$15,000,000 AGGREGATE PRINCIPAL AMOUNT PMA Capital Corporation 6.50% SENIOR SECURED CONVERTIBLE DEBENTURES DUE 2022 Purchase Agreement

Ladies and Gentlemen:

PMA Capital Corporation, a company duly organized and existing under the laws of the Commonwealth of Pennsylvania (the “ Company ”), proposes to issue and sell to Banc of America Securities LLC (the “ Initial Purchaser ”) $15,000,000 aggregate principal amount of its 6.50% Senior Secured Convertible Debentures due September 30, 2022 (the “ Securities ”).

The Securities will be convertible into fully paid, non-assessable shares of Class A Common Stock, par value $5.00 per share, of the Company (the “ Common Stock ”) to the extent provided in the Rights Agreement, dated as of May 3, 2000 (the “ Rights Agreement ”), between the Company and The Bank of New York as rights agent. The Securities will be convertible initially at a conversion rate of 61.0948 shares per $1,000 principal amount of the Securities, on the terms, and subject to the conditions, set forth in the Indenture (as defined below). As used herein, “ Conversion Shares ” means the shares of Common Stock into which the Securities are convertible. The Securities will be issued pursuant to an indenture, to be dated as of the Closing Date (as defined in Section 2) (the “Indenture ”), among the Company and U.S. Bank National Association, a national banking association, as (the “ Trustee ”).

The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission (the “ Commission ”) thereunder (the “ Securities Act ”), in reliance upon an exemption therefrom.

Holders of the Securities (including the Initial Purchaser and its direct and indirect transferees) will be entitled to the benefits of a Registration Rights Agreement, to be dated as of the Closing Date (the “ Registration Rights Agreement ”), among the Company and the Initial Purchaser, pursuant to which the Company will agree to file with the Commission a shelf registration statement pursuant to Rule 415 under the Securities Act (the “ Registration Statement ”) covering the resale of the Securities and the Conversion Shares, and to use commercially reasonable efforts to cause the Registration Statement to be declared effective.

The Company understands that the Initial Purchaser proposes to make an offering of the Securities on the terms and in the manner set forth herein and in the Offering Memorandum (as defined below) and agrees that the Initial Purchaser may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers at any time after the date of this Agreement. The Securities are to be offered and sold to or through the Initial Purchaser without being registered with the Commission under the Securities Act in reliance upon exemptions therefrom. The terms of the Securities and the Indenture will require that

investors that acquire Securities expressly agree that Securities (and any Conversion Shares) may only be resold or otherwise transferred, after the date hereof, if such Securities (or Conversion Shares) are registered for sale under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemption afforded by Rule 144A (“ Rule 144A ”) thereunder).

The Company has prepared an offering memorandum dated the date hereof setting forth information concerning the Company, the Securities, the Registration Rights Agreement and the Common Stock in form and substance reasonably satisfactory to the Initial Purchaser. As used in this Agreement, “ Offering Memorandum ” means, collectively, the Preliminary Offering Memorandum dated November 10, 2004 (the “ Preliminary Offering Memorandum ”) and the offering memorandum dated the date hereof (the “ Final Offering Memorandum ”), each as amended or supplemented by the Company. As used herein, each of the terms “ Offering Memorandum ”, “ Preliminary Offering Memorandum ” and “ Final Offering Memorandum ” shall include in each case the documents incorporated or deemed to be incorporated by reference therein.

The Company hereby confirms its agreements with the Initial Purchaser as follows:

Section 1. Representations and Warranties of the Company

The Company hereby represents, warrants and covenants to the Initial Purchaser as follows:

(a)  Each of the Preliminary Offering Memorandum and the Final Offering Memorandum, as of its respective date, did not, and on the Closing Date, the Final Offering Memorandum will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or warranty as to information contained in or omitted from the Preliminary Offering Memorandum or the Final Offering Memorandum in reliance upon and in conformity with written information furnished to the Company by the Initial Purchaser specifically for use therein as set forth on Schedule B hereto.

(b) Each of the Preliminary Offering Memorandum and the Final Offering Memorandum, as of its respective date, contains all of the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.

(c) Assuming the accuracy of the representations and warranties of the Initial Purchaser contained in Section 2 and its compliance with the agreements set forth therein, the issuance and sale of the Securities to the Initial Purchaser, the offer, resale and delivery of the Securities by the Initial Purchaser and the conversion of the Securities into Conversion Shares, in each case in the manner contemplated by this Agreement, the Indenture and the Offering Memorandum, do not require registration under the Securities Act and the Indenture does not need to be qualified under the Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”).

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(d) Except as otherwise disclosed in the Offering Memorandum, subsequent to the date as of which information is given therein: (A) there has been no Material Adverse Change (as defined below); (B) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; (C) there has been no dividend or distribution of any kind declared, paid or made by the Company or any of its subsidiaries on any class of capital stock or partnership or membership interest (as applicable) or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock or partnership interest (as applicable); and (D) there has been no material change in the capital stock, partnership interests, short-term debt or long-term debt of the Company and its subsidiaries, considered as one entity, except in each case described in, or as described in any document incorporated by reference in, the Offering Documents.

(e) The Company has been duly organized and is validly existing under the laws of the Commonwealth of Pennsylvania. The Company has power (corporate and other) and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum, and to enter into and perform all its obligations under this Agreement, the Indenture, the Registration Rights Agreement and the Securities (collectively, the “ Transaction Documents ”). 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 for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a material adverse change or any development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, taken as a whole (any such change a “ Material Adverse Change ”).

(f) Each subsidiary of the Company has been duly incorporated or formed and is validly existing as a corporation, limited liability company or limited partnership (as applicable) in good standing under the laws of the jurisdiction of its incorporation or formation and has power (corporate, partnership or other) and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and to enter into and perform all of its obligations under the Transaction Documents. Each subsidiary of the Company is duly qualified as a foreign entity 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 for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock, or all of the partnership interests (whether general or limited partnership or limited liability company interests), as applicable, of each of the subsidiaries of the Company has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim, except as created pursuant to the Indenture. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Schedule A hereto.

(g)  This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company enforceable against the Company in accordance with its

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terms, except as rights to indemnification and contribution hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

(h)  The Registration Rights Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as rights to indemnification and contribution thereunder may be limited by applicable law and except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

(i)  The Indenture has been duly authorized by the Company and, assuming due authorization, execution and delivery thereof by the Trustee, when duly executed and delivered by the Company, 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, reorganization, moratorium, or similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general principles of equity.

(j)  The Securities have been duly authorized by the Company and, when executed, authenticated, issued and delivered in accordance with the terms of the Indenture will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles, and will be entitled to the benefits of the Indenture.

(k)  The Conversion Shares issuable upon conversion of the Securities have been duly authorized and reserved and, when issued upon conversion of the Securities in accordance with the terms of the Securities, will be validly issued, fully paid and non-assessable, and the issuance of such Conversion Shares will not be subject to any preemptive or similar rights.

(l)  Each of the Transaction Documents conforms or will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum.

(m)  Neither the Company nor any of its respective subsidiaries is in violation of its charter or by-laws, limited partnership or operating agreement or similar organizational documents, as applicable, or is in default (or, with the giving of notice or lapse of time, would be in default) (“ Default ”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them is or may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (each such foregoing documents being referred to as an “ Existing Instrument ”), except for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change. The execution by the Company, and its delivery and performance of the Transaction Documents: (i) will not result in any violation of the provisions of the charter or by-laws or other governing documents of the Company or any of its subsidiaries; (ii) will not constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or, except pursuant to the Indenture, 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, or require the consent of any other party to, any Existing Instrument, except for such breaches, Defaults, liens, charges or encumbrances as would not, individually or

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in the aggregate, result in a Material Adverse Change; and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any of its subsidiaries. As used herein, a “ Debt Repayment Triggering Event ” means any event or condition which gives, or with the giving of notice or lapse of time would give, 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.

(n)  Any document incorporated by reference in the Offering Memorandum, or any information filed with the Commission, or from which information is so incorporated by reference when filed or becoming effective, as the case may be, complied, continues to comply and will comply in all material respects with the requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), as applicable, and the rules and regulations promulgated thereunder.

(o)  Deloitte & Touche LLP and PricewaterhouseCoopers LLP are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants (“ AICPA ”) and its interpretations and rulings thereunder. The historical financial statements (including the related notes) incorporated by reference in the Offering Memorandum comply in all material respects with the requirements applicable to a registration statement on Form S-3 under the Securities Act; such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and fairly present the financial position of the entities purported to be covered thereby at the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated; and the financial information contained in the Offering Memorandum under the heading “Selected Consolidated Financial Information” fully present the information purported to be shown thereby. The other historical financial and statistical information and data included in the Offering Memorandum are, in all material respects, fairly presented. The Company’s ratios of earnings to fixed charges contained in the Offering Memorandum under the heading “Ratio of Earnings to Fixed Charges” have been calculated in compliance with Item 503(d) of Regulation S-K under the Securities Act.

(p)  The Company had an authorized and outstanding capitalization as set forth in, or as described in any document incorporated by reference in, the Offering Memorandum. All of the shares of issued and outstanding capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any common stock or interests of the Company’s subsidiaries and equity interests in any firm, partnership, joint venture or other entities, other than those accurately described in, or described in documents incorporated by reference in, the Offering Memorandum. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, in the Offering Memorandum accurately and fairly presents and summarizes such plans, arrangements, options and rights.

(q)  No action has been taken and no statute, rule, regulation or order has been enacted, adopted or issued by any governmental agency or body which prevents the issuance of the Securities or suspends the sale of the Securities in any jurisdiction; no injunction, restraining order or order of any nature by any federal or state court of competent jurisdiction has been

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issued with respect to the Company or any of its subsidiaries which would prevent or suspend the issuance or sale of the Securities or the use of the Preliminary Offering Memorandum or the Final Offering Memorandum in any jurisdiction; no action, suit or proceeding is pending against or, to the best knowledge of the Company, threatened against or affecting the Company before any court or arbitrator or any governmental agency, body or official, domestic or foreign, which could restrain or prohibit the issuance of the Securities; and the Company has complied with any and all requests by any securities authority in any jurisdiction for additional information to be included in the Preliminary Offering Memorandum and the Final Offering Memorandum.

(r)  Except as disclosed in the Offering Memorandum, no consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of the Transaction Documents, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act.

(s)  The Company is subject to and is reporting in accordance with the requirements of Section 13 or Section 15(d) of the Exchange Act. The Company has filed and, prior to the Closing Date, will file, all documents (including exhibits) required to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act (the “ Company Filed Documents ”) within the time periods required to be filed by the Exchange Act and the rules and regulations promulgated thereunder. The information provided by the Company pursuant to these provisions and incorporated by reference in the Offering Memorandum and subsequently superseded by another document incorporated by reference did not, at the date thereof, and will not, as the case may be, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(t)  Except as described in the Offering Memorandum, there are no legal or governmental actions, suits or proceedings pending against the Company or its subsidiaries or, to the best of the Company’s knowledge, threatened against or affecting the Company or any of its subsidiaries, which have as the subject thereof any property owned or leased by, the Company or any of its subsidiaries, where in any such case there is a reasonable possibility that such action, suit or proceeding might be determined adversely to the Company or such subsidiary, and any such action, suit or proceeding, if so determined adversely, would reasonably be expected to result in a Material Adverse Change or adversely affect the consummation of the transactions contemplated by this Agreement and by the Transaction Documents. No material labor dispute with the employees of the Company or any of its subsidiaries exists or, to the best of the Company’s knowledge, is threatened or imminent.

(u)  The Company and its subsidiaries own, possess or can acquire sufficient trademarks, trade names, patent rights, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, “ Intellectual Property Rights ”) reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not result in a Material Adverse Change. Neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Change.

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(v)  The Company and each of its subsidiaries possesses such valid and current certificates, authorizations, permits or licenses issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses, except such certificates, authorizations, permits or licenses, which the failure to obtain, singularly or in the aggregate, would not result in a Material Adverse Change; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization, permit or license which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Change.

(w)  The Company and each of its subsidiaries has good and marketable title to all the properties and assets reflected as owned in the financial statements described in the Offering Memorandum, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except as described in, or as described in any document incorporated by reference in, the Offering Memorandum or such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company or such subsidiary. The real property, improvements, equipment and personal property held under lease by the Company or any of its subsidiaries are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.

(x)  (i) The Indenture and the documents, instruments and agreements required to be executed and delivered by the Company in connection therewith, will create in favor of the Trustee for the equal and ratable benefit of the holders of the Securities, the Company’s other 6.50% Senior Secured Convertible Debentures due September 30, 2022 to be issued under the Indenture and the Company’s $57,500,000 principal amount of 8.50% Monthly Income Senior Notes due 2018, a valid, enforceable first priority Lien on 20% of the Capital Stock of PMA Capital Insurance Company, Pennsylvania Manufacturers’ Association Insurance Company, Pennsylvania Manufacturers Indemnity Company and Manufacturers Alliance Insurance Company required to be pledged to the Trustee pursuant to the terms of the Indenture, and except for the actions to be taken pursuant to the Indenture, no other or additional filings, registrations, recordings or actions are or shall be necessary or appropriate in order to perfect or maintain the perfection and priority of such Lien and security interest.

(ii) No authorization, consent or approval, or declaration or filing with any governmental authority is required for the grant by the Company of the Lien and security interest in a portion of the Capital Stock of PMA Capital Insurance Company, Pennsylvania Manufacturers’ Association Insurance Company, Pennsylvania Manufacturers Indemnity Company and Manufacturers Alliance Insurance Company in favor of the Trustee pursuant to the terms of the Indenture.

(iii) There are no contractual, statutory or regulatory restrictions, prohibitions or limitations on the Company’s ability to grant to the Trustee, a Lien upon a portion of the Capital Stock of PMA Capital Insurance Company, Pennsylvania Manufacturers’ Association Insurance Company, Pennsylvania Manufacturers Indemnity Company and Manufacturers Alliance Insurance Company pursuant to the Indenture.

(iv) All certificates or instruments representing or evidencing any Capital Stock of PMA Capital Insurance Company, Pennsylvania Manufacturers’ Association Insurance Company, Pennsylvania Manufacturers Indemnity Company and Manufacturers Alliance Insurance Company or other Collateral to be delivered to the Trustee pursuant to the Indenture shall be in form suitable for transfer by delivery.

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(v) No other Liens, security agreements, financing statements or other public notice with respect to all or any part of the Capital Stock of PMA Capital Insurance Company, Pennsylvania Manufacturers’ Association Insurance Company, Pennsylvania Manufacturers Indemnity Company and Manufacturers Alliance Insurance Company is on file or of record in any government or public office and the Company has not filed or consented to filing of any such statement or notice.

(y)  The Company and its subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them except as may be being contested in good faith and by appropriate proceedings. The Company and its subsidiaries have made adequate charges, accruals and reserves in the applicable financial statements described in the Offering Memorandum in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its subsidiaries has not been finally determined.

(z)  Except as would not, individually or in the aggregate, result in a Material Adverse Change and except as described in the Offering Memorandum, neither the Company nor any of its Subsidiaries is in violation of any law, administrative regulation or administrative or court decree applicable to the Company or any of its subsidiaries.

(aa)   The Company has been advised of the rules and requirements under the Investment Company Act of 1940, as amended (the “ Investment Company Act ”). The Company is not, and will not be, an “investment company” within the meaning of the Investment Company Act and will conduct its business in a manner so that it will not become subject to the Investment Company Act.

(bb) Each of the Company and its subsidiaries is insured by recognized, financially sound institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their businesses including, but not limited to, policies covering real and personal property owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts of vandalism, floods and earthquakes. The Company has no reason to believe that: (i) it or any of its subsidiaries will not be able to renew its existing insurance coverage as and when such policies expire; or (ii) it or any of its subsidiaries will not be able to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change. Neither of the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has applied.

(cc) The Company and its subsidiaries maintain a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

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(dd) Except as would not, individually or in the aggregate, result in a Material Adverse Change: neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “ Environmental Laws ”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws. The Company is not aware of any pending investigation which might lead to such a claim.

(ee) Neither the Company nor any of its subsidiaries, nor, to the best of their knowledge, any employee or agent of any of them or any subsidiary has violated or is in violation of the Foreign Corrupt Practices Act.

(ff) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared, and (ii) are effective in all material respects to perform the functions for which they were established. Based on the evaluation of the Company’s disclosure controls and procedures described above, the Company is not aware of (a) any significant deficiency in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or any material weaknesses in internal controls or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls. Since the most recent evaluation of the Company’s disclosure controls and procedures described above, there have been no significant changes in internal controls or other factors that could significantly affect internal controls.

(gg) None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchaser, as to which no representation is made) has engaged, in connection with the offering of the Securities or the Conversion Shares, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act.

(hh) Except as described in the Offering Memorandum or as may be imposed by applicable law, no subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company, except as described in the Offering Memorandum.

(ii) Neither the consummation of the transactions contemplated herein nor the sale, issuance, execution or delivery of the Securities will violate Regulation T, U or X of the Federal Reserve Board.

(jj) Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or the Initial Purchaser for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.

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(kk) Neither the Company nor any of its affiliates has, directly or through any agent (other than the Initial Purchaser, as to which no representation is made), sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as such term is defined in the Securities Act), which is or will be integrated with the sale of the Securities or the Conversion Shares in a manner that would require registration of the Securities or the Conversion Shares under the Securities Act. 

(ll) There are no securities of the Company of the same class (as defined in Rule 144A(d) under the Securities Act) as the Securities registered under the Exchange Act or listed on a national securities exchange or quoted in a U.S. automated interdealer quotation system.

(mm)  No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Preliminary Offering Memorandum or the Final Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(nn) The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 that are effective as of the date of this Agreement.

Any certificate signed by an officer of the Company and delivered to the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed to be a representation and warranty by the Company to the Initial Purchaser as to the matters set forth therein.

Section 2. Purchase, Sale and Delivery of the Securities

(a) The Securities . The Company agrees to issue and sell to the Initial Purchaser the Securities upon the terms herein set forth. On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Initial Purchaser agrees to purchase from the Company the entire principal amount of Securities at a purchase price of 101.50% of the aggregate principal amount thereof.

(b) The Closing Date. Delivery of the Securities to be purchased by the Initial Purchaser and payment therefor shall be made at the offices of Katten Muchin Zavis Rosenman, 575 Madison Avenue, New York, New York, 10022 (or such other place as may be agreed to by the Company and the Initial Purchaser) at 9:00 a.m. New York time, on November 15, 2004 or such other time and date not later than 9:00 a.m. New York time, on November 29, 2004 as the Initial Purchaser shall designate by notice to the Company (the time and date of such closing are called the “ Closing Date ”).

(c) Payment for the Securities. Payment for the Securities shall be made on the Closing Date by wire transfer of immediately available funds to the order of the Company.

(d) Delivery of the Securities. The Company shall deliver, or cause to be delivered, to the Initial Purchaser the Securities on the Closing Date, against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The Securities shall be registered in such names and denominations as the Initial Purchaser shall have requested at least two full business days prior to the Closing Date and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City as the

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Initial Purchaser may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchaser .

Section 3. Additional Covenants of the Company

The Company