SELECTIVE INSURANCE GROUP, INC. (a New Jersey corporation) Junior Subordinated Notes due 2066 UNDERWRITING AGREEMENT Dated: September 20, 2006
EXECUTION COPY
SELECTIVE INSURANCE GROUP, INC.
(a New Jersey corporation)
Junior Subordinated Notes due 2066
Dated: September 20, 2006
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SELECTIVE INSURANCE GROUP, INC.
(a New Jersey corporation)
$100,000,000
Junior Subordinated Notes due 2066
September 20, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Wachovia Capital Markets, LLC
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Selective Insurance Group, Inc., a New Jersey corporation (the “Company”), confirms its agreement
with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”) and
each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which
term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof),
for whom Xxxxxxx Xxxxx and Wachovia Capital Markets, LLC are acting as representatives (in such
capacity, the
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“Representatives”), with respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective principal amounts set forth in
said Schedule A of $100,000,000 aggregate principal amount of the Company’s Junior Subordinated
Notes due 2066 (the “Securities”). The Securities are to be issued pursuant to an indenture dated
as of September 25, 2006 (the “Base Indenture”) between the Company and U.S. Bank National
Association, as trustee (the “Trustee”), as supplemented by the first supplemental indenture, dated
September 25, 2006, between the Company and the Trustee (the “Supplemental Indenture,” and together
with the Base Indenture, the “Indenture”).
The Company understands that the Underwriters propose to make a public offering of the Securities
as soon as the Representatives deem advisable after this Agreement has been executed and delivered
and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the “1939
Act”).
The Company has filed with the Securities and Exchange Commission (the “Commission”) an automatic
shelf registration statement on Form S-3 (No. 333-137395), including the related preliminary
prospectus or prospectuses, which registration statement became effective upon filing under Rule
462(e) of the rules and regulations of the Commission (the “1933 Act Regulations”) under the
Securities Act of 1933, as amended (the “1933 Act”). Such registration statement covers the
registration of the Securities under the 1933 Act. Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule
430B (“Rule 430B”) of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule 424(b)”) of the
1933 Act Regulations. Any information included in such prospectus that was omitted from such
registration statement at the time it became effective but that is deemed to be part of and
included in such registration statement pursuant to Rule 430B is referred to as “Rule 430B
Information.” Each prospectus used in connection with the offering of the Securities that omitted
Rule 430B Information is herein called a “preliminary prospectus.” Such registration statement, at
any given time, including the amendments thereto to such time, the exhibits and any schedules
thereto at such time, the documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof or
included therein by 1933 Act Regulations, is herein called the “Registration Statement.” The
Registration Statement at the time it originally became effective is herein called the “Original
Registration Statement.” The final prospectus in the form first furnished to the Underwriters for
use in connection with the offering of the Securities, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the execution
of this Agreement and any preliminary prospectuses that form a part thereof, is herein called the
“Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system (“XXXXX”).
All references in this Agreement to financial statements and schedules and other information which
is “contained,” “included” or “stated” in the Registration Statement, any preliminary prospectus or
the Prospectus (or other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated by reference in or
otherwise deemed by 1933 Act Regulations to be a part of or included in the Registration Statement,
any preliminary prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the “1934 Act”) which is incorporated by reference in or otherwise deemed by
1933 Act Regulations to be a part of or included in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
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SECTION 1. Representations and Warranties .
(a) Representations and Warranties by the Company. The Company represents and warrants to
each Underwriter as of the date hereof, the Applicable Time referred to in Section 1(a)(i) hereof
and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Status as a Well-Known Seasoned Issuer. (A) At the time of filing the
Original Registration Statement, (B) at the time of the most recent amendment thereto for
the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of
the 1934 Act or form of prospectus), (C) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933 Act
Regulations) made any offer relating to the Securities in reliance on the exemption of Rule
163 of the 1933 Act Regulations and (D) at the date hereof, the Company was and is a
“well-known seasoned issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule
405”), including not having been and not being an “ineligible issuer” as defined in Rule
405. The Registration Statement is an “automatic shelf registration statement,” as defined
in Rule 405, and the Securities, since their registration on the Registration Statement,
have been and remain eligible for registration by the Company on a Rule 405 “automatic shelf
registration statement.” The Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic
shelf registration statement form.
At the time of filing the Original Registration Statement, at the earliest time
thereafter that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405.
(ii) Registration Statement, Prospectus and Disclosure at Time of Sale. The
Original Registration Statement became effective upon filing under Rule 462(e) of the 1933
Act Regulations (“Rule 462(e)”) on September 18, 2006, and any post-effective amendment
thereto also became effective upon filing under Rule 462(e). No stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of the Commission
for additional information has been complied with.
Any offer that is a written communication relating to the Securities made prior to the
filing of the Original Registration Statement by the Company or any person acting on its
behalf (within the meaning, for this paragraph only, of Rule 163(c) of the 1933 Act
Regulations) has been filed with the Commission in accordance with the exemption provided by
Rule 163 of the 1933 Act Regulations (“Rule 163”) and otherwise complied with the
requirements of Rule 163, including without limitation the legending
requirement, to qualify such offer for the exemption from Section 5(c) of the 1933 Act
provided by Rule 163.
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At the respective times the Original Registration Statement and each amendment thereto
became effective, at each deemed effective date with respect to the Underwriters pursuant to
Rule 430B(f)(2) of the 1933 Act Regulations and at the Closing Time, the Registration
Statement complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the “1939 Act Regulations”), and did not 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.
Neither the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing Time, included
or will include an untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Each preliminary prospectus (including the prospectus or prospectuses filed as part of
the Original Registration Statement or any amendment thereto) complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
As of the Applicable Time, neither (x) the Issuer General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the Applicable Time (as defined
below) and the Statutory Prospectus (as defined below), all considered together
(collectively, the “General Disclosure Package”), nor (y) any individual Issuer Limited Use
Free Writing Prospectus, when considered together with the General Disclosure Package,
included any untrue statement of a material fact or omitted 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.
As of the time of the filing of the Final Term Sheet, the General Disclosure Package,
when considered together with the Final Term Sheet (as defined in Section 3(b)), will 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.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 10:30 a.m. (Eastern time) on September 20, 2006 or such other
time as agreed by the Company and the Representatives.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities
that (i) is required to be filed with the Commission by the Company, (ii) is a “road
show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or
not
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required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule
433(d)(5)(i) because it contains a description of the Securities or of the offering that
does not reflect the final terms, in each case in the form filed or required to be filed
with the Commission or, if not required to be filed, in the form retained in the Company’s
records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule C hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
“Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time, including any
document incorporated by reference therein and any preliminary or other prospectus deemed to
be a part thereof.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that the issuer notified or notifies Xxxxxxx Xxxxx as described in Section 3(e), did
not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.
The representations and warranties in this subsection shall not apply to (i) statements
in or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx Xxxxx expressly for use therein or (ii) that part
of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under
the 1939 Act of the Trustee.
(iii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the “1934 Act Regulations”), and, when read together with the other
information in the Prospectus, (a) at the time the Original Registration Statement became
effective, (b) at the earlier of time the Prospectus was first used and the date and time of
the first contract of sale of Securities in this offering and (c) at the Closing Time, did
not 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.
(iv) Independent Accountants. The accounting firm who certified the financial
statements and supporting schedules included in the Registration Statement is an
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independent
registered public accounting firm with respect to the Company and its subsidiaries as
required by the 1933 Act and the 1933 Act Regulations.
(v) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus, together with the
related schedules and notes, present fairly in all material respects the financial position
of the Company and its consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders’ equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of America
(“GAAP”) applied on a consistent basis throughout the periods involved. The supporting
schedules, if any, present fairly in all material respects the information required to be
stated therein. The selected financial data and the summary financial information included
in the Prospectus present fairly in all material respects the information shown therein and
have been compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement.
(vi) Statutory Financial Statements. The statutory financial statements dated
as of December 31, 2005 and for each quarter subsequent thereto of each of the Company’s
insurance company subsidiaries have, for each relevant period, been prepared in accordance
with statutory accounting principles (“SAP”) prescribed or permitted by the National
Association of Insurance Commissioners and, with respect to each insurance company
subsidiary, the appropriate insurance department of the state of domicile of such insurance
company subsidiary, and such accounting practices have been applied on a consistent basis
throughout the periods presented.
(vii) No Republishing of Regulatory or Financial Reports. None of the Company
or any of its subsidiaries has been requested by a Governmental Entity (as defined below) to
republish, restate or refile, in any material respect, any regulatory or financial report in
the last three years.
(viii) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the Registration Statement, the General Disclosure Package
or the Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change, and no development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings or business affairs of the Company and
its subsidiaries considered as one enterprise, whether or not arising in the ordinary course
of business (a “Material Adverse Effect”), (B) there have been no transactions entered into
by the Company or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) except for regular quarterly dividends on the common stock, par
value $2.00 per share, of the Company (the “Common Stock”) in amounts per share that are
consistent with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
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(ix) Good Standing of the Company. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State of New Jersey
and has corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and perform its
obligations under this Agreement, the Indenture and the Securities; and the Company is duly
qualified as a foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not reasonably be expected to result in a Material
Adverse Effect.
(x) Good Standing of Subsidiaries. Each “significant subsidiary” of the
Company (as such term is defined in Rule 1-02 of Regulation S-X) (each such “significant
subsidiary,” a “Designated Subsidiary” and, collectively, the “Designated Subsidiaries”) has
been duly organized and is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the failure to be
so qualified or to be in good standing would not reasonably be expected to result in a
Material Adverse Effect; except as otherwise disclosed in the General Disclosure Package and
the Prospectus, all of the issued and outstanding capital stock of each such Designated
Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and
is owned by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Designated Subsidiary was issued in violation of any
preemptive or similar rights of any securityholder of such Designated Subsidiary. For the
avoidance of doubt, the Designated Subsidiaries are: (1) Selective Insurance Company of
America and (2) Selective Way Insurance Company.
(xi) Capitalization. The authorized, issued and outstanding capital stock of
the Company is as set forth in the General Disclosure Package and the Prospectus in the
column entitled “Actual” under the caption “Capitalization” (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements,
employee benefit plans referred to in the General Disclosure Package and the Prospectus or
pursuant to the exercise of convertible securities or options referred to in the General
Disclosure Package and the Prospectus). The shares of issued and outstanding capital stock
of the Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of the Company;
and the authorized capitalization of the Company and its subsidiary insurance companies
complies in all material respects with all applicable regulatory requirements with respect
thereto.
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(xii) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(xiii) Authorization of the Indenture. The Indenture has been duly authorized
by the Company and duly qualified under the 1939 Act and, when duly executed and delivered
by the Company and the Trustee, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors’ rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(xiv) Authorization of the Securities. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at law), and
will be in the form contemplated by, and entitled to the benefits of, the Indenture.
(xv) Description of the Securities and the Indenture. The Securities and the
Indenture will conform in all material respects to the respective statements relating
thereto contained in the General Disclosure Package and the Prospectus and will be in
substantially the respective forms filed or incorporated by reference, as the case may be,
as exhibits to the Registration Statement.
(xvi) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the Company or any of
its subsidiaries is subject (collectively, “Agreements and Instruments”), except for such
defaults that would not reasonably be expected to result in a Material Adverse Effect; and
the execution, delivery and performance of this Agreement, the Indenture and the Securities
and any other agreement or instrument entered into or issued or to be entered into or issued
by the Company in connection with the transactions contemplated hereby or thereby or in the
Registration Statement and the consummation of the transactions contemplated herein and in
the Registration Statement (including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities as described in the Prospectus under the
caption “Use of Proceeds”)
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and compliance by the Company with its obligations hereunder and under the Indenture
and the Securities have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that, singly or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect), nor will such action result in any violation of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their assets, properties or operations
(a “Government Entity”) except for such violations that would not reasonably be expected to
result in a Material Adverse Effect, nor will any such action result in any violation of the
provisions of the charter or by-laws of the Company or any Designated Subsidiary. As used
herein, a “Repayment Event” means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(xvii) Accounting Controls and Disclosure Controls. The Company and each of
its subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (1) transactions are executed in accordance with management’s
general or specific authorization; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain accountability
for assets; (3) access to assets is permitted only in accordance with management’s general
or specific authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. Except as described in the Prospectus, since the end of the Company’s most
recent audited fiscal year, there has been (I) no material weakness in the Company’s
internal control over financial reporting (whether or not remediated) and (II) no change in
the Company’s internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial
reporting.
The Company and its consolidated subsidiaries employ disclosure controls and procedures that
are designed to ensure that information required to be disclosed by the Company in the reports that
it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms, and is accumulated and communicated to
the Company’s management, including its principal executive officer or officers and principal
financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.
(xviii) Insurance Laws. Each of the Company’s subsidiaries that is an
insurance company is in compliance with the requirements of the insurance laws and
regulations of its jurisdiction of incorporation and the insurance laws and regulations of
the jurisdictions
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which are applicable to each such subsidiary, and has filed all notices, reports,
documents or other information required to be filed thereunder, except where the failure to
so comply or file would not reasonably be expected to result in a Material Adverse Effect.
(xix) Reinsurance. (a) All reinsurance treaties and arrangements to which any
Designated Subsidiary is a party and as to which any of them reported recoverables, premiums
due or other amounts in its most recent statutory financial statements are in full force and
effect, except where the failure of such treaties and arrangements to be in full force and
effect would not reasonably be expected to have a Material Adverse Effect; and (b)(i) no
Designated Subsidiary has received any notice from any of the other parties to such
treaties, contracts or agreements that such other party intends not to perform such treaty
and (ii) the Company has no knowledge that any of the other parties to such treaties or
arrangements will be unable to perform such treaty or arrangement, except, in each of the
above cases, (1) to the extent adequately and properly reserved for in the consolidated
financial statements of the Company included in the General Disclosure Package and the
Prospectus or (2) for such non-performance, violations or defaults that would not reasonably
be expected to result in a Material Adverse Effect.
(xx) No Material Changes in Insurance Reserving Practices. Except as disclosed
in the General Disclosure Package and the Prospectus, the Company and its subsidiaries have
made no material changes in their insurance reserving practices since the most recent
audited financial statements included or incorporated in the Prospectus.
(xxi) Ratings. The various financial strength ratings assigned to the
Company’s subsidiaries as of the date hereof have not been lowered or threatened to be
lowered by A.M. Best Company, Inc. (“A.M. Best”), Standard & Poor’s Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. (“S&P”), Xxxxx’x Investors Service, Inc.
(“Moody’s”) or Fitch, Inc. (“Fitch”), as applicable, nor, to the Company’s knowledge, have
such ratings been placed under surveillance or review by A.M. Best, S&P, Moody’s or Fitch,
as applicable, with negative implications.
(xxii) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent,
and, without independent investigation, the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any of its subsidiaries’ principal
suppliers, manufacturers, customers or contractors, which, in either case, would reasonably
be expected to result in a Material Adverse Effect.
(xxiii) Absence of Proceedings. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or body, domestic or
foreign, including any agency charged with the supervision or regulation of insurance
companies or holding companies of insurance companies, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its subsidiaries which
is required to be disclosed in the Registration Statement (other than as disclosed therein)
or that would reasonably be expected to result in a Material Adverse Effect, or that would
reasonably be expected to materially and adversely affect the
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properties or assets thereof or the performance by the Company of its obligations
hereunder.
(xxiv) Absence of Manipulation. Neither the Company nor any of its affiliates,
as such term is defined in Rule 501(b) under the 1933 Act (each, and “Affiliate”), has
taken, nor will the Company or any Affiliate take, directly or indirectly, any action which
is designed to or which has constituted or which would be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(xxv) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the General Disclosure Package, the
Prospectus or the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(xxvi) Possession of Intellectual Property. The Company and its subsidiaries
own or possess, or can acquire on reasonable terms, adequate 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, trade names or other intellectual property (collectively,
“Intellectual Property”) necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect.
(xxvii) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions contemplated by this Agreement
or for the due execution, delivery or performance of the Indenture by the Company, except
such as have been already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws or insurance securities laws of any jurisdiction in
connection with the offer, purchase and distribution of the Securities in the manner
contemplated herein or in the Registration Statement.
(xxviii) Possession of Licenses and Permits. The Company and its subsidiaries
possess such licenses, certificates or permits (including, without limitation, insurance
licenses from the insurance departments of the various states and jurisdictions where the
Company or its subsidiaries write insurance or otherwise conduct insurance or reinsurance
business, as the case may be, or as may be required by any applicable insurance statutes of
such states or other jurisdictions (collectively, the “Insurance Licenses”)), approvals,
consents and other authorizations (collectively, including the
12
Insurance Licenses, the “Governmental Licenses”) issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, except where the failure so to possess would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect; the Company and
its subsidiaries are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to result in a Material Adverse Effect.
(xxix) Title to Property. The Company and its subsidiaries have good and
marketable title to all real property owned by the Company and its subsidiaries and good
title to all other properties owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any kind except
such as (a) are described in the General Disclosure Package and the Prospectus or (b) do
not, singly or in the aggregate, materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise, and under which
the Company or any of its subsidiaries holds properties described in the Prospectus, are in
full force and effect, and neither the Company nor any of its subsidiaries has any notice of
any material claim of any sort that has been asserted by anyone adverse to the rights of the
Company or any of its subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any subsidiary thereof to the
continued possession of the leased or subleased premises under any such lease or sublease
that would reasonably be expected to result in a Material Adverse Effect.
(xxx) Environmental Laws. Except as described in the General Disclosure
Package and the Prospectus and except for such matters as would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum
products, asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
13
handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company
and its subsidiaries have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their requirements, (C) there
are no pending or threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or any of its subsidiaries
and (D) there are no events or circumstances that would reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxxi) Investment Company Act. The Company is not required, and upon the
issuance and sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be required, to register as an
“investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).
(xxxii) Compliance with the Xxxxxxxx-Xxxxx Act. There is and has been no
failure on the part of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection therewith
(the “Xxxxxxxx-Xxxxx Act”), including Section 402 related to loans and Sections 302 and 906
related to certifications.
(xxxiii) Pending Proceedings and Examinations. The Registration Statement is
not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the
1933 Act, and the Company is not the subject of a pending proceeding under Section 8A of the
1933 Act in connection with the offering of the Securities.
(xxxiv) Stock Option Awards. All stock option awards granted by the Company
have been appropriately authorized by the board of directors of the Company or a duly
authorized committee thereof, including approval of the exercise or purchase price or the
methodology for determining the exercise or purchase price and the substantive terms of the
stock options awards; all stock options granted to employees in the United States reflect
the fair market value of the Company’s capital stock as determined under Section 409A of the
Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder, or any successor statute, rules and regulations thereto, on the date the option
was granted (within the meaning of United States Treasury Regulation §1.421-1(c)); no stock
options awards granted by the Company have been retroactively granted, or the exercise or
purchase price of any stock option award determined retroactively; there is no action, suit,
proceeding, formal inquiry or formal investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company in connection with any stock option
awards granted by the Company; there is no action, suit, proceeding, formal inquiry or
formal investigation before or brought by any court or governmental agency or body, domestic
or foreign, now pending, or, to the
14
knowledge of the Company, threatened, against or affecting the Company in connection
with any stock option awards granted by the Company.
(b) Officer’s Certificates. Any certificate signed by any officer of the Company or
any of its subsidiaries delivered to the Representatives or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing .
(a) Securities. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional
principal amount of Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of certificates for, the
Securities shall be made at the offices of Shearman & Sterling LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or at such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. (Eastern time) on the third business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and the Company (such
time and date of payment and delivery being herein called “Closing Time”).
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Securities which it has
agreed to purchase. Xxxxxxx Xxxxx, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the Securities to be
purchased by any Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Securities shall be in such
denominations ($25 or integral multiples thereof) and registered in such names as the
Representatives may request in writing at least one full business day before the Closing Time. The
Securities will be made available for examination by the Representatives in The City of New York
not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time.
SECTION 3. Covenants of the Company . The Company covenants with each Underwriter as
follows:
(a) Compliance with Securities Regulations and Commission Requests; Payment of Filing Fees.
The Company, subject to Section 3(b), will comply with the requirements of Rule
15
430B and will
notify the Representatives immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement or new registration statement relating to
the Securities shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or the filing of a
new registration statement or any amendment or supplement to the Prospectus or any document
incorporated by reference therein or otherwise deemed to be a part thereof or for additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or such new registration statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding
under Section 8A of the 1933 Act in connection with the offering of the Securities. The Company
will effect the filings required under Rule 424(b), in the manner and within the time period
required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment. The Company shall pay the required Commission filing fees relating to
the Securities within the time required by Rule 456(b)(1)(i) of the 1933 Act Regulations without
regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933
Act Regulations (including, if applicable, by updating the “Calculation of Registration Fee” table
in accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration
Statement or on the cover page of a prospectus filed pursuant to Rule 424(b)).
(b) Filing of Amendments and Exchange Act Documents; Preparation of Final Term Sheet. The
Company will give the Representatives notice of its intention to file or prepare any amendment to
the Registration Statement or new registration statement relating to the Securities or any
amendment, supplement or revision to either any preliminary prospectus (including any prospectus
included in the Original Registration Statement or amendment thereto at the time it became
effective) or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, and
the Company will furnish the Representatives with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not file or use any such
document to which the Representatives or counsel for the Underwriters shall object. The Company has
given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act
Regulations within 48 hours prior to the Applicable Time; the Company will give the Representatives
notice of its intention to make any such filing from the Applicable Time to the Closing Time and
will furnish the Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object. The Company will prepare a final
term sheet (the “Final Term Sheet”) reflecting the final terms of the Securities, in form and
substance satisfactory to the Representatives, and shall file such Final
Term Sheet as an “issuer free writing prospectus” pursuant to Rule 433 prior to the close of
business two business days after the date hereof; provided that the Company shall furnish the
16
Representatives with copies of any such Final Term Sheet a reasonable amount of time prior to such
proposed filing and will not use or file any such document to which the Representatives or counsel
to the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will deliver to the
Representatives and counsel for the Underwriters, without charge, signed copies of the Original
Registration Statement and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be incorporated by
reference therein or otherwise deemed to be a part thereof) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives, without charge, a conformed
copy of the Original Registration Statement and of each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Original Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge,
as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939
Act Regulations so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend the Registration
Statement or to file a new registration statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such amendment, supplement or new
registration statement as may be necessary to correct such statement or omission or to comply with
such requirements, the Company will use its best efforts to have such amendment or new registration
statement declared effective as soon as practicable (if it is not an automatic shelf registration
statement with respect to the Securities) and the Company will furnish to the Underwriters such
number of copies of such amendment,
supplement or new registration statement as the Underwriters may reasonably request. If at
any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
17
or development as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement (or any other registration
statement relating to the Securities) or the Statutory Prospectus or any preliminary prospectus or
included or would include an untrue statement of a material fact or omitted or would omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify
Xxxxxxx Xxxxx and will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representatives may designate and to maintain such
qualifications in effect as long as required for the sale of the Securities; provided, however,
that the Company shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. The Company will also supply the Underwriters with such
information as is necessary for the determination of the legality of the Securities for investment
under the laws of such jurisdictions as the Underwriters may reasonably request.
(g) Rating of Securities. The Company shall take all reasonable action necessary to enable
A.M. Best, S&P, Xxxxx’x and Fitch to provide their respective credit ratings of the Securities.
(h) DTC. The Company will cooperate with the Representatives and use its best efforts to
permit the offered Securities to be eligible for clearance and settlement through the facilities of
The Depository Trust Company (“DTC”).
(i) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(j) Use of Proceeds. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under “Use of Proceeds.”
(k) Listing. The Company will use its best efforts to effect the listing of the Securities on
the New York Stock Exchange.
(l) Restriction on Sale of Securities. During a period of 30 days from the date of the
Prospectus, the Company will not, without the prior written consent of the Representatives,
directly or indirectly, issue, sell, offer or contract to sell, grant any option for the sale
of, or otherwise transfer or dispose of, any debt securities of the Company.
(m) Reporting Requirements. The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be filed with the
18
Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(n) Issuer Free Writing Prospectuses. The Company represents and agrees that, unless it
obtains the prior consent of the Representatives, and each Underwriter represents and agrees that,
unless it obtains the prior consent of the Company and the Representatives, it has not made and
will not make any offer relating to the Securities that would constitute an “issuer free writing
prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission; provided, however,
that prior to the preparation of the Final Term Sheet in accordance with Section 3(b), the
Underwriters are authorized to use the information with respect to the final terms of the
Securities in communications conveying information relating to the offering to investors. Any such
free writing prospectus consented to by the Company and the Representatives is hereinafter referred
to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission
where required, legending and record keeping.
SECTION 4. Payment of Expenses .
(a) Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and any schedules or exhibits and any
document incorporated therein by reference) as originally filed and of each amendment or supplement
thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters, the Indenture and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the Underwriters, (iv)
the fees and disbursements of the Company’s counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey
and any supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Permitted Free Writing Prospectus and of the Prospectus and any
amendments or supplements thereto and any costs associated with electronic delivery of any of the
foregoing by the Underwriters to investors, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (ix) the costs and
expenses of the Company relating to investor presentations on any “road show” undertaken in
connection with the marketing of the Securities, including without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations, travel and lodging expenses of the representatives
and officers of the Company and any such consultants, and the cost of aircraft and other
transportation chartered in connection with the road show, (x) any fees payable
19
in connection with
the rating of the Securities, and (xi) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse
the Underwriters for all of their reasonable out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters’ Obligations . The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company contained in Section 1 hereof or in certificates of any officer of the Company or any of
its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of
its covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement; Filing of Prospectus; Payment of Filing Fee. The
Registration Statement has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the reasonable satisfaction
of counsel to the Underwriters. A prospectus containing the Rule 430B Information shall have been
filed with the Commission in the manner and within the time period required by Rule 424(b) without
reliance on Rule 424(b)(8) (or a post-effective amendment providing such information shall have
been filed and become effective in accordance with the requirements of Rule 430B). The Company
shall have paid the required Commission filing fees relating to the Securities within the time
period required by Rule 456(b)(1)(i) of the 1933 Act Regulations without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations and,
if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with
Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the
cover page of a prospectus filed pursuant to Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Representatives shall have received
the favorable opinion, dated as of Closing Time, of (i) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel for the Company, substantially to the effect set forth in Exhibit A-1 hereto and (ii) Xxxxx
X. Xxxxxx, Corporate Counsel of the Company, substantially to the effect set forth in Exhibit A-2
hereto, each in form and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters and to such further
effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Shearman & Sterling LLP, counsel for
the Underwriters, together with signed or reproduced copies of such letter for each of the other
Underwriters in form and substance satisfactory to the Representatives.
(d) Officers’ Certificate. At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the Prospectus or the General
Disclosure Package, any material adverse change, or any development involving a
20
prospective
material adverse change, in the condition, financial or otherwise, or in the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representatives shall have received a certificate of the
President or a senior executive, executive or senior vice president of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change and no such development involving a prospective
material adverse change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or, to their knowledge, contemplated by the Commission.
(e) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Representatives shall have received from KPMG LLP a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives shall have received from
KPMG LLP a letter, dated as of Closing Time, to the effect that they reaffirm the statements made
in the letter furnished pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing Time.
(g) Maintenance of Rating. At Closing Time, the Securities shall be rated at least bbb by
A.M. Best, Baa3 by Xxxxx’x, BBB- by S&P and BBB by Fitch and the Company shall have delivered to
the Representatives a letter dated the Closing Time, from each such rating agency, or other
evidence satisfactory to the Representatives, confirming that the Securities have such ratings; and
since the date of this Agreement, there shall not have occurred a downgrading in the rating
assigned to the Securities or any of the Company’s other securities or the Company’s financial
strength or claims paying ability by any “nationally recognized statistical rating agency,” as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such
organization shall have publicly announced that it has under surveillance or review its rating of
the Securities or any of the Company’s other securities or the Company’s financial strength or
claims paying ability.
(h) Additional Documents. At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel for the Underwriters.
21
(i) Termination of Agreement. If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by written notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in
full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and hold harmless
each Underwriter, its Affiliates, its selling agents and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
1. against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), including the Rule 430B
Information, or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
2. against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
3. against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement
shall not apply to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with written information
furnished to the Company by any Underwriter through Xxxxxxx Xxxxx
expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430B Information or any preliminary
prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter severally
agrees to indemnify and hold harmless the Company, its directors, each of its officers who
22
signed
the Registration Statement, and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement (or any amendment thereto), including the Rule
430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx Xxxxx expressly for use
therein.
(c) Actions Against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by
Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses
of more than one counsel (in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in accordance with such request
prior to the date of such settlement.
23
SECTION 7. Contribution . If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Underwriters on
the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus bear to the aggregate initial public offering price of the Securities as set forth
on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether any such untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters 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 Section 7 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 Section 7. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any 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 0000
Xxx) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s Affiliates and
selling agents shall have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act
24
shall have the same rights to contribution as the Company. The Underwriters’ respective
obligations to contribute pursuant to this Section 7 are several in proportion to the principal
amount of Securities set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive . All representations,
warranties and agreements contained in this Agreement or in certificates of officers of the Company
or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or
any person controlling the Company, and (ii) delivery of and payment for the Securities.
SECTION 9. Termination of Agreement .
(a) Termination; General. The Representatives may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given in the Prospectus
(exclusive of any supplement thereto) or the General Disclosure Package, any material adverse
change, or any development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the effect of which is such
as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the Commission or the Nasdaq
Global Market, or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq Global Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or by such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, (iv) a material disruption has
occurred in commercial banking or securities settlement or clearance services in the United States,
or (v) if a banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters . If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated
to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set forth; if,
25
however,
the Representatives shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the aggregate
principal amount of the Securities to be purchased hereunder, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount
of the Securities to be purchased hereunder, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement, either
the Representatives or the Company shall have the right to postpone Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter”
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure . Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the transactions contemplated hereby,
the Company (and each employee, representative or other agent of the Company) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind (including opinions or
other tax analyses) that are provided to the Company relating to such tax treatment and tax
structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed
federal income tax treatment of the transactions contemplated hereby, and the term “tax structure”
includes any fact that may be relevant to understanding the purported or claimed federal income tax
treatment of the transactions contemplated hereby.
SECTION 12. Notices . All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to the Representatives at c/o
Merrill Xxxxx & Co., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Financial
Institutions Investment Banking, Xxxxxxx Xxxx; and notices to the Company shall be directed to it
at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx, 00000, attention of Xxxxxxx X. Xxxxx, Esq., with a
copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New York, New York, 10036,
attention of Xxxxxxx Xxxxxxx, Esq.
SECTION 13. No Advisory or Fiduciary Relationship . The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the
determination of the public offering price of the Securities and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the offering contemplated
hereby and the process leading to such transaction each Underwriter is and has been acting solely
26
as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (c) no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter has any obligation to the
Company with respect to the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the Company, and (e) the
Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory
and tax advisors to the extent it deemed appropriate.
SECTION 14. Integration . This Agreement supersedes 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 15. Parties . This Agreement shall each inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company
and their respective successors, and said controlling persons and officers and directors and their
heirs and
legal representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 16. GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. TIME . TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Counterparts . This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
SECTION 19. Effect of Headings . The Section headings herein are for convenience
only and shall not affect the construction hereof.
27
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours, | ||||||
SELECTIVE INSURANCE GROUP, INC. | ||||||
By: | ||||||
Name: | ||||||
Title: |
CONFIRMED AND ACCEPTED, | ||||
as of the date first above written: | ||||
XXXXXXX XXXXX & CO. | ||||
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX | ||||
INCORPORATED | ||||
WACHOVIA CAPITAL MARKETS, LLC | ||||
By:
|
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX | |||
INCORPORATED | ||||
By: |
||||
Authorized Signatory | ||||
By: WACHOVIA CAPITAL MARKETS, LLC | ||||
By: |
||||
For themselves and as Representatives of the other Underwriters named in Schedule A hereto.
28
SCHEDULE A
Principal | ||||
Amount of | ||||
Name of Underwriter | Securities | |||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated |
38,875,000 | |||
Wachovia Capital Markets, LLC |
38,875,000 | |||
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, Inc. |
2,500,000 | |||
X.X. Xxxxxx Securities Inc. |
2,500,000 | |||
Xxxxx Xxxxxxxx & Xxxxx, Inc. |
2,500,000 | |||
Xxxxx Xxxxxxx & Co. |
2,500,000 | |||
Xxxxxxx Xxxxx & Associates |
2,500,000 | |||
Xxxxxx X. Xxxxx & Co. Incorporated |
750,000 | |||
Xxxxxxxxx & Company LLC |
750,000 | |||
X.X. Xxxxxxx & Sons, Inc. |
750,000 | |||
Xxxxxx, Xxxxx Xxxxx, Incorporated |
750,000 | |||
H&R Block Financial Advisors, Inc. |
750,000 | |||
KeyBanc Capital Markets, a division of McDonald Investments Inc. |
750,000 | |||
Xxxxxxxxxxx & Co. Inc. |
750,000 | |||
RBC Xxxx Xxxxxxxx Inc. |
750,000 | |||
Xxxx Xxxx & Co., Inc. |
750,000 | |||
Xxxxxxx Xxxxxx & Co., Inc. |
750,000 | |||
Xxxxxx, Xxxxxxxx & Company, Incorporated |
750,000 | |||
SunTrust Capital Markets, Inc. |
750,000 | |||
TD Ameritrade, Inc. |
750,000 | |||
Total |
$ | 100,000,000 | ||
Sch A-1
SCHEDULE B
SELECTIVE INSURANCE GROUP, INC.
$100,000,000 Junior Subordinated Notes due 2066
1. The initial public offering price of the Securities shall be 100.00% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the Securities shall be 96.85% of the
principal amount thereof.
3. The interest rate on the Securities shall be 7.5% per annum.
Sch B-1
SCHEDULE C
Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Number 333-137395
Filed Pursuant to Rule 433
Registration Number 333-137395
Final Term Sheet
Issuer: |
Selective Insurance Group, Inc. | |
Principal Amount: |
$100,000,000 | |
Security Type: |
Junior Subordinated Notes due 2066 | |
Legal Format: |
SEC Registered | |
Ratings: |
Baa3(Positive)/BBB-(Stable)/bbb(Stable)/BBB(Stable) Xxxxx’x /S&P /A.M. Best /Fitch | |
Maturity: |
September 27, 2066 | |
Coupon: |
7.5% per annum | |
Trade Date: |
September 20, 2006 | |
Optional Redemption: |
At any time on or after September 26, 2011, at 100% of the principal amount, plus accrued and unpaid interest | |
Optional Deferral: |
Maximum of 10 consecutive years per deferral | |
Settlement Date: |
September 25, 2006 | |
Listing: |
Intend to apply to list on the NYSE; if approved, trading expected to begin within 30 days of issuance | |
Price to Public: |
100% | |
Interest Payment Dates: |
Interest is cumulative and payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning December 15, 2006, and on September 27, 2066 | |
Tax Event Call: |
At any time prior to September 25, 2011, at 100% of the principal amount, plus accrued and unpaid interest | |
Joint
Book-Running Managers: |
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Wachovia Capital Markets, LLC | |
Co-Managers: |
BB&T Capital Markets, a division of Xxxxx & Xxxxxxxxxxxx, Inc., X.X. Xxxxxx Securities Inc., Xxxxx Xxxxxxxx & Xxxxx, Inc., Xxxxx Xxxxxxx & Co. and Xxxxxxx Xxxxx & Associates | |
CUSIP: |
816300 30 5 |
The issuer has filed a registration statement, including a prospectus, with the
SEC for the offering to which this communication relates. Before you invest,
you should read the prospectus in the registration statement and other
documents the issuer has filed with the SEC for more complete information about
the issuer and this offering. You may obtain these documents for free by
visiting XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer,
any underwriter or any dealer participating in the offering will arrange to
send you the prospectus if you request it by calling Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated toll-free at 0-000-000-0000 or Wachovia Capital
Markets, LLC toll-free at 0-000-000-0000.
Sch C-1
EXHIBIT A-1
FORM OF OPINION OF
SKADDEN, ARPS, SLATE, XXXXXXX AND XXXX LLP,
AS COMPANY COUNSEL,
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
SKADDEN, ARPS, SLATE, XXXXXXX AND XXXX LLP,
AS COMPANY COUNSEL,
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
1. The Indenture is a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms.
2. No Governmental Approval, which has not been obtained or taken and is not in full force and
effect, is required to authorize, or is required for, the execution or delivery of each of the
Transaction Documents by the Company or the consummation by the Company of the transactions
contemplated thereby.
3. When duly authenticated by the Trustee and issued and delivered by the Company against
payment therefor in accordance with the terms of the Underwriting Agreement and the Indenture, the
Securities will constitute valid and binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in accordance with their terms.
4. The statements in the Prospectus under the captions “Specific Terms Of The Junior
Subordinated Notes” and “Description Of Debt Securities,” insofar as such statements purport to
summarize certain provisions of the Indenture, the Supplemental Indenture and the Notes referred to
therein, fairly summarize such provisions in all material respects.
5. The execution and delivery by the Company of each of the Transaction Documents and the
consummation by the Company of the transactions contemplated thereby, including the issuance and
sale of Securities, will not violate or conflict with, or result in any contravention of, any
Applicable Law.
6. The Company is not and, solely after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Prospectus, will not be
an “investment company” as such term is defined in the Investment Company Act of 1940.
A-1-1
In addition, we have participated in conferences with officers and other representatives of
the Company, representatives of the independent accountants of the Company, you and Shearman&
Sterling LLP, as your counsel, at which the contents of the Registration Statement and the
Prospectus, the General Disclosure Package (as defined below) and related matters were discussed.
We did not participate in the preparation of the Incorporated Documents but have, however, reviewed
such documents and discussed the business and affairs of the Company with officers and other
representatives of the Company. We do not pass upon, or assume any responsibility for, the
accuracy, completeness or fairness of the statements contained or incorporated by reference in the
Registration Statement, the Prospectus or the General Disclosure Package and have made no
independent check or verification thereof (except to the limited extent referred to in paragraph 4
of our opinion to you dated the date hereof and our opinion to you dated the date hereof regarding
the section of the Prospectus titled “Certain United States Federal Income Tax Considerations”).
On the basis of the foregoing, (i) the Registration Statement, at the time it became
effective and the Prospectus, as of the date of the Prospectus Supplement, appeared on their face
to be appropriately responsive in all material respects to the requirements of the Securities Act
and the Rules and Regulations (except that in each case we do not express any view as to the
financial statements, schedules and other financial information included or incorporated by
reference therein or excluded therefrom or the Statement of Eligibility on Form T-1 (the “Form
T-1”)) and (ii) no facts have come to our attention that have caused us to believe that the
Registration Statement, at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as of the date of the
Prospectus Supplement and as of the date hereof contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading
(except that in each case we do not express any view as to the financial statements, schedules and
other financial information included or incorporated by reference therein or excluded therefrom or
the statements contained in the exhibits to the Registration Statement, including the Form T-1).
In addition, on the basis of the foregoing, no facts have come to our attention that have caused us
to believe that the General Disclosure Package, as of the Applicable Time (as defined below),
contained an untrue statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading (except that we do not express any view as to the financial statements, schedules
and other financial information included or incorporated by reference therein or excluded therefrom
or the statements contained in the exhibits to the Registration Statement, including the Form T-1).
As used herein, “Applicable Time” means ___:00 p.m. (Eastern time) on September ___, 2006, and
“General Disclosure Package” means the Preliminary Prospectus and the Final Term Sheet, all
considered together.
In addition, based on the foregoing, we confirm to you that (i) the Preliminary Prospectus and
the Prospectus have been filed with the Commission within the time period required by Rule 424 of
the Rules and Regulations and (ii) the Final Term Sheet has been filed with the Commission within
the time period required by Rule 433(d) of the Rules and Regulations.
A-1-2
1. although the matter is not free from doubt, the Securities will be classified as
indebtedness of the Company;
2. although the discussion set forth in the Prospectus under the heading “CERTAIN UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS” does not purport to discuss all possible United States
federal income tax consequences of the purchase, ownership, and disposition of the Securities, such
discussion constitutes, in all material respects, a fair and accurate summary of the United States
federal income tax consequences of the purchase, ownership, and disposition of the Securities under
current United States federal income tax law, subject to the qualifications set forth therein.
X-0-0
XXXXXXX X-0
FORM OF OPINION OF XXXXX X. XXXXXX,
CORPORATE COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
CORPORATE COUNSEL OF THE COMPANY,
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(a) The Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of New Jersey, with corporate power and authority to own,
lease and operate its properties and conduct its business as described in the Prospectus and to
execute, deliver and perform its obligations under the Underwriting Agreement, the Securities and
the Indenture;
(b) The Company is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the failure to be so
qualified or to be in good standing would not reasonably be expected to result in a Material
Adverse Effect;
(c) The authorized, issued and outstanding capital stock of the Company is as set forth in the
General Disclosure Package and the Prospectus in the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans or the exercise of convertible securities or options referred to in the
General Disclosure Package and the Prospectus or pursuant to the exercise of convertible securities
or options referred to in the General Disclosure Package and the Prospectus); the shares of issued
and outstanding capital stock of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any securityholder of the
Company;
(d) Each Designated Subsidiary has been duly incorporated and is an existing corporation in
good standing under the laws of its jurisdiction of incorporation, with corporate power and
authority to own, lease and operate its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where such failures to be so qualified or be
in good standing would not have reasonably be expected to result in a Material Adverse Effect;
(e) All of the issued capital stock of each Designated Subsidiary is owned by the Company,
directly or indirectly, in each case free and clear of any lien, encumbrance or security interest;
(f) Each of the Underwriting Agreement, the Indenture and the Securities has been duly
authorized, executed and delivered by the Company;
(g) The statements in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2005 under the caption “Business—Insurance Regulation,” to the extent
Sch A-1
that such statements constitute summaries of legal matters, and when taken together with any update
by the Incorporated Documents, fairly summarize such provisions or constitute fair summaries in all
material respects;
(h) To the best of my knowledge, there are no pending or threatened actions, suits,
proceedings, inquiries or investigations before or brought by any court or governmental agency or
body against the Company or any of its subsidiaries, or to which the property of the Company or any
of its subsidiaries is subject, that would reasonably be expected to result in a Material Adverse
Effect, or would reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations under the Underwriting Agreement or the consummation of the
transactions contemplated by the Underwriting Agreement and the Prospectus;
(i) The execution, delivery and performance by the Company of the Underwriting Agreement, the
Indenture, and the Securities, and the consummation by the Company of the transactions contemplated
thereby, including the issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption “Use Of Proceeds”, (x) will
not result in any violation of the certificate of incorporation or by-laws of the Company or any of
its subsidiaries, (y) will not, whether with or without the giving of notice or lapse of time or
both, conflict with, or constitute a breach of, or default or Repayment Event under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries under, any contract, indenture, mortgage, lease or other
agreement to which the Company is a party or to which the Company or any of its properties or
assets is bound, that has been filed as an exhibit to the Incorporated Documents and (z) will not
violate any existing applicable New Jersey law, rule or regulation, or any judgment, order or
decree of any New Jersey State government, governmental or regulatory instrumentality or agency or
court having jurisdiction over the Company or any of its properties or assets, known to me, except
in the case of clauses (y) and (z), where such conflicts, breaches, defaults, Repayment Events,
liens, charges, encumbrances or violations would not reasonably be expected to result in a Material
Adverse Effect;
(j) Each of the Incorporated Documents, when it was filed with the Commission, complied as to
form in all material respects with the requirements of the Exchange Act and the applicable rules
and regulations of the Commission thereunder, except that no opinion is expressed herein as to the
financial statements and related notes, schedules and other financial information included or
incorporated by reference therein or excluded therefrom; and
(k) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency, of the State of New
Jersey having jurisdiction over the Company under those laws, rules and regulations of the State of
New Jersey that, in my experience, are normally applicable to transactions of the type contemplated
by the Underwriting Agreement (other than such as may be required under the applicable securities
laws of the State of New Jersey, as to which I express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the Underwriting Agreement or the
due execution, delivery or performance of the Indenture by the Company or for the offering,
issuance, sale or delivery of the Securities to the Underwriters or the resale by the Underwriters
in accordance with the terms of the Underwriting Agreement.
Sch A-2
In addition, no facts have come to my attention that have caused me to believe that the
Registration Statement, at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as of the date of the
Prospectus Supplement and as of the date hereof contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading
(except that in each case I do not express any view as to the financial statements, schedules and
other financial information included or incorporated by reference therein or excluded therefrom or
the statements contained in the exhibits to the Registration Statement, including the Statement of
Eligibility on Form T-1 (the “Form T-1”)). In addition, on the basis of the foregoing, no facts
have come to my attention that have caused me to believe that the General Disclosure Package, as of
the Applicable Time (as defined below), contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that I do not express any view as
to the financial statements, schedules and other financial information included or incorporated by
reference therein or excluded therefrom or the statements contained in the exhibits to the
Registration Statement, including the Form T-1).
As used herein, “Applicable Time” means ___:00 p.m. (Eastern time) on September ___, 2006,
and “General Disclosure Package” means the Preliminary Prospectus and the Final Term Sheet, all
considered together.
Sch A-3