SYMETRA FINANCIAL
CORPORATION
Capital Efficient Notes due
2067
J.P. Morgan Securities
Inc
Lehman Brothers
Inc.
As Representatives of the severa
Initial Purchasers named in Schedule I attached
hereto,
c/o J.P. Morgan
Securities Inc.
270 Park Avenue
New York, New York 10017
Symetra Financial
Corporation, a Delaware corporation (the “ Company
”), proposes, upon the terms and considerations set forth in
this agreement (this “ Agreement ”), to issue
and sell to the several initial purchasers listed on
Schedule I hereto (the “ Initial
Purchasers ”), for who you are acting as representatives
(the “ Representatives ”) $150,000,000 aggregate
principal amount of its Capital Efficient Notes due 2067 (the
“ Notes ”). The Notes will (i) have terms
and provisions that are summarized in the Offering Memorandum (as
defined below) and (ii) are to be issued pursuant to an
Indenture (the “ Indenture ”) to be entered into
between the Company and U.S. Bank National Association, as trustee
(the “ Trustee ”). This is to confirm the
agreement concerning the purchase of the Notes from the Company by
the Initial Purchasers.
1.
Purchase and Resale of the Notes . The Notes will be offered
and sold to the Initial Purchasers without registration under the
Securities Act of 1933, as amended (the “ Securities
Act ”), in reliance on an exemption therefrom. The
Company has prepared a preliminary offering memorandum, dated
October 5, 2007 (the “ Preliminary Offering
Memorandum ”), a pricing term sheet substantially in the
form attached hereto as Schedule III (the “
Pricing Term Sheet ”) setting forth the terms of the
Notes omitted from the Preliminary Offering Memorandum and an
offering memorandum, dated October 10, 2007 (the “
Offering Memorandum ”), setting forth information
regarding the Company and the Notes. The Preliminary Offering
Memorandum, as supplemented and amended as of the Applicable Time
(as defined below), together with the Pricing Term Sheet and the
documents listed on Schedule II hereto are collectively
referred to as the “ Pricing Disclosure Package
.” The Company hereby confirms that it has authorized the use
of the Pricing Disclosure Package and the Offering Memorandum in
connection with the offering and resale of the Notes by the Initial
Purchasers. “Applicable Time” means 4:30 p.m. (New York
City time) on the date of this Agreement.
It is understood
and acknowledged that upon original issuance thereof, and until
such time as the same is no longer required under the applicable
requirements of the Securities Act, the Notes (and all securities
issued in exchange therefor, in substitution thereof) shall bear
the legend set forth under the caption “Transfer
Restrictions” in the Preliminary Offering Memorandum and the
Offering Memorandum.
You have advised
the Company that you will make offers (the “ Exempt
Resales ”) of the Notes purchased by you hereunder on the
terms set forth in each of the Pricing Disclosure Package and the
Offering Memorandum, as amended or supplemented, solely to
(i) persons whom you reasonably believe to be “qualified
institutional buyers” as defined in Rule 144A under the
Securities Act (“ QIBs ”) and (ii) outside
the United States to certain persons in offshore transactions in
reliance on Regulation S under the Securities Act. Those
persons specified in clauses (i) and (ii) are referred to
herein as the (“ Eligible Purchasers ”). You
will offer the Notes to Eligible Purchasers initially at a price
equal to 99.864% of the principal amount thereof. Such price may be
changed at any time after the initial offering of the Notes without
notice.
2.
Representations, Warranties and Agreements of the Company .
The Company represents, warrants and agrees as follows:
(a) When
the Notes are issued and delivered pursuant to this Agreement, such
Notes will not be of the same class (within the meaning of
Rule 144A under the Securities Act) as securities of the
Company that are listed on a United States national securities
exchange registered under Section 6 of the Securities Exchange
Act of 1934, as amended (the “ Exchange Act ”),
or that are quoted in a United States automated inter-dealer
quotation system.
(b) Neither
the Company nor any subsidiary is, and after giving effect to the
offer and sale of the Notes and the application of the proceeds
therefrom as described in each of the Pricing Disclosure Package
and the Offering Memorandum will be, an “investment
company” or a company “controlled” by an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Securities and Exchange Commission (the “
Commission ”) thereunder.
(c) Assuming
that your representations and warranties in Section 3(b) are true,
the purchase and resale of the Notes pursuant hereto (including
pursuant to the Exempt Resales) is exempt from the registration
requirements of the Securities Act and there is no need to qualify
an indenture under the Trust Indenture Act of 1939, as amended (the
“ Trust Indenture Act ”).
(d) None
of the Company or any of its affiliates or any other person acting
on its or their behalf (other than you, your affiliates, or any
person acting on your or their behalf, as to which no
representation is made) has (i) solicited offers for, or
offered or sold, the Notes by means of any form of general
solicitation or general advertising within the meaning of Rule
502(c) of Regulation D (including, but not limited to,
advertisements, articles, notices or other communications published
in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising) or
in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engaged in any
directed selling efforts
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within the
meaning of Rule 902 under the Securities Act, and the Company,
any affiliate of the Company and any person acting on its or their
behalf (other than you, your affiliates, or any person acting on
your or their behalf, as to whom the Company makes no
representation) has complied with and will implement the
“offering restrictions” required by
Rule 902.
(e) Each
of the Pricing Disclosure Package and the Offering Memorandum, as
of its date, contains all the information specified in, and meeting
the requirements of Rule 144A(d)(4) under the Securities
Act.
(f) The
Pricing Disclosure Package and the Offering Memorandum have been
prepared by the Company for use by the Initial Purchasers in
connection with the Exempt Resales. No order or decree preventing
the use of the Pricing Disclosure Package or the Offering
Memorandum, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration
requirements of the Securities Act has been issued and no
proceeding for that purpose has commenced or is pending or, to the
knowledge of the Company is contemplated.
(g) The
Pricing Disclosure Package did not, as of the Applicable Time, and
will not, as of the Closing Date, contain an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances
under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in
or omitted from the Pricing Disclosure Package in reliance upon and
in conformity with written information furnished to the Company
through the Representatives by or on behalf of any Initial
Purchaser specifically for inclusion therein, which information is
specified in Section 8(e).
(h) The
Offering Memorandum will not, as of its date and as of the Closing
Date, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were
made, not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Offering Memorandum in reliance upon and in conformity with written
information furnished to the Company through the Representatives by
or on behalf of any Initial Purchaser specifically for inclusion
therein, which information is specified in
Section 8(e).
(i) The
Company (including its agents and representatives, other than the
Initial Purchasers in their capacity as such) has not made, used,
prepared, authorized, approved or referred to and will not prepare,
make, use, authorize, approve or refer to any written communication
that constitutes an offer to sell or solicitation of an offer to
buy the Notes except for (i) the Preliminary Offering
Memorandum and the Offering Memorandum, (ii) the documents
listed on Schedule II hereto; (iii) the Pricing
Term Sheet and (iv) any other written communications used in
accordance with Section 5(e).
(j) The
statistical data, market-related, industry-related and
customer-related data and estimates included under the captions
“Summary,” “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
and “Business” in each of the Preliminary Offering
Memorandum and the Offering Memorandum and the consolidated
financial statements of the Company and its subsidiaries included
in the Pricing Disclosure
3
Package and the
Offering Memorandum are based on or derived from sources that the
Company believes to be reliable and accurate in all material
respects.
(k) The
Company and each of its subsidiaries (i) has been duly
organized and is validly existing and in good standing (with
respect to those jurisdictions that recognize such concept) as a
corporation or other business entity under the laws of its
jurisdiction of organization and (ii) is duly qualified to do
business and in good standing as a foreign corporation or other
business entity in each jurisdiction in which its ownership or
lease of property or the conduct of its businesses requires such
qualification, except where the failure to so qualify would not,
individually or in the aggregate, have a Material Adverse Effect;
and have all corporate power and authority necessary to own or hold
its properties and to conduct the businesses in which they are
engaged; and none of the subsidiaries of the Company (other than
Symetra Life Insurance Company) is a “significant
subsidiary” (as defined in Rule 405 under the Securities
Act) (a “ Significant Subsidiary ”).
(l) The
Company has an authorized capitalization as set forth in each of
the Pricing Disclosure Package and the Offering Memorandum, and all
of the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, provided that with respect to
Health Network Strategies, LLC, the Company owns 60% of the capital
stock.
(m) The
Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Indenture. The
Indenture has been duly and validly authorized by the Company, and
upon its execution and delivery and, assuming due authorization,
execution and delivery by the Trustee, will constitute the valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors’ rights generally and by general equitable
principles. The Indenture will conform to the description thereof
in each of the Pricing Disclosure Package and the Offering
Memorandum.
(n) The
Company has all requisite corporate power and authority to execute,
issue, sell and perform its obligations under the Notes. The Notes
have been duly authorized by the Company and, when duly executed by
the Company in accordance with the terms of the Indenture, assuming
due authentication of the Notes by the Trustee, upon delivery to
the Initial Purchasers against payment therefor in accordance with
the terms hereof, will be validly issued and delivered, and will
constitute valid and binding obligations of the Company entitled to
the benefits of the Indenture, enforceable against the Company in
accordance with their terms, except as such enforceability may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors’ rights generally and by general equitable
principles. The Notes will conform to the description thereof in
each of the Pricing Disclosure Package and the Offering
Memorandum.
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(o) The
Company has all requisite corporate power to execute, deliver and
perform its obligations under this Agreement. This Agreement has
been duly and validly authorized, executed and delivered by the
Company.
(p) The
issue and sale of the Notes and the execution, delivery and
performance by the Company of the Notes, the Indenture and this
Agreement, the application of the proceeds from the sale of the
Notes as described in each of the Pricing Disclosure Package and
the Offering Memorandum and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or
result in a breach or violation of any of the terms or provisions
of, impose any lien, charge or encumbrance upon any property or
assets of the Company or its subsidiaries, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject,
(ii) result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries or
(iii) result in any violation of any statute or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or
any of their properties or assets.
(q) No
consent, approval, authorization or order of, or filing,
registration or qualification with any court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries is required for the issue and sale of the Notes, the
execution, delivery and performance by the Company of the Notes,
the Indenture and this Agreement, the application of the proceeds
from the sale of the Notes as described in each of the Pricing
Disclosure Package and the Offering Memorandum and the consummation
of the transactions contemplated hereby and thereby, except for
consents, approvals, authorizations, orders, filings, registrations
or qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Notes by the Initial Purchasers.
(r) Except
for the shareholders agreements disclosed in each of the Pricing
Disclosure Package and the Offering Memorandum, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities being registered pursuant to any registration statement
filed by the Company under the Securities Act.
(s) Neither
the Company nor any other person acting on behalf of the Company
has sold or issued any securities that would be integrated with the
offering of the Notes contemplated by this Agreement pursuant to
the Securities Act, the rules and regulations thereunder or the
interpretations thereof by the Commission. The Company will take
reasonable precautions designed to insure that any offer or sale,
direct or indirect, in the United States or to any U.S. person (as
defined in Rule 902 under the Securities Act), of any Notes or
any substantially similar security issued by the Company, within
six months subsequent to the date on which the distribution of the
Notes has been completed (as notified to the Company by the Initial
Purchasers), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale
of the Notes in the United States and to U.S. persons
5
contemplated by
this Agreement as transactions exempt from the registration
provisions of the Securities Act, including any sales pursuant to
Rule 144A under, or Regulation D or S of, the Securities
Act.
(t) Neither
the Company nor any of its subsidiaries has sustained, since the
date of the latest audited financial statements included in each of
the Pricing Disclosure Package or the Offering Memorandum, any
material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree and, since such date, there has not been
any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change in, or
affecting, the condition (financial or otherwise), results of
operations, stockholders’ equity, properties, management,
business or prospects of the Company and its subsidiaries, taken as
a whole (a “ Material Adverse Effect
”).
(u) The
historical financial statements (including the related notes and
supporting schedules) included in each of the Pricing Disclosure
Package and the Offering Memorandum present fairly the financial
condition, results of operations and cash flows of the entities
purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with accounting
principles generally accepted in the United States applied on a
consistent basis throughout the periods involved.
(v) Ernst
& Young LLP, who have certified certain financial statements of
the Company, whose report appears in each of the Pricing Disclosure
Package and the Offering Memorandum and who have delivered the
initial letter referred to in Section 7(e) hereof, are independent
public accountants as required by the Securities Act and the rules
and regulations thereunder during the periods covered by the
financial statements on which they reported contained in each of
the Pricing Disclosure Package and the Offering
Memorandum.
(w) The
Company and each of its subsidiaries has good and marketable title
in fee simple to all real property and good and marketable title to
all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects, except such as are described
in each of the Pricing Disclosure Package and the Offering
Memorandum or such as do not 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 real property and buildings held under lease
by the Company or any of its subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as
do not materially interfere with the use made and proposed to be
made of such property and buildings by the Company or any of its
subsidiaries.
(x) The
Company and each of its subsidiaries carry, or are covered by,
insurance from insurers of recognized financial responsibility in
such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar
businesses in similar industries (other than reinsurance of
insurance policies issued).
6
(y) The
Company and each of its subsidiaries own or possess adequate rights
to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses, know-how, software, systems
and technology (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective
businesses and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of
others.
(z) There
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject that would, individually or in the aggregate reasonably be
expected to have a Material Adverse Effect, and to the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or others.
(aa) There
are no material legal or governmental proceedings or material
contracts (as required by Regulation S-K) or other documents
(as required by Regulation S-K) that have not been described
in each of the Pricing Disclosure Package or the Offering
Memorandum for which the failure to describe would be necessary to
make the statements therein, in light of the circumstances under
which they are made, not misleading.
(bb) No
relationship, direct or indirect exists between or among the
Company on the one hand, and the directors, officers or
stockholders of the Company on the other hand, in which the amount
involved exceeds $120,000 per year and is required to be reported
under Regulation S-K Item 404, that has not been
described in each of the Pricing Disclosure Package and the
Offering Memorandum.
(cc) No
labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company or any of
its subsidiaries, is imminent that would reasonably be expected to
have a Material Adverse Effect.
(dd) The
Company and each of its subsidiaries has filed all federal, state,
local and foreign income and franchise tax returns required to be
filed through the date hereof, subject to permitted extensions, and
has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries that
has had (nor does the Company have any knowledge of any tax
deficiencies that, if determined adversely to the Company or any of
its subsidiaries would have) a Material Adverse Effect.
(ee) There
are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale
by the Company of the Notes.
(ff) Since
the date as of which information is given in each of the Pricing
Disclosure Package and the Offering Memorandum through the date
hereof, and except as may otherwise be disclosed in the Offering
Memorandum, the Company has not (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct
or contingent, other than liabilities
7
and obligations
that were incurred in the ordinary course of business,
(iii) entered into any material transaction not in the
ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(gg) The
Company and each of its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains and has
maintained a system of internal accounting controls sufficient to
provide reasonable assurance that (A) transactions are
executed in accordance with management’s general or specific
authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements in conformity with
accounting principles generally accepted in the United States and
to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management’s
general or specific authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
(hh) Neither
the Company nor any of its subsidiaries (i) is in violation of
its charter or by-laws (or similar organizational documents),
(ii) is in default in any respect, and no event has occurred
that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term,
covenant, condition or other obligation contained in any indenture,
mortgage, deed of trust, loan agreement, license or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is
in violation in any respect of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over it or its property or assets or has failed to
obtain or maintain any license, permit, certificate, franchise or
other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business, except
in the case of clauses (ii) and (iii), to the extent that any
such conflict, breach, violation or default would not, in the
aggregate reasonably be expected to have a Material Adverse
Effect.
(ii) Neither
the Company nor any of its subsidiaries, nor, to the knowledge of
the Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its
subsidiaries, has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(jj) None
of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the
Notes), will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U and X of the Board
of Governors of the Federal Reserve System.
(kk) The
statements set forth in each of the Preliminary Offering Memorandum
and the Offering Memorandum under the caption “Description of
the CENts,” insofar as they purport to constitute a summary
of the terms of the Notes, under the caption “Replacement
Capital Covenant,” insofar as they purport to constitute a
summary of the terms of the
8
Replacement
Capital Covenant to be entered into by the Company on the Closing
Date (the “ Replacement Capital Covenant ”) and
under the captions “Certain Material U.S. Federal Income Tax
Consequences,” “Certain ERISA Considerations,”
“Regulation,” “Certain Relationships and Related
Transactions” and “Plan of Distribution”, insofar
as they purport to describe the provisions of the laws and
documents referred to therein, are accurate in all material
respects.
(ll) The
Company and its affiliates has not taken, directly or indirectly,
any action designed to or that has constituted or that reasonably
be expected to cause or result in the stabilization or manipulation
of the price of any security of the Company in connection with the
offering of the Notes.
(mm) The
minute books and records of the Company and its subsidiaries
relating to proceedings of their respective shareholders, boards of
directors, and committees of their respective boards of directors
made available to Simpson Thacher & Bartlett LLP, counsel for
the Initial Purchasers, are their original minute books and records
or are true, correct and complete copies thereof, with respect to
all proceedings of said shareholders, boards of directors and
committees since March 1, 2006 through the date hereof. In the
event that definitive minutes have not been prepared with respect
to any proceedings of such shareholders, boards of directors or
committees, the Company has provided Simpson Thacher & Bartlett
LLP with originals or true, correct and complete copies of draft
minutes or written agendas relating thereto, which drafts and
agendas, if any, reflect all events that occurred in connection
with such proceedings.
(nn) Since
the date of the most recent balance sheet of the Company and its
consolidated subsidiaries reviewed or audited by Ernst & Young
LLP and the audit committee of the board of directors of the
Company, (i) the Company has not been advised of (A) any
significant deficiencies in the design or operation of internal
controls that could adversely affect the ability of the Company and
each of its subsidiaries to record, process, summarize and report
financial data, or any material weaknesses in internal controls and
(B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
internal controls of the Company and each of its subsidiaries, and
(ii) since that date, there have been no significant changes
in internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with
regard to significant deficiencies and material
weaknesses.
(oo) Except
as may be disclosed in each of the Pricing Disclosure Package and
the Offering Memorandum, 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.
(pp) Neither
the Company nor any subsidiary is in violation of or has received
notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees, nor any applicable federal or state wage and hour laws,
nor any state law precluding the denial of credit due to the
neighborhood in which a property is situated, the violation of any
of which would reasonably be expected to have a Material Adverse
Affect.
9
(qq) Except
as may be disclosed in each of the Pricing Disclosure Package and
the Offering Memorandum, (i) the Company and its subsidiaries
possess all material permits, licenses, orders, exemptions,
registrations approvals, consents and other authorizations
(collectively, “ 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, have a Material Adverse Effect and except for
such Governmental Licenses that have been deemed unnecessary by the
appropriate regulatory agency or body; (ii) the Company and
its subsidiaries are in compliance with the terms and conditions of
all the Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a Material
Adverse Effect; (iii) 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 have a Material
Adverse Effect; and (iv) neither the Company nor any of its
subsidiaries has received any written notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(rr) Each
subsidiary of the Company that is engaged in the business of
insurance or reinsurance (each an “ Insurance
Subsidiary ”, collectively the “ Insurance
Subsidiaries ”) is licensed or authorized to conduct an
insurance or reinsurance business, as the case may be, under the
insurance statutes of each jurisdiction in which the conduct of its
business requires such licensing or authorization, except for such
jurisdictions in which the failure of the Insurance Subsidiary to
be so licensed or authorized would not, singly or in the aggregate,
have a Material Adverse Effect. The Insurance Subsidiaries have
made all required filings under applicable insurance statutes in
each jurisdiction where such filings are required, except for such
filings the failure of which to make would not, singly or in the
aggregate, have a Material Adverse Effect. Each of the Insurance
Subsidiaries has all other necessary Governmental Licenses, of and
from all insurance regulatory authorities necessary to conduct
their respective existing businesses as described in each of the
Pricing Disclosure Package and the Offering Memorandum, except
where the failure to have such Authorizations would not, singly or
in the aggregate, have a Material Adverse Effect and no Insurance
Subsidiary has received any notification from any insurance
regulatory authority to the effect that any additional
authorizations are needed to be obtained by any Insurance
Subsidiary in any case where it could reasonably be expected that
the failure to obtain such additional authorizations or the
limiting of the writing of such business would have a Material
Adverse Effect, and no insurance regulatory authority having
jurisdiction over any Insurance Subsidiary has issued any order or
decree impairing, restricting or prohibiting (i) the payment
of dividends by any Insurance Subsidiary to its parent, other than
those restrictions applicable to insurance or reinsurance companies
under such jurisdiction generally, or (ii) the continuation of
the business of the Company or any of the Insurance Subsidiaries in
all material respects as presently conducted, in each case except
where such orders or decrees would not, singly or in the aggregate,
have a Material Adverse Effect.
(ss) Except
as described in each of the Pricing Disclosure Package and the
Offering Memorandum, (i) all ceded reinsurance and
retrocessional treaties, contracts, agreements and arrangements
(“ Reinsurance Contracts ”) to which the Company
or any Insurance 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
10
the failure of
such Reinsurance Contracts to be in full force and effect would
not, singly or in the aggregate, have a Material Adverse Effect,
and (ii) neither the Company nor any Reinsurance Subsidiary
has received any notice from any other party to any Reinsurance
Contract that such other party intends not to perform such
Reinsurance Contract in any material respect, and the Company has
no knowledge that any of the other parties to such Reinsurance
Contracts will be unable to perform its obligations thereunder in
any material respect, except where (A) the Company or the
Insurance Subsidiary has established reserves in its financial
statements which it deems adequate for potential uncollectible
reinsurance or (B) such nonperformance would not have a
Material Adverse Effect.
(tt) The
Company has no knowledge of any threatened or pending downgrading
of the Company’s or any of its subsidiaries’
claims-paying ability rating or financial strength rating by A.M.
Best Company, Inc., Standard & Poor’s Rating Group,
Moody’s Investor Service, Inc., Fitch Ratings, Ltd. or any
other “nationally recognized statistical rating
organizations,” as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act, which currently has
publicly released a rating of the claims-paying ability or
financial strength of the Company or any subsidiary.
Any
certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Initial Purchasers in
connection with the offering of the Notes shall be deemed a
representation and warranty by the Company, as to matters covered
thereby, to each Initial Purchaser.
3.
Purchase of the Notes by the Initial Purchasers, Agreements to
Sell, Purchase and Resell . (a) The Company hereby
agrees, on the basis of the representations, warranties and
agreements of the Initial Purchasers contained herein and subject
to all the terms and conditions set forth herein, to issue and sell
to the Initial Purchasers and, upon the basis of the
representations, warranties and agreements of the Company herein
contained and subject to all the terms and conditions set forth
herein, each Initial Purchaser agrees, severally and not jointly,
to purchase from the Company, at a purchase price of 98.364% of the
principal amount thereof, the principal amount of Notes set forth
opposite the name of such Initial Purchaser in
Schedule I hereto. The Company shall not be obligated
to deliver any of the securities to be delivered hereunder except
upon payment for all of the securities to be purchased as provided
herein.
(b) Each
of the Initial Purchasers, severally and not jointly, hereby
represents and warrants to the Company that it will offer the Notes
for sale upon the terms and conditions set forth in this Agreement
and in the Pricing Disclosure Package. Each of the Initial
Purchasers hereby represents and warrants to, and agrees with, the
Company that such Initial Purchaser: (i) is a QIB with such
knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an
investment in the Notes; (ii) is purchasing the Notes pursuant
to a private sale exempt from registration under the Securities
Act; (iii) in connection with the Exempt Resales, will solicit
offers to buy the Notes only from, and will offer to sell the Notes
only to, the Eligible Purchasers in accordance with this Agreement
and on the terms contemplated by the Pricing Disclosure Package;
and (iv) will not offer or sell the Notes, nor has it offered
or sold the Notes by, or otherwise engaged in, any form of general
solicitation or general advertising (within the meaning of
Regulation D, including, but not limited to, advertisements,
articles, notices or other communications published in any
newspaper, magazine,
11
or similar
medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general
solicitation or general advertising) and will not engage in any
directed selling efforts within the meaning of Rule 902 under
the Securities Act, in connection with the offering of the
Notes.
(c) In
connection with the offer and sale of the Notes in reliance on
Regulation S, each Initial Purchaser, severally and not
jointly, represents, warrants and agrees that:
(i) the Notes have
not been registered under the Securities Act and may not be offered
or sold within the United States or to, or for account or benefit
of, U.S. persons except pursuant to an exemption from, or in
transactions not subject to, the registration requirements of the
Securities Act;
(ii) such Initial
Purchaser has offered and sold the Notes, and will offer and sell
the Notes, (A) as part of its distribution at any time and
(B) otherwise until 40 days after the later of the
commencement of the offering of the Notes and the Closing Date,
only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities
Act;
(iii) none of such
Initial Purchaser or any of its affiliates or any other person
acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and all
such persons have complied and will comply with the offering
restriction requirements of Regulation S;
(iv) at or prior
to the confirmation of sale of any Notes sold in reliance on
Regulation S, it will have sent to each distributor, dealer or
other person receiving a selling concession, fee or other
remuneration that purchases Notes from it durin
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