Delphi Financial Group, Inc. Junior Subordinated Debentures Underwriting Agreement
Exhibit 1.1
Delphi Financial Group, Inc.
Junior Subordinated Debentures
May 16, 2007
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Capital Markets, LLC
000 Xxxxx Xxxxxxx Xxxxxx
XX 0000
Xxxxxxxxx, XX 00000
000 Xxxxx Xxxxxxx Xxxxxx
XX 0000
Xxxxxxxxx, XX 00000
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
As Representatives of the several underwriters
named in Schedule I to the Pricing Agreement
named in Schedule I to the Pricing Agreement
Ladies and Gentlemen:
From time to time Delphi Financial Group, Inc., a Delaware corporation (the “Company”),
proposes to enter into one or more Pricing Agreements (each, a “Pricing Agreement”) in the form of
Annex I hereto, with such additions and deletions as the parties thereto may determine, and,
subject to the terms and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the “Underwriters” with
respect to such Pricing Agreement and the securities specified therein) certain of its Junior
Subordinated Debentures (the “Securities”) specified in Schedule II to such Pricing Agreement (with
respect to such Pricing Agreement, the “Firm Securities”). If specified in such Pricing Agreement,
the Company may grant to the Underwriters the right to purchase at their election additional Junior
Subordinated Debentures specified in such Pricing Agreement as provided in Section 3 hereof (the
“Optional Securities”). The Firm Securities and the Optional Securities, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein collectively called the
“Designated Securities”.
The terms and rights of any particular issuance of Designated Securities shall be as specified
in the Pricing Agreement relating thereto and in or pursuant to the indenture (the “Indenture”)
identified in such Pricing Agreement.
Section 1. Particular sales of Designated Securities may be made from time to time to the
Underwriters of such Designated Securities, for whom the firms designated as representatives of the
Underwriters of such Designated Securities in the Pricing Agreement relating thereto will act as
representatives (the “Representatives”). The term “Representatives” also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act
without any firm being designated as its or their representatives. This agreement (this
“Underwriting Agreement”) shall not be construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase any of the Securities. The
obligation of the Company to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with
respect to the Designated Securities specified therein. Each Pricing Agreement shall specify the
aggregate principal amount of such Firm Securities, the maximum aggregate principal amount of
Optional Securities, if any, the initial public offering price of such Designated Securities, the
purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such Underwriters and the principal
amount of such Designated Securities to be purchased by each Underwriter and shall set forth the
date, time and manner of delivery of such Firm Securities and Optional Securities and payment
therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Indenture
and the registration statement and prospectus with respect thereto) the terms of such Designated
Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
Section 2. The Company represents and warrants to, and agrees with, each of the Underwriters
that, as of the date hereof:
(i) An “automatic shelf registration statement” as defined under Rule 405 under the
Securities Act of 1933, as amended (the “Act”), on Form S-3 (File No. 333-142932) in
respect of the Designated Securities, has been filed with the Securities and Exchange
Commission (the “Commission”) not earlier than three years prior to the date hereof; such
registration statement, and any post-effective amendment thereto became effective on filing
pursuant to Rule 462(c) of the Act; and no stop order suspending the effectiveness of such
Registration Statement or any part thereof has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission, and no notice of objection of
the Commission to the use of such registration statement or any post-effective amendment
thereto pursuant to Rule 401(g)(2) under the Act has been received by
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the Company (the base prospectus filed as part of such registration statement, in the
form in which it has most recently been filed with the Commission on or prior to the date
of this Agreement, is hereinafter called the “Basic Prospectus”; any preliminary prospectus
(including any preliminary prospectus supplement) relating to the applicable Designated
Securities filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter
called a “Preliminary Prospectus”; the various parts of such registration statement,
including all exhibits thereto but excluding the Form T-1 and including any prospectus
supplement relating to the Securities that is filed with the Commission and deemed by
virtue of Rule 430B to be part of such registration statement, each as amended at the time
such part of the registration statement became effective, are hereinafter collectively
called the “Registration Statement”; the Basic Prospectus, as amended and supplemented
(including as supplemented by Preliminary Prospectus) immediately prior to the Applicable
Time (with respect to an offering of Designated Securities, has the meaning set forth in
the applicable Pricing Agreement) relating to the applicable Designated Securities, is
hereinafter called the “Pricing Prospectus”; the form of the final prospectus relating to
the applicable Designated Securities filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof is hereinafter called the
“Prospectus”; any reference herein to the Basic Prospectus, the Pricing Prospectus, 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 prospectus; any reference to any amendment or supplement to the
Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any post-effective amendment to the Registration Statement, any prospectus
supplement relating to the applicable Designated Securities filed with the Commission
pursuant to Rule 424(b) under the Act and any documents filed under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and incorporated therein, in each case after
the date of the Basic Prospectus, such Preliminary Prospectus, or the Prospectus, as the
case may be; 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 Registration Statement that is
incorporated by reference in the Registration Statement; and any “issuer free writing
prospectus” as defined in Rule 433 under the Act relating to the applicable Designated
Securities is hereinafter called an “Issuer Free Writing Prospectus”);
(ii) No order preventing or suspending the use of any Preliminary Prospectus or any
Issuer Free Writing 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 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
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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 through the Representatives expressly for use therein;
(iii) The Pricing Prospectus as supplemented by the final term sheet relating to the
applicable Designated Securities prepared and filed pursuant to Section 5(a) hereof, taken
together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did
not include any 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, not misleading; and each Issuer Free Writing Prospectus listed on
Schedule III(a) to the applicable Pricing Agreement does not conflict with the information
contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each
such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing
Disclosure Package as of the Applicable Time, did not include any 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, not misleading;
provided, however, that this representation and warranty shall not apply to statements or
omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein;
(iv) The documents incorporated by reference into any Preliminary Prospectus, the
Prospectus and the Pricing Prospectus, at the time they were or are filed with the
Commission, conform or will conform in all material respects, as the case may be, with the
requirements of the Act and the rules and regulations of the Commission thereunder and the
Exchange Act and the rules and regulations of the Commission thereunder, and did not or
will not, as the case may be, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or supplement
thereto (for so long as any Underwriter has a prospectus delivery obligation under the
Act), 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 through the Representatives expressly for use therein; and
no such
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documents were filed with the Commission since the Commission’s close of business on
the business day immediately prior to the date of the applicable Pricing Agreement and
prior to the execution of the applicable Pricing Agreement, except as set forth on Schedule
III(b) to such Pricing Agreement;
(v) The Registration Statement conforms, and the Prospectus and any further amendments
or supplements to the Registration Statement and the Prospectus will conform, 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 do not and will not, as of the applicable effective date as to each part of
the Registration Statement and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein;
(vi) Ernst & Young LLP, whose report is included or incorporated by reference in the
Pricing Prospectus, are independent certified public accountants with respect to the
Company and its Significant Subsidiaries (as defined in Annex II to the applicable Pricing
Agreement), as required by the Act and the rules and regulations of the Commission
thereunder. The financial statements (including the related notes and supporting
schedules) included or incorporated by reference in the Registration Statement, the
Preliminary Prospectus and the Pricing Prospectus present fairly in all material respects
the financial condition, results of operations and cash flows of the entities purported to
be shown thereby at the dates and for the periods indicated and have been prepared in
accordance with generally accepted accounting principles applied on a consistent basis
throughout the periods indicated and conform in all material respects with the rules and
regulations, except as otherwise noted therein; and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly in all material
respects the information required to be stated therein;
(vii) Each of the Company and its Significant Subsidiaries has been duly incorporated,
organized or formed and is validly existing in good standing under the laws of the
jurisdiction of its incorporation, organization or formation, with full power and authority
to own, lease and operate its properties and conduct its business and to enter into and
perform its obligations under this Underwriting Agreement and the Indenture; and each of
the Company and its Significant Subsidiaries is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the business conducted by it
or the location of the properties owned, leased or operated by it make such qualification
necessary, except where the failure to so qualify would not, individually or in the
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aggregate, have a material adverse effect on the condition (financial or other),
results of operations, business or prospects of the Company and its Significant
Subsidiaries taken as a whole;
(viii) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, and except as otherwise described in the
Registration Statement or the Pricing Prospectus, (i) the Company and the Significant
Subsidiaries, considered as a whole, have not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction, in each case,
other than in the ordinary course of business; (ii) each of the Company and the Significant
Subsidiaries has not purchased any of its outstanding capital stock nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends except as disclosed in writing to the Underwriters; and
(iii) there has not been any material change in (A) the short-term debt or long-term debt
of the Company and the Significant Subsidiaries considered as a whole or (B) the capital
stock of the Company and the Significant Subsidiaries considered as a whole;
(ix) All of the outstanding shares of capital stock of each Significant Subsidiary of
the Company that is a corporation have been duly authorized and validly issued and are
fully paid and non assessable. Except as disclosed in the Prospectus, all of the
outstanding shares of capital stock, partnership interests or other ownership interests of
each Significant Subsidiary of the Company are owned directly or indirectly by the Company,
free and clear of any claim, lien, encumbrance, security interest, restriction upon voting
or transfer, preemptive rights or any other claim of any third party (collectively,
“Liens”), except such as are described in the Prospectus or in a document filed as an
exhibit to the Registration Statement and such Liens that would not have a material adverse
effect on the condition (financial or other) results of operations, business or prospectus
of the Company and its Significant Subsidiaries taken as a whole;
(x) Except as described in or contemplated by the Registration Statement and the
Pricing Prospectus, there has not been any material adverse change in, or adverse
development which, individually or in the aggregate, materially affects or may materially
affect, the condition (financial or other), results of operations, business or prospects of
the Company and its subsidiaries taken as a whole from the respective dates as of which
information is given in the Registration Statement and the Pricing Prospectus;
(xi) Neither (i) the execution or delivery hereof by the Company, (ii) the
consummation of the transactions contemplated hereby, (iii) the execution and delivery of
the Indenture and the Designated Securities by the Company nor (iv) compliance by the
Company with any of the provisions of this Underwriting Agreement, the Indenture or the
Designated Securities, will result in a breach or
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violation of, or constitute a default under, the certificate of incorporation,
by-laws, partnership agreement or other governing documents of the Company or any of its
subsidiaries, or any agreement, indenture or other instrument to which the Company or any
of its subsidiaries is a party or by which any of them is bound, or to which any of their
properties is subject, nor will any such action or the performance by the Company of its
obligations hereunder violate any law, rule, administrative regulation or decree of any
court, or any governmental agency or body having jurisdiction over the Company, its
subsidiaries or any of their respective properties, or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or asset of the Company or any
of its subsidiaries except for a breach, violation, default, lien, charge, claim or
encumbrance which would not have a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its subsidiaries
taken as a whole. Except for permits, consents, approvals and similar authorizations
required under the Act or the rules and regulations of the Commission thereunder or “Blue
Sky” or state securities laws and the qualification of the Indenture under the Trust
Indenture Act, and except for such permits, consents, approvals and authorizations which
have been obtained, no permit, consent, approval, authorization or order of any court,
governmental agency or body or financial institution is required in connection with the
consummation of the transactions contemplated by this Underwriting Agreement or the
applicable Pricing Agreement;
(xii) This Underwriting Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding agreement of the Company;
(xiii) Neither the Company nor any of its subsidiaries (i) is in violation of its
certificate of incorporation or by-laws or other governing documents, (ii) is in default
and no event has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or condition
contained in any agreement, indenture or other instrument to which it is a party or by
which it is bound or to which any of its properties is subject, except for any such
defaults that would not, individually or in the aggregate, have a material adverse effect
on the condition (financial or other), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or its property may be
subject, except for any such violations that would not, individually or in the aggregate,
have a material adverse effect on the condition (financial or other), results of
operations, business or prospects of the Company and its subsidiaries taken as a whole;
(xiv) The Indenture has been duly and validly authorized and, when it is executed and
delivered by the Company, will constitute a valid and binding
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agreement of the Company, enforceable against the Company in accordance with its
terms, except (i) as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting creditors’ rights generally and by
general equity principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and (ii) to the extent the indemnification provisions
contained therein may be limited by principles of public policy. The Indenture (i) has
been duly qualified under the Trust Indenture Act and (ii) conforms in all material
respects to the description thereof in the Registration Statement and the Prospectus;
(xv) The Designated Securities have been duly and validly authorized by the Company
for issuance and sale to the Underwriters pursuant to this Underwriting Agreement and, when
executed by the Company and authenticated by the Trustee in accordance with the Indenture
and delivered to the Underwriters against payment therefor in accordance with the terms
hereof and the applicable Pricing Agreement, will have been validly issued and delivered,
free of any preemptive or similar rights to subscribe to or purchase the same arising by
operation of law or under the certificate of incorporation or by-laws of the Company or
otherwise, and will constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of creditors’ rights generally and by
general equitable principles and the Designated Securities conform, or will conform, in all
material respects to the description thereof in the Registration Statement and the Pricing
Prospectus. Neither the filing of the Registration Statement nor the offering or sale of
any of the Securities as contemplated by this Underwriting Agreement gives rise to any
rights, other than those which have been duly waived or satisfied, for or relating to the
registration of any securities of the Company. The capitalization of the Company was, as
of the date of the most recent balance sheet included in the Pricing Prospectus, as set
forth in the Pricing Prospectus. The Company has all requisite corporate power and
authority to issue, sell and deliver the Designated Securities in accordance with and upon
the terms and conditions set forth in this Underwriting Agreement and in the Registration
Statement and Pricing Prospectus. All corporate action required to be taken by the Company
for the authorization, issuance, sale and delivery of the Designated Securities to be sold
by the Company hereunder has been validly and sufficiently taken;
(xvi) There is no litigation or governmental proceeding to which the Company or any of
its subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject or which is pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries that could reasonably be expected to,
individually or in the aggregate, result in a material adverse effect on the condition
(financial or other), results of operations, business or prospects of the Company and its
subsidiaries taken as a
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whole or which is required to be disclosed in the Pricing Prospectus and is not
disclosed. There are no statutes or regulations required to be described in the
Registration Statement or the Pricing Prospectus which are not described as required;
(xvii) The statements set forth in the Pricing Prospectus under the caption
“Description of the Junior Subordinated Debentures”, insofar as they purport to describe
the provisions of the documents referred to therein or constitute a summary of the terms of
the Securities are accurate, complete and fair in all material respects;
(xviii) (A) (i) At the time of filing the Registration Statement, (ii) at the time of
the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of
the Act (whether such amendment was by post-effective amendment, incorporated report filed
pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (iii) at
the time the Company or any person acting on its behalf (within the meaning, for this
clause only, of Rule 163(c) under the Act) made any offer relating to the Designated
Securities in reliance on the exemption of Rule 163 under the Act, the Company was a
“well-known seasoned issuer” as defined in Rule 405 under the Act; and (B) at the earliest
time after the filing of the Registration Statement that the Company or another offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of
the Designated Securities, the Company was not an “ineligible issuer” as defined in Rule
405 under the Act;
(xix) The Company is not required to be licensed as an insurance company; Reliance
Standard Life Insurance Company of Texas (“RSLIC-Texas”), Reliance Standard Life Insurance
Company (“RSLIC”), First Reliance Standard Life Insurance Company (“FRSLIC”), and Safety
National Casualty Corporation (“SNCC”; RSLIC-Texas, RSLIC, FRSLIC and SNCC are
collectively, the “Insurance Subsidiaries”) are each duly licensed as insurers under the
insurance laws and regulations of Texas, Illinois, New York and Missouri, respectively; and
the Insurance Subsidiaries have filed with the appropriate insurance regulatory authorities
all reports, documents and other information required to be filed under the insurance laws
of Texas, Illinois, New York, and Missouri, respectively, except as to filings the failure
of which to make, singly or in the aggregate, would not be reasonably expected to have a
material adverse effect on general affairs, financial position, stockholders’ equity or
results of operations of the Company and its subsidiaries considered as one enterprise or
on the Insurance Licenses (as defined below);
(xx) Each of the Insurance Subsidiaries holds such licenses, certificates, authorities
and permits from governmental authorities (including, without limitation, insurance
licenses from the insurance regulatory agencies of the various states where it conducts
business (the “Insurance Licenses”)) which
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are necessary to the conduct of its insurance businesses as presently operated; the
Insurance Subsidiaries have fulfilled and performed all obligations necessary to maintain
the Insurance Licenses; there is no pending or, to the knowledge of the Company or any of
the Insurance Subsidiaries, threatened action, suit, proceeding or investigation that may
reasonably be expected to lead to the revocation, termination or suspension of any such
license, certificate or permit (including, without limitation, the Insurance Licenses);
except, in each of the foregoing cases, as to Insurance Licenses, the failure of which to
obtain or maintain would not be reasonably expected to have a material adverse effect on
the general affairs, financial position, stockholders’ equity or results of operations of
the Company and its Subsidiaries considered as one enterprise; and except as disclosed in
the Prospectus, no insurance regulatory agency or body has issued any order or decree
(specifically applicable to one or more of the Insurance Subsidiaries as opposed to
insurance companies generally) impairing, restricting or prohibiting the payment of
dividends by any of the Insurance Subsidiaries to their respective parent companies;
(xxi) None of The Company or any Insurance Subsidiary is aware of any threatened or
pending downgrading in the A.M. Best Company, Inc. (“A.M. Best”) rating of any Insurance
Subsidiary;
(xxii) All reinsurance ceded treaties, contracts, agreements and arrangements to which
any the Company or any of the Insurance Subsidiaries is a party are in full force and
effect, other than those that, by their terms, have expired or otherwise terminated, and
none of the Company or any of its Subsidiaries is in violation of, or in default in the
performance, observance or fulfillment of, any material obligation agreement, covenant or
condition contained therein, which violation or default would, singly or in the aggregate,
reasonably be expected to have a material adverse effect on the general affairs, financial
position, stockholders’ equity or results of operations of the Company and its
Subsidiaries, considered as one enterprise; none of the Company or any of its Subsidiaries
has received any notice from any of the other parties to such treaties, contracts,
agreements or arrangements that such other party intends not to perform in any material
respect such treaty, contract, agreements or arrangements will be unable to perform such
treaty, contract, agreement or arrangement where the failure to perform would have a
material adverse effect on the general affairs, financial position, stockholders’ equity or
results of operations of the Company and its Subsidiaries, considered as one enterprise;
(xxiii) The statutory annual and quarterly statements of each of the Insurance
Subsidiaries, and the statutory balance sheets and income statements included in such
statutory annual and quarterly statements, most recently filed in each state have been
prepared in conformity with required or permitted statutory accounting principles or
practices consistently followed, except as may otherwise be indicated in the notes thereto,
and present fairly in all material respects the
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statutory financial position of each Insurance Subsidiary as at the dates thereof, and
on a statutory basis for the periods covered thereby;
(xxiv) The Company is not, or will not be after giving effect to the offering or sale
of any of the Designated Securities, required to register as an “investment company” within
the meaning of the Investment Company Act, or is subject to regulation as an “investment
company” under the 1940 Act;
(xxv) The Company and its subsidiaries maintain a system of internal accounting
controls, which have not been materially affected since the date of the latest audited
financial statements incorporated by reference in the Pricing Prospectus, sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles or statutory accounting practices, as the case may be, and to
maintain accountability for assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) recorded assets are compared
with existing assets at reasonable interval and appropriate action is taken with respect to
any differences;
(xxvi) The Company and each of its subsidiaries have filed all tax returns required to
have been filed, which returns are complete and correct in all material respects, and
neither the Company nor any subsidiary is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto, except for any
such taxes or assessment which are being contested in good faith by appropriate proceedings
and for which appropriate reserves, if any, have been established in accordance with
generally accepted accounting principles;
(xxvii) The Company and its subsidiaries (i) are in compliance with any and all
applicable foreign, Federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) are in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company;
(xxviii) To the knowledge of the Company, after due inquiry, no material labor dispute
with the employees of the Company or any of its subsidiaries exists, or, is imminent;
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(xxix) The Company and its subsidiaries own or possess, or have the ability to
acquire, all patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade names currently
employed by them in connection with the business now operated by them, except where the
failure to own, possess or have the ability to acquire such patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries taken as a whole, and none of
the Company nor its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which, singly or in the
aggregate, if the subject to any unfavorable decision, ruling or finding, would have a
material adverse effect on the Company and its Subsidiaries taken as a whole; and
(xxx) The Company maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the
Exchange Act, such disclosure controls and procedures have been designed to ensure that
material information relating to the Company and its subsidiaries required to be disclosed
in the reports it files or submits under the Exchange Act is made known to the Company’s
principal executive officer and principal financial officer by others within those
entities; and such disclosure controls and procedures are effective.
Section 3. Upon the execution of the Pricing Agreement applicable to any Designated Securities
and authorization by the Representatives of the release of the Firm Securities relating thereto the
several Underwriters propose to offer such Designated Securities for sale upon the terms and
conditions set forth in the Pricing Prospectus.
The Company may specify in the Pricing Agreement applicable to any Designated Securities that
the Company thereby grants to the Underwriters the right (an “Additional Securities Option”) to
purchase at their election up to the aggregate principal amount of Optional Securities set forth in
such Pricing Agreement, on the terms set forth in the paragraph above, for the sole purpose of
covering sales of debentures in excess of the aggregate principal amount of Firm Securities. Any
such election to purchase Optional Securities may be exercised by written notice from the
Representatives to the Company given within a period specified in the Pricing Agreement, setting
forth the aggregate principal amount of Optional Securities to be purchased and the date on which
such Optional Securities are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless the
Representatives and the Company otherwise agree in writing, earlier than or later than the
respective number of business days after the date of such notice set forth in such Pricing
Agreement.
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The aggregate principal amount of Optional Securities to be added to the aggregate principal
amount of Firm Securities to be purchased by each Underwriter as set forth in Schedule I to the
Pricing Agreement applicable to such Designated Securities shall be, in each case, the aggregate
principal amount of Optional Securities which the Company has been advised by the Representatives
have been attributed to such Underwriter; provided that, if the Company has not been so advised,
the aggregate principal amount of Optional Securities to be so added shall be, in each case, that
proportion of Optional Securities which the aggregate principal amount of Firm Securities to be
purchased by such Underwriter under such Pricing Agreement bears to the aggregate principal amount
of Firm Securities (rounded as the Representatives may determine to the nearest $1,000 principal
amount). The total aggregate principal amount of Designated Securities to be purchased by all the
Underwriters pursuant to such Pricing Agreement shall be the aggregate principal amount of Firm
Securities set forth in Schedule I to such Pricing Agreement plus the aggregate principal amount of
Optional Securities which the Underwriters elect to purchase.
Section 4. The Designated Securities to be purchased by each Underwriter pursuant to a Pricing
Agreement will be represented by one or more registered 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 such Underwriter’s Securities to the
Representatives for the account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by wire transfer of Federal (same-day) funds to the account
specified by the Company to the Representatives, by causing DTC to credit such Underwriter’s
Securities to the account of the Representatives at DTC. The Company will cause the certificates
representing such Underwriter’s Securities to be made available to the Representatives for checking
at least twenty-four hours prior to the applicable 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 of and payment (i) for the Firm Securities pursuant to a Pricing Agreement shall be set
forth in Schedule II to such Pricing Agreement and are herein called the “First Time of Delivery”
and (ii) for the Optional Securities, if any, shall be at the time and date specified by the
Representatives in the written notice given by the Representatives of the Underwriters’ election to
purchase such Optional Securities, or at such other time and date as the Representatives and the
Company may agree in writing, if not the First Time of Delivery, are herein called the “Second Time
of Delivery.” Each such time and date are herein called a “Time of Delivery”.
Section 5. The Company agrees with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus in relation to the applicable Designated Securities in a form
approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission’s close of business on the second business day following the
execution and delivery of the Pricing Agreement
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relating to the applicable Designated Securities or, if applicable, such earlier time as may
be required by Rule 424(b); to make no further amendment or any supplement to the Registration
Statement, the Basic Prospectus or Prospectus after the date of the Pricing Agreement relating to
such Designated Securities and prior to the last Time of Delivery for such Securities which shall
be disapproved by the Representatives for such Designated Securities promptly after reasonable
notice thereof; to advise the Representatives (for so long as an Underwriter has a prospectus
delivery obligation under the Act) promptly after the Company receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes effective or any
amendment or supplement to the Prospectus has been filed and to furnish the Representatives with
copies thereof; to prepare a final term sheet, containing solely a description of the Designated
Securities, in a form approved by the Representatives and to file such term sheet pursuant to Rule
433(d) under the Act within the time required by such Rule; to file promptly all other material
required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; 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 (or in
lieu thereof, the notice referred to in Rule 173(a) under the Act) is required in connection with
the offering or sale of the Designated Securities, and during such same period to advise the
Representatives, 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
other prospectus in respect of the Securities, of any notice of objection of the Commission to the
use of the Registration Statement or any post-effective amendment thereto pursuant to Rule
401(g)(2) under the Act, of the suspension of the qualification of the Designated 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 the 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 other prospectus or suspending any such qualification, to promptly use its reasonable
best efforts to obtain the withdrawal of such order; and in the event of any such issuance of a
notice of objection, promptly to take such steps including, without limitation, amending the
Registration Statement or filing a new registration statement, at its own expense, as may be
necessary to permit offers and sales of the Designated Securities by the Underwriters (references
herein to the Registration Statement shall include any such amendment or new registration
statement);
(b) If required by Rule 430B(h) under the Act, to prepare a form of prospectus in a form
approved by the Representatives and to file such form of prospectus pursuant to Rule 424(b) under
the Act not later than may be required by Rule 424(b) under the Act; and to make no further
amendment or supplement to such form of prospectus which shall be disapproved by the
Representatives promptly after reasonable notice thereof;
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(c) If, by the third anniversary (the “Renewal Deadline”) of the initial effective date of the
Registration Statement, (i) the Underwriter has a prospectus delivery obligation under the Act, and
(ii) any of the Designated Securities remain unsold by the Underwriters, the Company will file, if
it has not already done so and is eligible to do so, a new automatic shelf registration statement
relating to the Designated Securities, in a form satisfactory to you. If at the Renewal Deadline
the Company is no longer eligible to file an automatic shelf registration statement, the Company
will, if it has not already done so, file a new shelf registration statement relating to the
Designated Securities, in a form satisfactory to you and will use its best efforts to cause such
registration statement to be declared effective within 180 days after the Renewal Deadline. The
Company will take all other action necessary or appropriate to permit the public offering and sale
of the Designated Securities to continue as contemplated in the expired registration statement
relating to the Designated Securities. References herein to the Registration Statement shall
include such new automatic shelf registration statement or such new shelf registration statement,
as the case may be;
(d) Promptly from time to time to take such action as the Representatives may reasonably
request to qualify such Securities for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such 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;
(e) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the
date of this Agreement and from time to time so long as an Underwriter has a prospectus delivery
obligation under the Act, to furnish the Underwriters with written and electronic copies of the
Prospectus in New York City in such quantities as the Representatives may reasonably request, and,
if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
the Act) is required at any time 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 (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their
request to file such document and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many written and electronic copies as the Representatives may from time
to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance;
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(f) To make generally available to its securityholders as soon as practicable, but in any
event not later than sixteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule 158);
(g) During the period beginning from the date of the Pricing Agreement for such Designated
Securities and continuing to and including the later of (i) the termination of trading restrictions
for such Designated Securities, as notified to the Company by the Representatives and (ii) the Time
of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise
dispose of any securities of the Company that are substantially similar to the Designated
Securities which mature more than one year after such Time of Delivery without the prior written
consent of the Representatives; and
(h) To pay the required Commission filing fees relating to the Designated Securities within
the time required by Rule 456(b)(1) under the Act without regard to the proviso therein and
otherwise in accordance with Rules 456(b) and 457(r) under the Act.
Section 6. (a) The Company represents and agrees that, other than the final term sheet
prepared and filed pursuant to Section 5(a) hereof, without the prior consent of the
Representatives, it has not made and will not make any offer relating to the Designated Securities
that would constitute a “free writing prospectus” as defined in Rule 405 under the Act;
(i) each Underwriter represents and agrees that, without the prior consent of the
Company and the Representatives, other than one or more term sheets or customary
announcements relating to the Designated Securities containing customary information, it
has not made and will not make any offer relating to the Designated Securities that would
constitute a free writing prospectus; and
(ii) any such issuer free writing prospectus the use of which has been consented to by
the Company and the Representatives (including the final term sheet prepared and filed
pursuant to Section 5(a) hereof) is listed on Schedule II to the applicable Pricing
Agreement;
(b) The Company has complied and will comply with the requirements of Rule 433 under the Act
applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or
retention where required and legending; and
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus
would conflict with the information in the Registration Statement, the Pricing Prospectus or the
Prospectus or would include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the
-16-
statements therein, in the light of the circumstances then prevailing, not misleading, the
Company will give prompt notice thereof to the Representatives and, if requested by the
Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing
Prospectus or other document which will correct such conflict, statement or omission; provided,
however, that this representation and warranty shall not apply to any statements or omissions in an
Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter through the Representatives expressly for use therein.
Section 7. The Company covenants and agrees with the several Underwriters that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the
Company’s counsel and accountants in connection with the registration of the Securities under the
Act and all other expenses in connection with the preparation, printing, reproduction and filing of
the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing
Prospectus, the related final term sheet, any Issuer Free Writing Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters,
this Agreement, any Pricing Agreement, any Indenture, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(d) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey; (iv) any fees charged by securities rating services for rating
the Securities; (v) the filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, 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 9 and 12 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.
Section 8. The obligations of the Underwriters of any Designated Securities as to Designated
Securities to be delivered at each Time of Delivery under the Pricing Agreement relating to such
Designated Securities shall be subject to the condition that all representations and warranties and
other statements of the Company in or incorporated by reference in the Pricing Agreement relating
to such Designated Securities are, at and as of the Time of Delivery for such Designated
Securities, 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:
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(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the
Act 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; the final term sheet contemplated by Section
5(a) hereof, and any other material required to be filed by the Company pursuant to Rule 433(d)
under the Act, shall have been filed with the Commission within the applicable time periods
prescribed for such filings by Rule 433; 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 no notice of objection of the
Commission to the use of the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Act shall have been received; no stop order suspending or
preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been
initiated or threatened by the Commission; and all requests for additional information on the part
of the Commission shall have been complied with to the Representatives’ reasonable satisfaction;
(b) Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, shall have furnished to the
Representatives such written opinion or opinions, dated the Time of Delivery for such Designated
Securities, in form and substance satisfactory to you (in giving such opinion, such counsel may
rely as to matters of Delaware law on the opinions of counsel to the Company referred to below),
and such counsel shall have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Sidley Austin LLP, counsel for the Company, shall have furnished to the Representatives
their written opinions, dated the Time of Delivery for such Designated Securities, in form and
substance satisfactory to the Representatives and substantially to the effect set forth in Exhibit
II(a) to the applicable Pricing Agreement;
(d) Xxxx X. Xxxxxxx, Esq., General Counsel of the Company and Xxxxxxx Xxxx, Esq., General
Counsel of Safety National Casualty Corporation, as applicable, shall have furnished to the
Representatives their written opinion, dated the Time of Delivery for such Designated Securities,
in form and substance satisfactory to the Representatives and collectively substantially to the
effect set forth in Exhibit II(b) to the applicable Pricing Agreement.
(e) On the date of the Pricing Agreement for such Designated Securities at a time prior to the
execution of the Pricing Agreement with respect to such Designated Securities and at each Time of
Delivery for such Designated Securities, the independent auditors of the Company who have audited
the financial statements of the Company and its subsidiaries included or incorporated by reference
in the Registration Statement shall have furnished to the Representatives a letter, dated the date
of the applicable Pricing Agreement, and a letter or letters, dated each Time of Delivery, relating
to the applicable Designated Securities, in form and substance satisfactory to the Representatives,
to the effect set forth in substantially in the form of Exhibit I(a) to the applicable Pricing
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Agreement and a draft of the form of letter to be delivered as of the Time of Delivery shall
be attached as Exhibit I(b) to the applicable Pricing Agreement;
(f) 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 Pricing Prospectus
any loss or interference with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since the
respective dates as of which information is given in the Pricing Prospectus there shall not have
been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders’ equity or results of operations of the Company and
its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Pricing
Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the
judgment of the Representatives so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Designated Securities being delivered at
such Time of Delivery on the terms and in the manner contemplated in the Prospectus;
(g) On or after the Applicable Time (i) no downgrading shall have occurred in the rating
accorded the Company’s debt securities or preferred stock or the Company’s financial strength or
claims paying ability by any “nationally recognized statistical rating organization”, as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (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 preferred stock or the
Company’s financial strength or claims paying ability;
(h) On or after the Applicable Time 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
or on Nasdaq; (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 a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United States of a national
emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial,
political or economic conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v), in the judgment of the Representatives, makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Designated Securities on the
terms and in the manner contemplated in the Prospectus relating to the Designated Securities;
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(i) The Company shall have complied with the provisions of Section 5(e) hereof with respect to
the furnishing of prospectuses on the New York Business Day next succeeding the date of the
applicable Pricing Agreement;
(j) The Company shall have furnished or caused to be furnished to the Representatives at the
Time of Delivery for the Designated Securities a certificate or certificates of officers of the
Company satisfactory to the Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery,
as to the matters set forth in subsections (a) and (e) of this Section and as to such other matters
as the Representatives may reasonably request.
Section 9. (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 the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement
thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be
filed pursuant to Rule 433(d) under the Act, 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 the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the Representatives expressly for
use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims,
damages or liabilities (or actions in respect thereof) 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 the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or
any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the extent,
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that such untrue statement or alleged untrue statement or omission or alleged omission was
made in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus or any such amendment or supplement thereto, or any Issuer Free
Writing Prospectus, in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use therein; and will
reimburse the Company 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 and except to the extent it has been prejudiced in any material respect by such failure
to notify. 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, 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. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or not the indemnified party
is an actual or potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include any statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 9 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 in lieu of indemnifying such indemnified party 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 of the Designated
Securities on the other from the offering of the Designated Securities to which such loss, claim,
damage or liability (or
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action in respect thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (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 of the Designated Securities 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 such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by such 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 such Underwriters on the other and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company 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 applicable Designated 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
obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect to such Securities
and not joint.
(e) The obligations of the Company under this Section 9 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 each broker-dealer
affiliate of any Underwriter; and the obligations of the Underwriters under this Section 9 shall be
in addition to any liability which the respective Underwriters may otherwise have and shall extend,
upon the same
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terms and conditions, to each officer and director of the Company and to each person, if any,
who controls the Company within the meaning of the Act.
Section 10. (a) If any Underwriter shall default in its obligation to purchase any Designated
Securities which it has agreed to purchase under the Pricing Agreement relating to such Designated
Securities at a Time of Delivery, the Representatives may in their discretion arrange for
themselves or another party or other parties to purchase such Designated Securities on the terms
contained herein. If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Designated 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 the Representatives to purchase such Designated Securities on such
terms. In the event that, within the respective prescribed period, the Representatives notify the
Company that they have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to postpone such Time of
Delivery for such Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration Statement or the
Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments or supplements to the Registration Statement or the
Prospectus which in the opinion of the Representatives may thereby be made necessary. The term
“Underwriter” as used in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to the Pricing Agreement with
respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the Designated Securities
of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in
subsection (a) above, the aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one eleventh of the aggregate principal amount of the Designated
Securities to be purchased at such Time of Delivery, then the Company shall have the right to
require each nondefaulting Underwriter to purchase the principal amount of Designated Securities
which such Underwriter agreed to purchase under the Pricing Agreement relating to such Designated
Securities at such Time of Delivery and, in addition, to require each nondefaulting Underwriter to
purchase its pro rata share (based on the principal amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Designated Securities
of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in
subsection (a) above, the aggregate principal amount of Designated Securities which remains
unpurchased exceeds one eleventh of the aggregate
-23-
principal amount of the Designated Securities to be purchased at such Time of Delivery, as
referred to in subsection (b) above, or if the Company shall not exercise the right described in
subsection (b) above to require nondefaulting Underwriters to purchase Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated
Securities (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to
purchase and the Company to sell the Optional Securities) shall thereupon terminate, without
liability on the part of any nondefaulting Underwriter or the Company, except for the expenses to
be borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and
contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
Section 11. 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 any Underwriter or any controlling person of any 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.
Section 12. If any Pricing Agreement shall be terminated pursuant to Section 10 hereof, the
Company shall not then be under any liability to any Underwriter with respect to the Designated
Securities covered by such Pricing Agreement except as provided in Sections 8 and 10 hereof; but,
if for any other reason, Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements
of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale
and delivery of such Designated Securities not so delivered, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities not so delivered
except as provided in Sections 8 and 10 hereof.
Section 13. In all dealings hereunder, the Representatives of the Underwriters of Designated
Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the
Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of
the Representatives as set forth in the Pricing Agreement; 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
-24-
Counsel; provided, however, that any notice to an Underwriter pursuant to Section 9(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 the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt thereof.
Section 14. This Agreement and each Pricing Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company and, to the extent provided in Sections 9 and 11
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 or any such
Pricing Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
Section 15. Time shall be of the essence of each Pricing Agreement. As used herein, the term
“business day” shall mean any day when the Commission’s office in Washington, D.C. is open for
business.
Section 16. The Company acknowledges and agrees that (i) the purchase and sale of the
Designated Securities pursuant to any Pricing Agreement is an arm’s-length commercial transaction
between the Company, on the one hand, and the several Underwriters, on the other, (ii) in
connection therewith and with the process leading to such transaction each Underwriter is acting
solely as a principal and not the agent or fiduciary of the Company, (iii) no Underwriter has
assumed an advisory or fiduciary responsibility in favor of the Company with respect to the
offering contemplated by such Pricing Agreement or the process leading thereto (irrespective of
whether such Underwriter has advised or is currently advising the Company on other matters) or any
other obligation to the Company except the obligations expressly set forth in this Agreement and
such Pricing Agreement and (iv) the Company has consulted its own legal and financial advisors to
the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters,
or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, in connection with such transaction or the process leading thereto.
Section 17. This Agreement and any Pricing Agreement supersede all prior agreements and
understandings (whether written or oral) between the Company and the Underwriters, or any of them,
with respect to the subject matter hereof.
Section 18. This Agreement and each Pricing Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Section 19. The Company and each of the Underwriters hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury
-25-
in any legal proceeding arising out of or relating to this Agreement and any Pricing Agreement
or the transactions contemplated hereby.
Section 20. This Agreement and each Pricing Agreement may be executed by any one or more of
the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together constitute one and the same
instrument.
Section 21. Notwithstanding anything herein to the contrary, the Company is authorized to
disclose to any persons the U.S. federal and state income tax treatment and tax structure of the
potential transaction and all materials of any kind (including tax opinions and other tax analyses)
provided to the Company relating to that treatment and structure, without the Underwriters,
imposing any limitation of any kind. However, any information relating to the tax treatment and
tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent
necessary to enable any person to comply with securities laws. For this purpose, “tax structure”
is limited to any facts that may be relevant to that treatment.
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, on behalf of each of the Underwriters,
this letter and such acceptance hereof shall constitute a binding agreement between each of the
Underwriters and the Company.
[Signature page follows on next page]
-26-
| Very truly yours, Delphi Financial Group, Inc. |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Vice President, Finance | |||
Accepted on the date hereof:
Xxxxxx Brothers Inc.
By: /s/ Xxxxxx
Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
Wachovia Capital Markets, LLC
By: /s/ Xxxxxxx
Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Managing Director
Name: Xxxxxxx Xxxxxx
Title: Managing Director
Banc of America Securities LLC
By: /s/ Xxxxxx X.
Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
-27-
ANNEX I
Pricing Agreement
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Capital Markets, LLC
000 Xxxxx Xxxxxxx Xxxxxx
XX 0000
Xxxxxxxxx, XX 00000
000 Xxxxx Xxxxxxx Xxxxxx
XX 0000
Xxxxxxxxx, XX 00000
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
As Representatives of the several underwriters
named in Schedule I hereto
named in Schedule I hereto
May 16, 2007
Ladies and Gentlemen:
Delphi Financial Group, Inc., a Delaware corporation (the “Company”), proposes, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated May 16, 2007 (the
“Underwriting Agreement”), between the Company on the one hand and Xxxxxx Brothers Inc., Wachovia
Capital Markets, LLC and Banc of America Securities LLC (as “Representatives” of the Underwriters)
on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the
“Underwriters”) the Securities specified in Schedule II hereto (the “Designated Securities”
consisting of Firm Securities and any Optional Securities the Underwriters may elect to Purchase).
Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its
entirety, and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement,
except that each representation and warranty which refers to the Basic Prospectus in the
Underwriting Agreement shall be deemed to be a representation or warranty made as of the date of
the Underwriting Agreement in relation to the Basic Prospectus (as therein defined). Each
reference to the Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms
defined in the Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on
behalf of the Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 13 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 13 are set forth at the end of Schedule II hereto. For
the purposes of this Pricing Agreement the “Applicable Time” shall be 6:45 p.m. New York City Time
on the date of this Pricing Agreement.
An amendment to the Registration Statement, or a supplement to the Base Prospectus, as the
case may be, relating to the Designated Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting Agreement
incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at
the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto,
the aggregate principal amount of Firm Securities set forth opposite the name of such Underwriter
in Schedule I hereto and, (b) in the event and to the extent that the Underwriters shall exercise
the election to purchase Optional Securities, as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company at the purchase price to the Underwriters set forth in Schedule II
hereto that portion of the aggregate principal amount of Optional Securities as to which such
election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to purchase at their election
up to the aggregate principal amount of Optional Securities set forth opposite the name of such
Underwriter in Schedule I hereto on the terms referred to in the paragraph above for the sole
purpose of covering sales of Securities in excess of the aggregate principal amount of Firm
Securities. Any such election to purchase Optional Securities may be exercised by written notice
from the Representatives to the Company given within a period of 30 calendar days after the date of
this Pricing Agreement, setting forth the aggregate principal amount of Optional Securities to be
purchased and the date on which such Optional Securities are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no earlier than two or later than ten
business days after the date of such notice.
The Underwriters severally confirm that the information appearing in the list of names of each
of the Underwriters under the caption “Underwriting” in the most recent Preliminary Prospectus and
the Pricing Prospectus and the statements in the sixth and seventh paragraphs under the caption
“Underwriting” in the most recent Preliminary Prospectus and the Prospectus, constitute the only
written information furnished to the Company by the Representatives on behalf of the Underwriters.
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, on behalf of each
-2-
of the Underwriters, this letter and such acceptance hereof, including the provisions of the
Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Company.
[Signature page follows on next page]
-3-
| Very truly yours, Delphi Financial Group, Inc. |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Vice President, Finance | |||
| Accepted as of the date hereof: Xxxxxx Brothers Inc. |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx, Xxxxxxxx | |||
| Title: | Senior Vice President | |||
| Wachovia Capital Markets, LLC |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Managing Director | |||
| Banc of America Securities LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
-4-
SCHEDULE I
| Maximum | ||||||||
| Principal | Principal Amount | |||||||
| Amount of Firm | of Optional | |||||||
| Underwriter | Securities | Securities | ||||||
Xxxxxx Brothers Inc. |
$ | 52,568,125 | $ | 0 | ||||
Wachovia Capital Markets, LLC |
$ | 52,568,000 | $ | 0 | ||||
Banc of America Securities LLC |
$ | 36,938,875 | $ | 0 | ||||
HSBC Securities (USA) Inc. |
$ | 6,012,500 | $ | 0 | ||||
KeyBanc Capital Markets, a division
of XxXxxxxx Investments Inc. |
$ | 6,012,500 | $ | 0 | ||||
Xxxxx Xxxxxxx & Co. |
$ | 6,012,500 | $ | 0 | ||||
LaSalle Financial Services, Inc. |
$ | 2,977,500 | $ | 0 | ||||
Xxxxxxx Xxxxxxx Xxxxxx Securities LLC |
$ | 2,977,500 | $ | 0 | ||||
Xxxxx, Xxxxxxxx & Xxxxx, Inc. |
$ | 2,977,500 | $ | 0 | ||||
Xxxxxxxxxxx & Co. Inc. |
$ | 2,977,500 | $ | 0 | ||||
The Xxxxxxxx Capital Group, L.P. |
$ | 2,977,500 | $ | 0 | ||||
Total |
$ | 175,000,000 | $ | 0 | ||||
SCHEDULE II
Summary of Terms
SCHEDULE III
| (a) | Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package: |
None
| (b) | Additional Documents Incorporated by Reference: |
None
EXHIBIT I(a)
COMFORT LETTER
EXHIBIT I(b)
FORM OF BRING-DOWN COMFORT LETTER
EXHIBIT II(a)
FORM OF OPINION(S) OF COMPANY’S OUTSIDE COUNSEL
EXHIBIT II(b)
FORM OF OPINION OF COMPANY’S IN-HOUSE COUNSEL
Opinion of Company Counsel
ANNEX II
SIGNIFICANT SUBSIDIARIES
As used in the Underwriting Agreement, the “Significant Subsidiaries” of the Company are as
follows:
Reliance Standard Life Insurance Company
Safety National Casualty Corporation
SIG Holdings, Inc.
