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EXHIBIT 1.1
THE PMI GROUP, INC.
___% NOTES DUE ____________, 2006
UNDERWRITING AGREEMENT
......................, 1996
Xxxxxxx, Xxxxx & Co.,
Xxxxxx Xxxxxxx & Co. Incorporated,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
The PMI Group, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
$100,000,000 principal amount of its ___% Notes Due ____________, 2006 (the
"Securities").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-....) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein
has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto but excluding Form T-1 and including (i) the
information contained in the form of final prospectus filed with the
Commission
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pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared
effective and (ii) the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time
such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of
the registration statement became effective, are hereinafter
collectively called the "Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus"; and any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter expressly for use
therein;
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(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements
of the Act and the Trust Indenture Act and the rules and regulations of
the Commission thereunder and do not and will not, as of the applicable
effective date of the Registration Statement and any amendment thereto
and as of the applicable filing date of the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter expressly for use therein;
(e) 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 material to the Company and its
subsidiaries considered as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been (x) any material addition, or any
development involving a prospective material addition, to the Company's
consolidated reserve for losses and loss adjustment expense, (y) any
change in the authorized capital stock of the Company or any of its
Principal Subsidiaries (as defined below) or any increase in excess of
$15.0 million in the aggregate in the consolidated short-term or
long-term debt of the Company or (z) any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, consolidated financial
position, stockholders' equity or results of operations (in each case
considered on either a statutory or GAAP basis) of the Company and its
subsidiaries considered as a whole, in each case otherwise than as set
forth or contemplated in the Prospectus;
(f) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and each subsidiary of the Company set forth in Schedule
II hereto (each a "Principal Subsidiary" and collectively the
"Principal Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(g) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock
of each consolidated subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and except as otherwise set
forth in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
(h) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will
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constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the indenture to be dated as of
................, 1996 (the "Indenture") between the Company and The
Bank of New York, as Trustee (the "Trustee"), under which they are to
be issued, which will be substantially in the form filed as an exhibit
to the Registration Statement; the Indenture has been duly authorized
and duly qualified under the Trust Indenture Act and, when executed and
delivered by the Company and the Trustee, will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Securities
and the Indenture will conform to the descriptions thereof in the
Prospectus;
(i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture and
this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any 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, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or By-laws of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or insurance regulatory authority or other
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties, in each case other than
such breaches, conflicts, violations or defaults which, individually or
in the aggregate, (x) would not have a material adverse effect on the
Company and its subsidiaries considered as a whole and (y) would not
affect the validity, performance or consummation of the transactions
contemplated by this Agreement; and no authorization, approval, order,
consent, license, certificate, permit, registration or qualification of
or with any such court or insurance regulatory authority or other
governmental agency or body is required to be obtained by the Company
or, in the case of insurance regulatory authorities, the Underwriters
in connection with their purchase and distribution of the Securities
pursuant to this Agreement for the sale of the Securities, or the
consummation by the Company of the transactions contemplated by this
Agreement, except (v) those which have been obtained; (w) the
registration under the Act of the Securities; (x) such authorizations,
approvals, orders, consents, licenses, certificates, permits,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters; and (y) such
authorizations, approvals, orders, consents, licenses, certificates,
permits, registrations or qualifications which (individually or in the
aggregate) the failure to make, obtain or comply with (a) would not
have a material adverse effect on the Company and its subsidiaries
considered as a whole and (b) would not affect the validity,
performance or consummation of the transactions contemplated by this
Agreement;
(j) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, 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;
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(k) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(l) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(m) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes; and
(n) To the best of the Company's knowledge, Deloitte & Touche LLP,
who have certified certain financial statements of the Company and its
subsidiaries, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of .....% of the principal amount thereof, plus accrued interest[, IF
ANY,] from ...................., 1996 to the Time of Delivery hereunder, the
principal amount of Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor in
same-day funds, by causing DTC to credit the Securities to the account of
Xxxxxxx, Sachs & Co. at DTC. The Company will cause the certificate representing
the Securities to be made available to Xxxxxxx, Xxxxx & Co. for checking at
least twenty-four hours prior to the Time of Delivery (as defined below) at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of such delivery and payment shall be 7:00 a.m., San Francisco time, on
....................., 1996 or such other time and date as Xxxxxxx, Sachs & Co.
and the Company may agree upon in writing. Such time and date are herein called
the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 7(j) hereof, will be delivered at the offices of Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
(the
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"Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at ......... p.m., San Francisco time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. As used herein, "New York Business Day" shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York City are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to the Time of
Delivery, unless you shall have had a reasonable opportunity to review and
comment on any such amendment or supplement prior to any filing thereof; to
advise you, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To use its best efforts to cause to be furnished to the Underwriters
prior to noon, New York Time, on the New York Business Day next succeeding the
date of this Agreement, and from time to time thereafter to furnish, the
Underwriters copies of the Prospectus in New York City in such quantities as you
may reasonably request, and, if the delivery of a prospectus is required at any
time prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Securities and if at
such time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
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Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales of any
of the Securities at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earning
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the Time of Delivery or such earlier time as you may notify the
Company, not to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any debt securities of the Company which mature more than
one year after the Time of Delivery and which are substantially similar to the
Securities without your prior written consent;
(f) During a period of five years from the effective date of the
Registration Statement, to furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent public
accountants);
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which the Securities or any class of securities of the Company is
listed (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds"; and
(i) If the Company elects to rely upon Rule 462(b), to file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b) by
10:00 P.M., Washington, D.C. time, on the date of this Agreement, and, at the
time of filing, to either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with each of the Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement,
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any Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement between
Underwriters, this Agreement, the Indenture, the Blue Sky and Legal Investment
Memoranda, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all reasonable expenses in connection with the qualification
of the Securities for offering and sale under state securities laws as provided
in Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment Memoranda; (iv) any fees charged by securities
rating services for rating the Securities; (v) the filing fees incident to any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vi) the cost of preparing the Securities;
(vii) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; and (viii) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, shall have furnished
to you such opinion or opinions (a draft of each such opinion is attached as
Annex I(a) hereto), dated the Time of Delivery, with respect to the
incorporation of the Company, the validity of the Indenture and the Securities
being delivered at the Time of Delivery, the Registration Statement, the
Prospectus, and other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, as counsel for the Company, shall
have furnished to you their written opinion or opinions (a draft of each such
opinion is attached as Annex I(b) hereto), dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) This Agreement has been duly authorized, executed and
delivered by the Company;
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(iii) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its Principal Subsidiaries is a party or by which the Company or
any of its Principal Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Principal Subsidiaries
is subject, nor will such actions result in any violation of any U.S.
statute or any order, rule or regulation known to such counsel of any
U.S. court or regulatory authority or governmental agency or body
having jurisdiction over the Company or any of its Principal
Subsidiaries or any of their properties (other than those relating to
misrepresentation or fraud or made or established by any insurance
official or regulatory authority as to which no opinion need be given),
in each case other than such breaches, conflicts, violations or
defaults which, individually or in the aggregate, (x) would not have a
material adverse effect on the Company and its subsidiaries considered
as a whole and (y) would not affect the validity, performance or
consummation of the transactions contemplated by this Agreement, nor
will such actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company;
(iv) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture; and the Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus;
(v) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;
(vi) The information in the Prospectus under the caption
"Description of Notes", to the extent that it constitutes matters of
law or legal conclusions and to the extent that it summarizes the
documents referred to therein, has been reviewed by such counsel and is
correct in all material respects; and
(vii) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the
Time of Delivery as of their respective effective or issue date
complied as to form in all material respects with the requirements of
the Act and the rules and regulations thereunder; although such counsel
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus, except for those referred to in the opinion in
subsection (vi) of this Section 7(c), nothing has come to the attention
of such counsel to cause it to believe that, as of its effective date,
the Registration Statement or any further amendment thereto made by the
Company prior to the Time of Delivery contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to the Time
of Delivery contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
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not misleading, or that, as of the Time of Delivery, the Prospectus or
any further amendment or supplement (when considered together with the
document to which such supplement relates) thereto made by the Company
prior to the Time of Delivery contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel need
not make any comment with respect to the financial statements and
financial and accounting data and related schedules contained in the
Registration Statement or the Prospectus or the Statement of
Eligibility and Qualification of the Trustee); and such counsel does
not know of any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference therein which are not filed or incorporated
by reference as required.
(d) Xxxxxx X. Breed, Senior Vice President, General Counsel and Secretary
of the Company, shall have furnished to you his written opinion or opinions (a
draft of each such opinion is attached as Annex II(c) hereto), dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company has an authorized equity capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(ii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification or is subject to no
liability or disability material to the Company and its subsidiaries,
considered as a whole, by reason of the failure to be so qualified in
any such jurisdiction (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact relating to such opinion upon certificates
of officers of the Company, provided that such counsel shall state that
he believes that both you and he are justified in relying upon such
opinions and certificates);
(iii) PMI Mortgage Insurance Co. has been duly incorporated and is
validly existing as an insurance corporation under the laws of the
State of Arizona, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
all of the issued shares of capital stock of PMI Mortgage Insurance Co.
have been duly and validly authorized and issued and are fully paid
and, except as provided in Article XIV, Section 11, of the Constitution
of the State of Arizona, non-assessable (such counsel being entitled to
rely in respect of the opinion in this clause upon an opinion of local
counsel, provided that such counsel shall state that he believes that
both you and he are justified in relying upon such opinion);
(iv) Each Principal Subsidiary is duly licensed or authorized as an
insurer or reinsurer in each other jurisdiction where it is required to
be so licensed, or is subject to no liability or disability material to
the Company and its subsidiaries considered as a whole by reason of the
failure to be so licensed or authorized in any such jurisdiction; the
Company and each Principal Subsidiary have made all required filings
under applicable insurance holding company statutes; the Company and
each Principal Subsidiary have all other necessary authorizations,
approvals, orders, consents, licenses, certificates, permits,
registrations or qualifications of and from all insurance regulatory
authorities to conduct their respective businesses as described in the
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Prospectus, or are subject to no material liability or disability by
reason of the failure to have such authorizations, approvals, orders,
consents, licenses, certificates, permits, registrations or
qualifications; and to the best of such counsel's knowledge, none of
the Company or any Principal Subsidiary has received any notification
from any insurance regulatory authority to the effect that any
additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification from such insurance
regulatory authority is needed to be obtained by any of the Company or
any Principal Subsidiary in any case where it could be reasonably
expected that (x) the Company or any Principal Subsidiary would in fact
be required either to obtain any such additional authorization,
approval, order, consent, license, certificate, permit, registration or
qualification or cease or otherwise limit writing certain business and
(y) obtaining such authorization, approval, order, consent, license,
certificate, permit, registration or qualification or limiting such
business would have a material adverse effect on the business,
financial position or results of operations of the Company and its
subsidiaries, considered as a whole;
(v) To the best of such counsel's knowledge, each Principal
Subsidiary is in compliance with the requirements of the insurance laws
and regulations of its state of incorporation and the insurance laws
and regulations of other jurisdictions which are applicable to such
subsidiary, and has filed all notices, reports, documents or other
information required to be filed thereunder, or is subject to no
material liability or disability by reason of the failure to so comply
or file (such counsel being entitled to rely in respect of matters of
fact relating to the opinion in this clause upon certificates of
officers of the Company or its subsidiaries, provided that such counsel
shall state that he believes that both you and he are justified in
relying upon such certificates, and in respect of the opinion in this
clause upon opinions of local counsel provided that such counsel shall
state that he believes that both you and he are justified in relying
upon such opinions);
(vi) All statements made in the Prospectus with respect to existing
and proposed federal and state statutes, regulations and rules, and, to
the best of such counsel's knowledge, with respect to regulatory
policies and practices, fairly and accurately present the information
set forth therein in all material respects (such counsel being entitled
to rely in respect of the opinion in this clause upon opinions of
outside counsel, provided that such counsel shall state that he
believes that both you and he are justified in relying upon such
opinions);
(vii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, considered as a whole; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(viii) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such
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counsel 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, nor will such actions result in any violation of any U.S.
statute or any order, rule or regulation known to such counsel of any
U.S. court or regulatory authority or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their properties (other than those relating to misrepresentation or
fraud), in each case other than such breaches, conflicts, violations or
defaults which, individually or in the aggregate, (x) would not have a
material adverse effect on the Company and its subsidiaries considered
as a whole and (y) would not affect the validity, performance or
consummation of the transactions contemplated by this Agreement, nor
will such actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Securities or the consummation
by the Company of the transactions contemplated by this Agreement or
the Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters, in each case other
than such approval, authorization, order, registration or qualification
which (individually or in the aggregate) the failure to make, obtain or
comply with (x) would not have a material adverse effect on the Company
and its subsidiaries considered as a whole and (y) would not affect the
validity, performance or consummation of the transactions contemplated
by this Agreement;
(x) Without limitation of the foregoing, the Company and its
subsidiaries, as applicable, have filed all notices, reports, documents
or other information required to be filed pursuant to, and have
obtained all authorizations, approvals, orders, consents, licenses,
certificates, permits, registrations or qualifications required to be
obtained under, and have otherwise complied with all requirements of,
all insurance laws and regulations applicable to the Company and its
subsidiaries in connection with the issuing and sale of the Securities,
in each case other than such filings, authorizations, approvals,
orders, consents, licenses, certificates, permits, registrations or
qualifications which (individually or in the aggregate) the failure to
make, obtain or comply with (x) would not have a material adverse
effect on the Company and its subsidiaries considered as a whole and
(y) would not affect the validity, performance or consummation of the
transactions contemplated by this Agreement;
(xi) Such counsel does not know of any amendment to the
Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or
described as required; and
(xii) At the Time of Delivery, such counsel shall also have
furnished you a letter, dated the date thereof, advising you that as
general counsel to the Company, such counsel (or members of his staff)
reviewed the Registration Statement and Prospectus, and he and members
of his staff participated in various discussions with representatives
of the Underwriters and of the Company and its accountants at which
contents of the Registration Statement and Prospectus were discussed;
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements
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contained in the Registration Statement and Prospectus (except as
otherwise expressly set forth), on the basis of the foregoing, no facts
have come to the attention of such counsel in the course of such review
which has caused such counsel to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made
by the Company prior to the Time of Delivery (other than the financial
statements and financial and accounting data and related schedules
therein, as to which no advice need be given) contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than the financial statements and financial
and accounting data and related schedules therein, as to which no
advice need be given) contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or that, as of the Time of Delivery, the Prospectus or
any further amendment or supplement (when considered together with the
document to which such supplement relates) thereto made by the Company
prior to the Time of Delivery (other than the financial statements and
financial and accounting data and related schedules therein, as to
which no advice need be given) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(e) On the date of the Prospectus at a time prior to the execution of this
Agreement and at the Time of Delivery, Deloitte & Touche LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex II hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been (x) any addition, or any development
involving a prospective addition, to the Company's consolidated reserve for
losses and loss adjustment expense, (y) any change in the authorized capital
stock of the Company or any of its Principal Subsidiaries, or any increase in
the consolidated long-term debt of the Company, or (z) any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations
(in each case considered on either a statutory or GAAP basis) of the Company and
its subsidiaries, in each case otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in Clause (i) or
(ii), is in your judgment (after consultation with the Company) so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities or the Company's financial
strength or PMI's claims paying ability by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or the
Company's financial strength or PMI'S claims paying ability, the effect of
which, in any such case described in clause (i) or (ii), is in your judgment
(after consultation with the Company) so material and adverse as to make it
impracticable or inadvisable to
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proceed with the public offering or the delivery of the Securities on the terms
and in the manner contemplated in the Prospectus;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(j) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company satisfactory to you
as to the accuracy of the representations and warranties of the Company herein
at and as of such Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of this Section
and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement (when considered
together with the document to which such supplement relates) thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
expressly for use therein and provided, further, that the Company shall not be
liable to any Underwriter under the indemnity agreement in this subsection (a)
with respect to any Preliminary Prospectus to the extent that any such loss,
claim, damage or liability of such Underwriter results from the fact such
Underwriter sold Securities to a person as to whom it shall be established that
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus in any case where such delivery is required by
the Act if the Company had previously furnished copies thereof in sufficient
quantities to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in the Preliminary Prospectus which was (i) identified to such
Underwriter at or prior to the earlier of the filing with the Commission or the
furnishing to such Underwriter of the corrected Prospectus and (ii) corrected in
the Prospectus.
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(b) Each Underwriter will 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 an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement (when considered together with the document to which
such supplement relates) thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying party,
and who may act in respect of actions involving more than one indemnified
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. Notwithstanding anything to the contrary
in this Section 8, an indemnifying party shall only be liable for the legal fees
and expenses of one national counsel and appropriate local counsel for the
indemnified parties with respect to any proceeding or related proceedings.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company 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 (or
actions in respect thereof), 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
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the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. 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 on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this subsection
(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (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 8 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 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If either Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein. If within thirty-six hours after such
default by either Underwriter you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
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(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter by you and the Company as provided in
subsection (a) above, the aggregate principal amount of such Securities which
remains unpurchased does not exceed one-eleventh of the aggregate principal
amount of all the Securities, then the Company shall have the right to require
the non-defaulting Underwriter to purchase the principal amount of Securities
which such Underwriter agreed to purchase hereunder and, in addition, to require
the non-defaulting Underwriter to purchase the Securities of the defaulting
Underwriter for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter by you and the Company as provided in
subsection (a) above, the aggregate principal amount of Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right described in
subsection (b) above to require the non-defaulting Underwriter to purchase
Securities of the defaulting Underwriter, then this Agreement shall thereupon
terminate, without liability on the part of the non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of either Underwriter or any controlling person of either Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to either Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Securities, but the Company shall then be under no
further liability to either Underwriter except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of the
Underwriters made or given by you jointly or by Xxxxxxx, Xxxxx & Co. on their
behalf.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission in care of Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and if to the Company
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
General Counsel; provided, however, that any notice to an Underwriter pursuant
to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
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13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between each of the Underwriters and the Company.
Very truly yours,
The PMI Group, Inc.
By: .................................
Name:
Title:
Accepted as of the date hereof:
....................................
(Xxxxxxx, Xxxxx & Co.)
Xxxxxx Xxxxxxx & Co. Incorporated
By: .............................
Name:
Title:
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SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ----------
Xxxxxxx, Sachs & Co........................................................ $
Xxxxxx Xxxxxxx & Co. Incorporated..........................................
Total.................................................... $100,000,000
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SCHEDULE II
JURISDICTION
OF
PRINCIPAL SUBSIDIARIES INCORPORATION
-------------------------- -----------------------
American Pioneer Title Insurance Company.................................. Florida
PMI Mortgage Insurance Co. ............................................... Arizona
Residential Guaranty Co. ................................................. Arizona
22
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial
information) audited by them and included in the Prospectus or 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 thereunder; and they have made a review
in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim
financial statements, and any supplementary financial information and
schedules, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, and, as indicated in their report
thereon, copies of which have been furnished to the Underwriters;
(iii) The unaudited financial information with respect to the
consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of
a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus 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 thereunder;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
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any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock or any increase in the consolidated
short-term or long-term debt or consolidated reserve for
losses and loss adjustment expenses, or any decreases in
consolidated fixed income securities available for sale,
consolidated equity securities, consolidated total investments
or stockholders' equity, or any decrease in PMI's unassigned
funds, contingency reserve or statutory capital, or other
items specified by the Underwriters, in each case as compared
with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; or
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in clause (E) there were any decreases in
consolidated premiums earned, consolidated net investment
income, consolidated realized capital gains, consolidated
total revenue or consolidated net income, or other items
specified by the Underwriters, or any increases in any items
specified by the Underwriters, in each case as compared with
the comparable period of the preceding year and with any other
period of corresponding length specified by the Underwriters,
except in each case for decreases or increases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(ii) and (iv) above, they have carried out certain procedures as
specified in their letter, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Underwriters,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Prospectus, or in Part II of,
or in exhibits and schedules to, the Registration Statement specified
by the Underwriters, and have compared certain of such specified
amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be
in agreement.
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