents incorporated
by reference therein will not, when filed with the Commission,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(viii) The
Commission has not issued any order preventing or suspending the
effectiveness of the Registration Statement or preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus; and no proceeding for any
such purpose or pursuant to Section 8A of the Act against the
Company or related to the offering of the Securities has been
instituted or threatened by the Commission. The Commission has not
issued any order directed to any document incorporated by reference
in the most recent Preliminary Prospectus or the Prospectus, and no
proceeding has been instituted or threatened by the Commission with
respect to any document incorporated by reference in the most
recent Preliminary Prospectus or the Prospectus. The Commission has
not notified the Company of any objection to the use of the form of
the Registration Statement.
(ix) Each
Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and
sale of the Securities or until any earlier date that the Company
notified or notifies the Representatives as described in the next
sentence, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement, the most recent
Preliminary Prospectus and the Prospectus. If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer
Free Writing Prospectus conflicted or would conflict with the
information then contained in the Registration Statement or
included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (a) the Company
has promptly notified or will promptly notify the Representatives
and (b) the Company has promptly amended or will promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission. The foregoing
two sentences do not apply to statements in or omissions from any
Issuer Free Writing Prospectus 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 is that described as such in Section 8(b)
hereof.
(x) Neither
the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business (exclusive of reinsurance treaties
and insurance policies covering third-party risks) from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as
of which information is given in any Registration Statement, the
most recent Preliminary Prospectus and the Prospectus, there has
not been any material adverse change in the capital stock, the
capital or surplus or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
shareholders’ equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated
in the most recent Preliminary Prospectus and the
Prospectus.
(xi) Neither
the Company nor any of Aspen Insurance UK Limited (‘‘
Aspen U.K .’’), Aspen Insurance Limited
(‘‘ Aspen Bermuda ’’) and Aspen
Specialty Insurance Company (‘‘ Aspen U.S
.’’ and, together with Aspen U.K. and Aspen Bermuda,
the ‘‘ Designated Subsidiaries ’’)
hold title to any real property; all of the leases, subleases and
licenses under which the Company or any of its
4
Designated Subsidiaries
holds real properties described in the most recent Preliminary
Prospectus and the Prospectus are in full force and effect, and
neither the Company nor any Designated Subsidiary has any notice of
any claim of any sort that has been asserted by anyone adverse to
the rights of the Company or any Designated Subsidiary under any of
the leases, subleases or licenses mentioned above, or affecting or
questioning the rights of the Company or such Designated Subsidiary
to the continued possession of the leased, subleased or licensed
premises under any such lease or sublease, except where the failure
to have such leases, subleases or licenses in full force and effect
or the failure to have any such notice of any such claim would not,
individually or in the aggregate, result in a material adverse
change in the condition, financial or otherwise, or in the
earnings, results of operations, business affairs,
shareholders’ equity or business prospects of the Company and
its subsidiaries, taken as a whole (a ‘‘ Material
Adverse Effect ’’).
(xii) The
Company has been duly incorporated and is validly existing as an
exempted company in good standing under the laws of Bermuda, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the most recent Preliminary
Prospectus and the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except where the failure to so qualify would not
result in a Material Adverse Effect; each of the Designated
Subsidiaries has been duly organized or incorporated and is validly
existing as a company or corporation in good standing (including,
in the case of Aspen Insurance Limited, as an exempted company)
under the laws of its jurisdiction of organization or
incorporation, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
most recent Preliminary Prospectus and the Prospectus, and has been
duly qualified as a foreign company or corporation for the
transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except
where the failure to so qualify would not result in a Material
Adverse Effect; and except for Aspen (UK) Holdings Limited
(‘‘ Aspen U.K. Holdings ’’), Aspen
Insurance UK Services Limited (‘‘ Aspen U.K.
Services ’’), Aspen U.S. Holdings, Inc.
(‘‘ Aspen U.S. Holdings ’’), Aspen
Specialty Insurance Management Inc. (‘‘ Aspen
Specialty ’’), Aspen Insurance U.S. Services Inc.
(‘‘ Aspen U.S. Services ’’), AIUK
Trustees Limited (‘‘ AIUK Trustees
’’) and Aspen Re America, Inc. (‘‘ Aspen
Re America ’’), none of which, other than Aspen
U.K. Holdings, is a ‘‘significant
subsidiary’’ of the Company as that term is defined in
Rule 1-02(w) of Regulation S-X of the Rules and Regulations, the
Designated Subsidiaries are the only subsidiaries of the
Company.
(xiii) The
Company has an authorized capitalization as set forth in the most
recent Preliminary Prospectus and the Prospectus, and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable
and conform to the description of share capital contained in the
Disclosure Package and the Prospectus; the Certificate of
Designation has been duly and validly authorized by the Company;
the Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the
Preference Shares contained in the most recent Preliminary
Prospectus and the Prospectus; and all of the currently issued and
outstanding shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and, except as set forth in the most recent
Preliminary Prospectus and the Prospectus, are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; the holders of outstanding shares
of capital stock of the Company are not entitled to preemptive or
other rights which have not been complied with; there are no
outstanding securities convertible into or exchangeable for, or
warrants, rights or options to purchase from the Company, or
obligations of the Company to issue, Preference Shares or any other
class of capital stock of the Company (except for (W) the options
to purchase the Ordinary Shares issued to Wellington Underwriting
plc (‘‘ Wellington ’’) and the
options to purchase Ordinary Shares issued to the Appleby Trust
(Bermuda) Limited, as trustee, which holds the securities for the
members of Syndicate 2020 who are not corporate members of
Wellington, (X) the
5
options to purchase
Ordinary Shares issued pursuant to the Company’s 2003 Share
Incentive Plan, (Y) the options to purchase Ordinary Shares issued
pursuant to the Company’s 2006 Stock Option Plan for
Non-Employee Directors, and (Z) the conversion rights associated
with the Company’s 5.625% Perpetual Preferred Income Equity
Replacement Securities); except as disclosed in the most recent
Preliminary Prospectus and the Prospectus, there are no
restrictions on subsequent transfers of the Securities under the
laws of Bermuda, as long as the Ordinary Shares are listed on the
New York Stock Exchange (the ‘‘ NYSE
’’), and of the United States; and except as disclosed
in the most recent Preliminary Prospectus and the Prospectus, no
party has the right to require the Company to register
securities.
(xiv) This
Agreement has been duly authorized, executed and delivered by the
Company.
(xv) There
are no currency exchange control laws or withholding taxes, in the
case of each of Bermuda or the United Kingdom (or any political
subdivision or taxing authority thereof) that would be applicable
to the payment of dividends (A) on the Securities by the Company
(other than as may apply to residents of Bermuda for Bermuda
exchange control purposes) or (B) by any of the Company’s
subsidiaries to the Company; the Bermuda Monetary Authority (the
‘‘ BMA ’’) has designated the
Company and Aspen Bermuda as non-resident for exchange control
purposes and has granted permission for the issue and free
transferability of the Securities pursuant to the Registration
Statement, as long as the Ordinary Shares are listed on the NYSE,
to and among persons who are non-residents of Bermuda for exchange
control purposes (including permission for the issue and free
transferability of up to 20% of the Securities to and among persons
who are residents of Bermuda for exchange control purposes); such
permission has not been revoked and is in full force and effect,
and the Company has no knowledge of any proceedings planned or
threatened for the revocation of such permission; the Company and
Aspen Bermuda are ‘‘exempted companies’’
under Bermuda law and have not (V) acquired and do not hold any
land for their respective business in Bermuda, other than that held
by way of lease or tenancy for terms of not more than 50 years,
without the express authorization of the Bermuda Minister of
Finance, (W) acquired and do not hold land by way of lease or
tenancy for terms of not more than 21 years in order to provide
accommodation or recreational facilities for their officers and
employees, without the express authority of the Bermuda Minister of
Finance, (X) taken mortgages on land in Bermuda to secure an amount
in excess of $50,000, without the consent of the Bermuda Minister
of Finance, (Y) acquired any bonds or debentures secured by any
land in Bermuda, except bonds or debentures issued by the
government of Bermuda or a public authority of Bermuda, or (Z)
conducted their business in a manner that is prohibited for
‘‘exempted companies’’ under Bermuda law;
neither the Company nor Aspen Bermuda has received notification
from the BMA or any other Bermuda governmental authority of
proceedings relating to the modification or revocation of its
designation as non-resident for exchange control purposes, its
permission to issue and transfer the Preference Shares or its
status as an ‘‘exempted
company’’.
(xvi) The
issue and sale of the Securities to be sold by the Company
hereunder, the execution, delivery and performance of this
Agreement, the Certificate of Designation, the compliance by the
Company with all of the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, (A) the
certificate of incorporation, memorandum of association, articles
of association, bye-laws, by-laws or other organizational document,
as amended (any such document, a ‘‘ Constitutional
Document ’’), as the case may be, of the Company or
any of its subsidiaries, (B) any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, or (C) any statute or any order, rule or regulation of any
court or governmental agency or body, any stock exchange authority
or any other regulatory authority (hereinafter referred to as a
‘‘ Governmental Agency ’’) having
jurisdiction over the Company or any of its subsidiaries or any of
their properties, except, in the case of clause (C), as would not,
individually or in the aggregate, result in a Material Adverse
Effect.
(xvii) No
consent, approval, authorization, order, registration or
qualification of or with any Governmental Agency (hereinafter
referred to as the ‘‘ Governmental
Authorizations ’’) is required
6
for the issue and sale
of the Securities or the consummation by the Company of the
transactions contemplated hereby, except (A) the registration under
the Act of the Securities, (B) such Governmental Authorizations as
have been duly obtained and are in full force and effect and copies
of which have been furnished to the Representatives, (C) such
Governmental Authorizations as may be required under state
securities laws, Blue Sky laws, insurance securities laws or any
laws of jurisdictions outside the United States in connection with
the purchase and distribution of the Securities by or for the
respective accounts of the Underwriters, (D) such consents,
approvals or authorizations required by the NYSE in connection with
the listing of the Securities, (E) the filing of the Prospectus
with the Registrar of Companies in Bermuda in accordance with
Bermuda law and (F) such consents, approvals, authorizations,
registrations or qualifications as may be required and have been
obtained from the BMA.
(xviii) Neither
the Company nor any of the Designated Subsidiaries is (A) in
violation of any of its Constitutional Documents or (B) in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement, or instrument to
which it is a party or by which it or any of its properties may be
bound, except, in the case of clause (B), for any such defaults or
violations that would not, individually or in the aggregate, result
in a Material Adverse Effect or as otherwise waived or consented to
by the parties or shareholders to which the Company or the
Designated Subsidiaries owes any obligations under such agreements
or documents.
(xix) No
stamp or other issuance or transfer taxes or duties and no capital
gains, income, withholding or other taxes are payable by or on
behalf of any Underwriter to Bermuda or any political subdivision
or taxing authority thereof or therein in connection with (A) the
sale and delivery of the Securities to or for the respective
accounts of the Underwriters or (B) the sale and delivery outside
Bermuda by the Underwriters of the Securities to the initial
purchasers thereof.
(xx) Except
as disclosed in the most recent Preliminary Prospectus and the
Prospectus, the Company has no knowledge of any threatened or
pending downgrading of the rating accorded the debt securities or
preferred shares of the Company or the financial strength or
claims-paying ability of the Company or any of the Designated
Subsidiaries by A.M. Best Company, Inc., Standard &
Poor’s Ratings Service, a Division of The McGraw-Hill
Companies, Inc. (‘‘ S&P ’’), or
Moody’s Investors Services, Inc. (‘‘
Moody’s ’’) (collectively, the
‘‘ Ratings Agencies ’’ and,
individually, a ‘‘ Rating Agency
’’). The Ratings Agencies are the only
‘‘nationally recognized statistical rating
organizations,’’ as that term is defined by the
Commission for purposes of Rule 463(g)(2) under the Act, which
currently rate the debt securities or preferred shares of the
Company or the financial strength or claims-paying ability of the
Company or any of the Designated Subsidiaries. None of the Ratings
Agencies and no other nationally recognized statistical rating
organization currently rates any other securities of the Company or
any securities of its subsidiaries.
(xxi) 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, result in a
Material Adverse Effect; and, to the best of the Company’s
knowledge, no such proceedings are threatened or contemplated by
any Governmental Agency or threatened by others.
(xxii) The
Company is not and, after giving effect to the offering and sale of
the Securities and the application of the net proceeds from such
sale as described in the most recent Preliminary Prospectus and the
Prospectus under the caption ‘‘Use of
Proceeds’’, will not be an ‘‘investment
company’’ as defined in the Investment Company Act of
1940, as amended.
(xxiii) Each
of the Designated Subsidiaries and Aspen Specialty is duly licensed
as an insurance brokerage company, insurer or reinsurer, as the
case may be, under the insurance laws and the rules, regulations
and interpretations of the insurance regulatory authorities
thereunder (collectively, ‘‘ Insurance Laws
’’) of each jurisdiction in which the conduct of its
existing business as described in the most recent Preliminary
Prospectus and the Prospectus requires such licensing, except for
such jurisdictions in which the failure to be so licensed would
not, individually or in the
7
aggregate, result in a
Material Adverse Effect; each of the Company, the Designated
Subsidiaries and Aspen Specialty has made all required filings
under applicable holding company statutes or other Insurance Laws
in each jurisdiction where such filings are required, except for
such jurisdictions in which the failure to make such filings would
not, individually or in the aggregate, result in a Material Adverse
Effect; except as described in the most recent Preliminary
Prospectus and the Prospectus, each of the Company, the Designated
Subsidiaries and Aspen Specialty has all other necessary
authorizations, approvals, orders, consents, certificates,
licenses, permits, registrations and qualifications of and from all
insurance regulatory authorities necessary to conduct their
respective existing businesses as described in the most recent
Preliminary Prospectus and the Prospectus and all of the foregoing
are in full force and effect, except where the failure to have such
authorizations, approvals, orders, consents, certificates, permits,
registrations or qualifications or their failure to be in full
force and effect would not, individually or in the aggregate,
result in a Material Adverse Effect; none of the Company, the
Designated Subsidiaries or Aspen Specialty has received any
notification from any insurance regulatory authority or other
governmental authority in the United States, Bermuda, the United
Kingdom or elsewhere to the effect that any additional
authorization, approval, order, consent, certificate, permit,
registration or qualification is needed to be obtained by either
the Company, the Designated Subsidiaries or Aspen Specialty to
conduct its existing business as described in the most recent
Preliminary Prospectus and the Prospectus; and except as otherwise
described in the most recent Preliminary Prospectus and the
Prospectus, no insurance regulatory authority has issued any order
or decree impairing, restricting or prohibiting the payment of
dividends by the Company or any of the Designated
Subsidiaries.
(xxiv) Each
of the Company and the Designated Subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management’s general or specific authorizations, (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (C)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (D)
assets as recorded are compared with the existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
(xxv) Each of
the Company and the Designated Subsidiaries has filed all statutory
financial returns, reports, documents and other information
required to be filed pursuant to the applicable Insurance Laws of
the United States and the various states thereof, Bermuda, the
United Kingdom and each other jurisdiction applicable thereto,
except where the failure, individually or in the aggregate, to file
such return, report, document or information would not result in a
Material Adverse Effect; and each of the Company and the Designated
Subsidiaries maintains its books and records in accordance with,
and is otherwise in compliance with, the applicable Insurance Laws
of the United States and the various states thereof, Bermuda, the
United Kingdom and each other jurisdiction applicable thereto,
except where the failure to so maintain its books and records or be
in compliance would not, individually or in the aggregate, result
in a Material Adverse Effect.
(xxvi) (A)
Any tax returns required to be filed by the Company or any of its
subsidiaries, other than Aspen U.S., Aspen U.K. and Aspen U.K.
Services, in any jurisdiction have been accurately prepared and
timely filed and any taxes, including any withholding taxes, excise
taxes, franchise taxes and similar fees, sales taxes, use taxes,
penalties and interest, assessments and fees and other charges due
or claimed to be due from such entities have been paid, other than
any of those being contested in good faith and for which adequate
reserves have been provided or any of those currently payable
without penalty or interest and (B) to the Company’s
knowledge, any tax returns required to be filed by Aspen U.S.,
Aspen U.K. and Aspen U.K. Services in any jurisdiction have been
accurately prepared and timely filed and any taxes, including any
withholding taxes, excise taxes, franchise taxes and similar fees,
sales taxes, use taxes, penalties and interest, assessments and
fees and other charges due or claimed to be due from Aspen U.S.
have been paid, other than any of those being contested in good
faith and for which adequate reserves have been provided or any of
those currently payable without penalty or interest, in either case
(1) except to the extent that the failure to so file or pay would
not result in a Material Adverse Effect and (2) other than those
tax returns that would be
8
required to be filed or
taxes that would be payable by the Company or any of its
subsidiaries if (a) any of them was characterized as a
‘‘personal holding company’’ as defined in
Section 542 of the Internal Revenue Code of 1986, as amended (the
‘‘ Code ’’), (b) any of them other
than Aspen Specialty, Aspen U.S., Aspen U.S. Holdings, Aspen U.S.
Services and Aspen Re America (collectively, the ‘‘
U.S. Subsidiaries ’’) was characterized as
engaged in a U.S. trade or business, and (c) any of them other than
Aspen U.K., Aspen U.K. Holdings, AIUK Trustees and Aspen U.K.
Services (collectively, the ‘‘ U.K. Subsidiaries
’’) was characterized as resident, managed and
controlled or carrying on a trade through a branch or agency in the
United Kingdom; no deficiency assessment with respect to a proposed
adjustment of the Company’s or any of its subsidiaries’
taxes is pending or, to the best of the Company’s knowledge,
threatened; and there is no tax lien, whether imposed by any
federal, state, or other taxing authority, outstanding against the
assets, properties or business of the Company or any of its
subsidiaries, in either case, which would have a Material Adverse
Effect.
(xxvii) Each
of the Company and Aspen Bermuda have received from the Bermuda
Minister of Finance an assurance under the Exempted Undertakings
Tax Protection Act 1966, as amended, of Bermuda to the effect set
forth in the most recent Preliminary Prospectus and the Prospectus
under the caption ‘‘Material Tax Considerations —
Taxation of Aspen Holdings and Subsidiaries —
Bermuda,’’ and the Company has not received any
notification to the effect (and is not otherwise aware) that such
assurance may be revoked or otherwise not honored by the Bermuda
government.
(xxviii) Based
upon and subject to the assumptions and qualifications set forth in
the most recent Preliminary Prospectus and the Prospectus under the
caption ‘‘Material Tax Considerations,’’
the Company does not believe (A) that either the Company or any of
its subsidiaries currently should be, or upon the sale of the
Securities contemplated hereby should be, (1) treated as a
‘‘passive foreign investment company’’ as
defined in Section 1297(a) of the Code, (2) characterized as a
‘‘personal holding company’’ as defined in
Section 542 of the Code, (3) except for the U.S. Subsidiaries,
considered to be engaged in a trade or business within the United
States for purposes of Section 864(b) of the Code (although the
Internal Revenue Service may be able to successfully assert that
Aspen U.K. has a U.S. trade or business and a U.S. permanent
establishment as a result of the binding authorities previously
granted to Wellington Underwriting Inc. by Aspen U.K. and likely
will be able to successfully assert that Aspen U.K. has a U.S.
trade or business and a permanent establishment as a result of the
binding authorities granted to Aspen Re America by Aspen U.K.), or
(4) except for the U.K. Subsidiaries, characterized as resident,
managed or controlled or carrying on a trade through a branch or
agency in the United Kingdom or (B) that any U.S. person who owns
shares of capital of the Company directly or indirectly through
foreign entities should be treated as owning (directly, indirectly
through foreign entities or by attribution pursuant to Section
958(b) of the Code) 10% or more of the total voting power of the
Company or any of its foreign subsidiaries; and to the best of the
Company’s knowledge, in the event that the Internal Revenue
Service were to be successful in asserting that Aspen U.K. has a
U.S. trade or business as a result of the binding authorities
previously granted to Wellington Underwriting Inc. and Aspen Re
America by Aspen U.K., it would not result in a Material Adverse
Effect.
(xxix) Aspen
U.K. and Aspen Bermuda intend to operate in a manner that is
intended to ensure that the ‘‘related person insurance
income’’ (as defined in Section 953(c)(2) of the Code)
of either of Aspen U.K. or Aspen Bermuda does not equal or exceed
20% of each such company’s gross insurance income for any
taxable year in the foreseeable future.
(xxx) The
audited consolidated financial statements included or incorporated
by reference in the Registration Statement, the most recent
Preliminary Prospectus and the Prospectus, together with the
related schedules and notes, present fairly, in all material
respects, the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement
of operations, shareholders’ equity and cash flows of the
Company and its consolidated subsidiaries for the periods
specified; except as otherwise disclosed in the Registration
Statement, the most recent Preliminary Prospectus and the
Prospectus, said consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles in the United States (‘‘ U.S. GAAP
’’) appl
