UNDERWRITING AGREEMENT

Underwriting Agreement

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AMBAC FINANCIAL GROUP INC

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Title: UNDERWRITING AGREEMENT
Governing Law: New York Date: 3/12/2008
Industry: INSPPY Law Firm: Wachtell Lipton;Bryan Cave;Sidley Austin;Cadwalader Wickersham Sector: FINANC

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Exhibit 1.1

EXECUTION COPY

5,000,000

AMBAC FINANCIAL GROUP, INC.

Equity Units

UNDERWRITING AGREEMENT

March 6, 2008

C REDIT S UISSE S ECURITIES (USA) LLC

Eleven Madison Avenue

New York, N.Y. 10010-3629

C ITIGROUP G LOBAL M ARKETS I NC .

388 Greenwich Street

New York, N.Y. 10013

B ANC OF A MERICA S ECURITIES LLC

9 West 57th Street

New York, NY 10019

UBS S ECURITIES LLC

299 Park Avenue

New York, N.Y. 10171

As Representatives of the Several Underwriters

named in Schedule A hereto

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, N. Y. 10010-3629

Dear Sirs:

1. Introductory . Ambac Financial Group, Inc., a Delaware corporation (“ Company ”), agrees with the several Underwriters named in Schedule A hereto (“ Underwriters ”), for whom you are acting as representatives (“ Representatives ”), to issue and sell to the several Underwriters 5,000,000 Equity Units of the Company (“ Firm Securities ”), and also agrees to issue and sell to the Underwriters, at the option of the Underwriters, an aggregate of not more than 750,000 additional Equity Units of the Company (“ Optional Securities ”) as set forth below. The Firm Securities and the Optional Securities are herein collectively called the “ Offered Securities ”.

Each Equity Unit has a stated amount of $50.00 (“ Stated Amount ”) and initially consists of (i) a Purchase Contract (each, a “ Purchase Contract ”) pursuant to which the holder will agree to purchase and the Company will agree to sell on May 17, 2011 (“ Purchase Contract Settlement Date ”), subject to acceleration in connection with any early settlement of such Purchase Contract pursuant to the provisions of the Purchase Contract Agreement (as defined below) for a price of the Stated Amount per Equity Unit, (x) in the event that the Authorized Share Condition (as defined herein) has been satisfied at such time, a

number of shares of common stock (“ Issuable Common Stock ”) of the Company, par value $0.01 per share (“ Common Stock ”), determined pursuant to the terms of the Purchase Contract Agreement (as defined herein), or (y) in the event that the Authorized Share Condition has not been satisfied at such time, a number of shares of series A mandatory convertible participating preferred stock (“ Issuable Preferred Stock ”) of the Company (“ Participating Preferred Stock ”), as determined pursuant to the terms of the Purchase Contract Agreement and the Certificate of Designations with respect thereto, and (ii) a 1/20, or 5.0%, undivided beneficial ownership interest in a $1,000 principal amount senior note of the Company due 2021 (“ Notes ”).

The Purchase Contracts will be issued pursuant to the Purchase Contract Agreement, to be dated the Closing Date (as defined herein) (“ Purchase Contract Agreement ”), between the Company and The Bank of New York, as purchase contract agent (“ Purchase Contract Agent ”). The Purchase Contracts together with the related Notes are herein referred to as the “ Corporate Units .”

A holder of Corporate Units, at its option, may elect to create “ Treasury Units ” by substituting pledged U.S. Treasury securities for any pledged ownership interests in the Notes. Unless otherwise indicated, the term “ Equity Units ” includes both Corporate Units and Treasury Units.

The Notes are to be issued under a senior indenture, dated as of February 15, 2006 (“ Base Indenture ”), between the Company and The Bank of New York, as trustee (“ Trustee ”), as amended and supplemented by a supplemental indenture to be dated the Closing Date between the Company and the Trustee (“ First Supplemental Indenture ”, together with the Base Indenture, “ Indenture ”).

A holder’s ownership interest in the Notes initially will be pledged to secure such holder’s obligation to purchase the Issuable Common Stock or Issuable Preferred Stock, as the case may be, on the Purchase Contract Settlement Date, such pledge to be on the terms and conditions set forth in the Pledge Agreement (“ Pledge Agreement ”), to be dated as of the Closing Date (as defined herein), among the Company, The Bank of New York, as collateral agent, custodial agent and securities intermediary (“ Collateral Agent ”), and the Purchase Contract Agent.

Pursuant to a remarketing agreement to be dated the Closing Date (“ Remarketing Agreement ”) between the Company and the Representatives, acting as reset agent and remarketing agent (“ Remarketing Agents ”), the Notes will be remarketed, subject to certain terms and conditions.

The “ Component Securities ” means, collectively, the Purchase Contracts, the Notes and the Issuable Common Stock or Issuable Preferred Stock, as the case may be.

The terms and rights of any particular issuance of Offered Securities and/or Component Securities shall be as specified in (i) the Indenture, (ii) the Purchase Contract Agreement and (iii) the Pledge Agreement, as applicable (each document listed in clauses (i) through (iii), together with the Remarketing Agreement, a “ Securities Agreement ” and collectively the “ Securities Agreements ”).

As part of the offering contemplated by this Agreement, Citigroup Global Markets Inc. (“ Citi ”) has agreed to reserve out of the Offered Securities set forth opposite its name on the Schedule II to this Agreement, up to one percent (1%) of the Equity Units, for sale to the Company’s officers, directors and managing directors (collectively, “ Participants ”), as set forth in the General Disclosure Package and Final Prospectus (each as defined below) under the heading “Underwriting” therein (the “ Directed Share Program ”). The Offered Securities to be sold by Citi pursuant to the Directed Share Program (the “ Directed Shares ”) will be sold by Citi pursuant to this Agreement at the public offering price. Any Directed Shares not orally confirmed for purchase by any Participants by 7:30 A.M. New York City time

on the business day following the date on which this Agreement is executed will be offered to the public by the Representatives as set forth in the Final Prospectus.

Concurrently herewith, the Company also proposes to issue and sell, pursuant to a separate underwriting agreement (“ Common Stock Underwriting Agreement ”) to be entered into by and among the Company and the underwriters named therein (“ Common Stock Underwriters ”), 171,111,112 shares of Common Stock, and the Company also proposes to issue and sell to the Common Stock Underwriters, at the option of the Common Stock Underwriters, an aggregate of not more than 25,666,667 additional shares of Common Stock to cover over-allotments in connection therewith.

2. Representations and Warranties of the Company . The Company represents and warrants to, and agrees with, the several Underwriters that, as of the date hereof and as of each Closing Date:

(a) Filing and Effectiveness of Registration Statement; Certain Defined Terms . The Company has filed with the Commission a registration statement on Form S-3 (No. 333-131888), as amended by Post-Effective Amendments Nos. 1 and 2 thereto, including a related prospectus or prospectuses, covering the registration of the Offered Securities under the Act (as defined herein), which has become effective. “ Registration Statement ” at any particular time means such registration statement in the form then filed with the Commission (as defined herein), including any amendment thereto, any document incorporated by reference therein and all 430B Information with respect to such registration statement, that in any case has not been superseded or modified. “ Registration Statement ” without reference to a time means the Registration Statement as of the Effective Time. For purposes of this definition, 430B Information shall be considered to be included in the Registration Statement as of the time specified in Rule 430B.

For purposes of this Agreement:

“ 430B Information ” means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430B(e) or retroactively deemed to be a part of the Registration Statement pursuant to Rule 430B(f).

“ Act ” means the Securities Act of 1933, as amended.

“ Applicable Time ” means 7:30 am (Eastern time) on March 7, 2008.

“ Closing Date ” has the meaning defined in Section 3 hereof.

“ Commission ” means the Securities and Exchange Commission.

“ Effective Time ” of the Registration Statement relating to the Offered Securities means the time of the first contract of sale for the Offered Securities.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Final Prospectus ” means the Statutory Prospectus that discloses the public offering price, other 430B Information and other final terms of the Offered Securities and otherwise satisfies Section 10(a) of the Act.

“ General Use Issuer Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being so specified in Schedule B to this Agreement.

“ Issuer Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Offered Securities 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).

“ Limited Use Issuer Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus.

“ Rules and Regulations ” means the rules and regulations of the Commission.

“ Securities Laws ” means, collectively, the Sarbanes-Oxley Act of 2002 (“ Sarbanes-Oxley ”), the Act, the Exchange Act, the Trust Indenture Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and the rules of the New York Stock Exchange (“ Exchange Rules ”).

“ Statutory Prospectus ” with reference to any particular time means the prospectus relating to the Offered Securities that is included in the Registration Statement immediately prior to that time, including all 430B Information with respect to the Registration Statement. For purposes of the foregoing definition, 430B Information shall be considered to be included in the Statutory Prospectus only as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule 424(b) and not retroactively.

“ Trust Indenture Act ” means the Trust Indenture Act of 1939.

Unless otherwise specified, a reference to a “rule” is to the indicated rule under the Act.

(b) Compliance with Securities Act Requirements . (i) (A) At the time that the Registration Statement initially became effective, (B) at the time of each amendment thereto for purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment, incorporated report or form of prospectus), (C) at the time that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Act) of the Offered Securities, (D) at the Effective Time relating to the Offered Securities and (E) on the Closing Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) (A) on its date, (B) at the time of filing the Final Prospectus pursuant to Rule 424(b) and (C) on the Closing Date, the Final Prospectus will conform in all material respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations, and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The preceding sentence does not apply to (x) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the Trustee, or (y) statements in or omissions from any such document based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information referred to in this clause (y) is that information described as such in Section 8(b) hereof.

(c) Automatic Shelf Registration Statement . (i) Well-Known Seasoned Issuer Status . (A) At the time of initial filing of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (C) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer relating to the Offered Securities in reliance on the exemption of Rule 163, and (D) at the Effective Time, the Company was a “well known seasoned issuer” as defined in Rule 405.

(ii) Effectiveness of Automatic Shelf Registration Statement . The Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405, that initially became effective no earlier than three years prior to the date of this Agreement. Post-Effective Amendment No. 2 to the Registration Statement was effective upon filing it with the Commission. If immediately prior to the Renewal Deadline (as defined herein), any of the Offered Securities remain unsold by the Underwriters, the Company will prior to the Renewal Deadline file, if it has not already done so and is eligible to do so, a new automatic shelf registration statement relating to the Offered Securities, in a form satisfactory to the Representatives. If the Company is no longer eligible to file an automatic shelf registration statement, the Company will prior to the Renewal Deadline, if it has not already done so, file a new shelf registration statement relating to the Offered Securities, in a form satisfactory to the Representatives, and will use its best efforts to cause such registration statement to be declared effective within 180 days after the Renewal Deadline. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Offered Securities to continue as contemplated in the expired registration statement relating to the Offered Securities. References herein to the Registration Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be. “ Renewal Deadline ” means the third anniversary of the initial effective time of the Registration Statement.

(iii) Eligibility to Use Automatic Shelf Registration Form . The Company has not received from the Commission any notice pursuant to Rule 401(g)(2) objecting to use of the automatic shelf registration statement form. If at any time when Offered Securities remain unsold by the Underwriters the Company receives from the Commission a notice pursuant to Rule 401(g)(2) or otherwise ceases to be eligible to use the automatic shelf registration statement form, the Company will (i) promptly notify the Representatives in writing, (ii) promptly file a new registration statement or post-effective amendment on the proper form relating to the Offered Securities, in a form satisfactory to the Representatives, (iii) use its best efforts to cause such registration statement or post-effective amendment to be declared effective as soon as practicable, and (iv) promptly notify the Representatives of such effectiveness. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Offered Securities to continue as contemplated in the registration statement that was the subject of the Rule 401(g)(2) notice or for which the Company has otherwise become ineligible. References herein to the Registration Statement shall include such new registration statement or post-effective amendment, as the case may be.

(iv) Filing Fees . The Company has paid or shall, prior to the First Closing Date, pay the required Commission filing fees relating to the Offered Securities, the Notes, the Issuable Common Stock and Issuable Preferred Stock within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).

(d) Ineligible Issuer Status . (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Offered Securities and (ii) at the date of this Agreement, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, including (x) the Company or any other subsidiary in the preceding three years not having been convicted of a felony or misdemeanor or having been made the subject of a judicial or administrative decree or order as described in Rule 405 and (y) the Company in the preceding three years not having been

the subject of a bankruptcy petition or insolvency or similar proceeding, not having had a registration statement be the subject of a proceeding under Section 8 of the Act and not being the subject of a proceeding under Section 8A of the Act in connection with the offering of the Offered Securities, all as described in Rule 405.

(e) General Disclosure Package . As of the Applicable Time, neither (i) the General Use Issuer Free Writing Prospectus(es) issued at or prior to the Applicable Time, the preliminary prospectus supplement, dated March 5, 2008, including the base prospectus, dated January 16, 2008 (which is the most recent Statutory Prospectus distributed to investors generally), and the other information, if any, stated in Schedule B to this Agreement to be included in the General Disclosure Package, all considered together (collectively, the “ General Disclosure Package ”), nor (ii) any individual Limited Use Issuer Free Writing Prospectus or any “road show” (as defined in Rule 433 of the Rules and Regulations) not constituting an Issuer Free Writing Prospectus, in each case 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. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.

(f) (i) Issuer Free Writing Prospectuses . 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 Offered Securities or until any earlier date that the Company notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement, including any prospectus supplement deemed to be a part thereof that has not been superseded or modified. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement, including any prospectus supplement deemed to be a part thereof that has not been superseded or modified, or as a result of which such Issuer Free Writing Prospectus, if republished immediately following such event or development, 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 under which they were made, not misleading, (A) the Company has promptly notified or will promptly notify the Representatives in writing and (B) the Company has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

(ii) Incorporated Documents . The documents incorporated or deemed to be incorporated by reference into the Registration Statement, the General Disclosure Package and the Final 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 Exchange Act and the Rules and Regulations thereunder, and, when read together with the other information in the General Disclosure Package or the Final Prospectus, as of their respective dates and at the Closing Date, 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, in the light of the circumstances under which they were made, not misleading.

(iii) Independent Accountants . KPMG LLP, the accounting firm that certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Final Prospectus and audited the Company’s internal control over financial reporting and management’s assessment thereof, is an independent registered public accounting firm as required by the Act and the Rules and Regulations thereunder.

(iv) Exhibits . There are no contracts or documents which are required to be described in the Registration Statement, the General Disclosure Package (or any part thereof) or the Final Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described or filed as required.

(v) Financial Statements . The financial statements of the Company and its consolidated subsidiaries included in the Registration Statement, the General Disclosure Package and the Final Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations, stockholder’s equity and cash flows of the Company and its consolidated subsidiaries for the periods shown, and, except as otherwise disclosed in the General Disclosure Package, such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“ GAAP ”), applied on a consistent basis. The schedules included in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein. The selected consolidated financial data of the Company and its consolidated subsidiaries and the summary financial information of the Company and its consolidated subsidiaries included in the General Disclosure Package and the Final Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement, the General Disclosure Package and the Final Prospectus.

(g) Good Standing of the Company . The Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own, lease and operate its properties and conduct its business as described in the General Disclosure Package and Final Prospectus and to enter into and perform its obligations under this Agreement, the Common Stock Underwriting Agreement, the Private Placement Agreement (defined below) and the Securities Agreements; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to so qualify or be in good standing would not, individually or in the aggregate, be reasonably likely to result in a material adverse effect on the condition (financial or otherwise), results of operations, business, properties or prospects of the Company and its subsidiaries, taken as a whole (“ Material Adverse Effect ”).

(h) Subsidiaries . Each subsidiary of the Company that is a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X (each, a “ Subsidiary ” and, collectively, the “ 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 corporate power and authority to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package and the Final 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 so qualify or to be in good standing would not, individually or in the

aggregate, be reasonably likely to result in a Material Adverse Effect; except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly issued and is fully paid and non-assessable; each such Subsidiary is wholly owned by the Company, directly or through subsidiaries; all of the outstanding capital stock of such Subsidiaries which is owned by the Company, directly or through subsidiaries, is owned free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, and none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. Each direct or indirect insurance company subsidiary of the Company is duly organized and licensed as an insurance company in its jurisdiction of incorporation and is duly licensed or authorized as an insurer in each other jurisdiction where it is required to be so licensed or authorized to conduct its business.

(i) No Material Adverse Change in Business . Except as disclosed in the General Disclosure Package, since the end of the period covered by the latest audited financial statements included in the General Disclosure Package (i) there has been no change or any development in the condition (financial or otherwise), results of operations, business prospects or properties of the Company and its subsidiaries, taken as a whole, that is material and adverse, (ii) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock and (iii) there has been no material adverse change in the capital stock, short-term indebtedness, long-term indebtedness, net current assets or net assets of the Company and its subsidiaries.

(j) Execution and Delivery of Indenture . The Indenture has been duly authorized by the Company and has been duly qualified under the Trust Indenture Act, and when executed and delivered by the Company (assuming due authorization, execution and delivery by the Trustee), will be duly executed and delivered by the Company and will constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting 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). The Indenture will conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus, and will be in substantially the form filed or incorporated by reference, as the case may be, as exhibits to the Registration Statement.

(k) Equity Units . The Equity Units have been duly authorized by the Company and, when executed, issued and delivered by the Company against payment therefor on the Closing Date in accordance with the terms of this Agreement and the Purchase Agreement, will be duly executed and delivered by the Company and will (assuming due authentication thereof by the Purchase Contract Agent) constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as (i) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally, provided , however , that upon the occurrence of a Termination Event (as defined in the Purchase Contract), Section 365(e)(1) of the Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended) would not substantively limit the provisions of Sections 3.15 and 5.6 of the Purchase Contract Agreement or Section 5.04 of the Pledge Agreement that require termination of the Purchase Contracts and release of the Collateral Agent’s security interest in (1) the Notes, (2) the Treasury Units or (3) the Applicable Ownership Interest of the applicable Treasury Portfolio (as defined in the Purchase Contract Agreement), as applicable, and the transfer of such securities to the Purchase Contract Agent (for the benefit of the holders of the Offered Securities); provided ,

further , however , that (x) the foregoing is subject to the equitable powers of the Bankruptcy Court and the Bankruptcy Court’s power under Section 105(a) of the Bankruptcy Code and (y) procedural restrictions respecting relief from the automatic stay under Section 362 of the Bankruptcy Code may delay the timing of the exercise of such rights and remedies; and (ii) is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Equity Units will be in the form contemplated by, and will be entitled to the benefits of, the relevant Securities Agreements; the Equity Units will conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus and will be in substantially the form filed or incorporated by reference, as the case may be, as exhibits to the Registration Statement; and the issuance of the Equity Units is not subject to preemptive or other similar rights.

(l) Purchase Contracts . The Purchase Contracts underlying the Equity Units have been duly authorized and, when executed, issued and delivered by the Company on the Closing Date in accordance with the terms of this Agreement and the Purchase Contract Agreement, will be duly executed and delivered by the Company and will (assuming due authentication thereof by the Purchase Contract Agent) constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as (i) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally; provided , however , that upon the occurrence of a Termination Event, Section 365(e)(1) of the Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended) would not substantively limit the provisions of Sections 3.15 and 5.6 of the Purchase Contract Agreement or Section 5.04 of the Pledge Agreement that require termination of the Purchase Contracts and release of the Collateral Agent’s security interest in (1) the Notes, (2) the Treasury Units or (3) the Applicable Ownership Interest of the applicable Treasury Portfolio, as applicable, and the transfer of such securities to the Purchase Contract Agent (for the benefit of the holders of the Offered Securities); provided , further , however , that (x) the foregoing is subject to the equitable powers of the Bankruptcy Court and the Bankruptcy Court’s power under Section 105(a) of the Bankruptcy Code and (y) procedural restrictions respecting relief from the automatic stay under Section 362 of the Bankruptcy Code may delay the timing of the exercise of such rights and remedies; and (ii) is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Purchase Contracts will be in the form contemplated by, and will be entitled to the benefits of, the relevant Securities Agreements; the Purchase Contracts will conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus and will be in substantially the form filed or incorporated by reference, as the case may be, as exhibits to the Registration Statement; and the issuance of the Purchase Contracts is not subject to preemptive or other similar rights.

(m) Notes . The Notes have been duly authorized by the Company and, when executed, issued and delivered by the Company on the Closing Date in accordance with the terms of this Agreement and the Indenture, will be duly executed and delivered by the Company and will (assuming due authorization, execution and delivery thereof by the Trustee) constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting 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). The Notes will be in the form contemplated by, and will be entitled to the benefits of, the Indenture; the Notes will conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus and will be in substantially the form filed or incorporated by reference, as the

case may be, as exhibits to the Registration Statement; and the issuance of the Notes is not subject to preemptive or other similar rights.

(n) Capital Stock. All of the shares of (i) Common Stock to be issued and sold by the Company to the Common Stock Underwriters under the Common Stock Underwriting Agreement and/or to the Private Placement Purchasers (as defined herein) under the Private Placement Agreement will be validly issued and fully paid and non-assessable and will conform in all material respects to the description of the Common Stock contained in the prospectus relating thereto, and (ii) Issuable Common Stock upon satisfaction of the Authorized Share Condition and Issuable Preferred Stock initially issuable pursuant to the Purchase Contracts, the Purchase Contract Agreement and the Pledge Agreement and, with respect to the Issuable Preferred Stock, in accordance with the Certificate of Designations with respect thereto, have been duly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Purchase Contracts, the Purchase Contract Agreement, the Pledge Agreement, and, with respect to the Issuable Preferred Stock, the Certificate of Designations with respect thereto, will be validly issued and fully paid and non-assessable and will conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus; the stockholders of the Company have no preemptive rights with respect to the Offered Securities, the Common Stock being sold pursuant to the Common Stock Underwriting Agreement, the Issuable Common Stock or the Issuable Preferred Stock, and none of the outstanding shares of capital stock of the Company have been issued in violation of any preemptive or similar rights of any security holder.

(o) The Purchase Contract Agreement . The Purchase Contract Agreement has been duly authorized by the Company and, when executed and delivered by the Company, will be duly executed and delivered by the Company, and will (assuming due authorization, execution and delivery by the Purchase Contract Agent) constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as (i) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally; provided , however , that upon the occurrence of a Termination Event, Section 365(e)(1) of the Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended) would not substantively limit the provisions of Sections 3.15 and 5.6 of the Purchase Contract Agreement or Section 5.04 of the Pledge Agreement that require termination of the Purchase Contracts and release of the Collateral Agent’s security interest in (1) the Notes, (2) the Treasury Units or (3) the Applicable Ownership Interest of the applicable Treasury Portfolio, as applicable, and the transfer of such securities to the Purchase Contract Agent (for the benefit of the holders of the Offered Securities); provided , further , however , that (x) the foregoing is subject to the equitable powers of the Bankruptcy Court and the Bankruptcy Court’s power under Section 105(a) of the Bankruptcy Code and (y) procedural restrictions respecting relief from the automatic stay under Section 362 of the Bankruptcy Code may delay the timing of the exercise of such rights and remedies; and (ii) is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). At the time of such execution and delivery, the Purchase Contract Agreement will conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus and will be in substantially the form filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement.

(p) The Remarketing Agreement . The Remarketing Agreement has been duly authorized by the Company and, when executed and delivered by the Company, will be duly executed and delivered by the Company, and will (assuming due authorization, execution and delivery by the Remarketing Agent) constitute a valid and binding obligation of the Company, enforceable

against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting 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). At the time of such execution and delivery, the Remarketing Agreement will conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus and will be in substantially the form filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement.

(q) The Private Placement Agreement . The private placement agreement between the Company and the purchasers named therein (the “ Private Placement Purchasers ” dated the date hereof (the “ Private Placement Agreement ”) has been duly authorized, executed and delivered by the Company, and (assuming due authorization, execution and delivery by the Private Placement Purchasers) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting 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). At the time of execution and delivery, the Private Placement Agreement conforms in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus and will be in substantially the form to be filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement.

(r) The Pledge Agreement . (i) The Pledge Agreement has been duly authorized by the Company and, when executed and delivered by the Company, will be duly executed and delivered by the Company, and will (assuming due authorization, execution and delivery by the Purchase Contract Agent and the Collateral Agent) constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as (A) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally; provided , however , that upon the occurrence of a Termination Event, Section 365(e)(1) of the Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended) would not substantively limit the provisions of Sections 3.15 and 5.6 of the Purchase Contract Agreement or Section 5.04 of the Pledge Agreement that require termination of the Purchase Contracts and release of the Collateral Agent’s security interest in (1) the Notes, (2) the Treasury Units or (3) the Applicable Ownership Interest of the applicable Treasury Portfolio, as applicable, and the transfer of such securities to the Purchase Contract Agent (for the benefit of the holders of the Offered Securities); provided , further , however , that (x) the foregoing is subject to the equitable powers of the Bankruptcy Court and the Bankruptcy Court’s power under Section 105(a) of the Bankruptcy Code and (y) procedural restrictions respecting relief from the automatic stay under Section 362 of the Bankruptcy Code may delay the timing of the exercise of such rights and remedies; and (B) enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). At the time of such execution and delivery, the Pledge Agreement will (x) conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus, and (y) be in substantially the form filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement.

(ii) The provisions of the Pledge Agreement are effective to create in favor of the Collateral Agent for the benefit of the Company a valid security interest under the Uniform Commercial Code as in effect in the State of New York on the date hereof (“ UCC ”) in all “security entitlements” (as defined in Section 8-102(a)(17) of the UCC

and as defined in 31 C.F.R. Part 357 Subparts A and B of the Federal Book-Entry Regulations (“ Federal Book-Entry Regulations ”) now or hereafter carried in to the Collateral (as defined in the Pledge Agreement); and the provisions of the Pledge Agreement are effective under the UCC and the Federal Book-Entry Regulations to perfect the security interest of the Collateral Agent for the benefit of the Company in the Collateral.

(s) Listing . The Equity Units at the First Closing Date will have been approved for listing on the New York Stock Exchange (“ Exchange ”), subject to notice of issuance, and at each Closing Date, the Equity Units issued at or prior to such Closing Date, upon notice of issuance, will be listed on the Exchange. If satisfaction of the Authorized Share Condition has occurred prior to or at the settlement of any purchase contract associated with the Equity Units, the shares of Issuable Common Stock shall be approved for listing on the Exchange, subject to official notice of issuance, at such time of settlement. If, on and after the date one hundred twenty days following the date of this Agreement, satisfaction of the Authorized Share Condition has not occurred prior to or at the settlement of any purchase contract associated with the Equity Units, the shares of Issuable Preferred Stock shall be approved for listing on the Exchange or other national securities exchange or market, subject to official notice of issuance, at such time.

(t) Capitalization . All issued and outstanding shares of capital stock of the Company have been duly authorized; the authorized equity capitalization of the Company is as set forth in the General Disclosure Package and the Final Prospectus; all outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, and do or will, as the case may be, conform in all material respects to the respective statements relating thereto contained in the General Disclosure Package and in the Final Prospectus.

(u) No Finder’s Fee . There are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or other like payment in connection with this offering.

(v) Absence of Further Requirements . No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental agency or body (including, without limitation, any insurance regulatory agency or body) is required for the execution by the Company of this Agreement or the Securities Agreements, or the consummation of the transactions contemplated hereby or thereby, or for the performance by the Company of its obligations under this Agreement, the Securities Agreement or the Offered Securities (including the issuance and sale of the Offered Securities), except as disclosed in the General Disclosure Package and the Final Prospectus and such as have been already obtained or as may be required under the Act or the Rules and Regulations thereunder or state securities laws.

(w) Absence of Defaults and Conflicts Resulting from Transaction . The execution, delivery and performance of the Securities Agreements and this Agreement, and the issuance and sale of the Offered Securities and Component Securities and compliance with the terms and provisions hereof and thereof, will not violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (a) the charter or by-laws of the Company or any of the Subsidiaries, (b) any order, law, treaty, rule, regulation, judgment or determination applicable to the Company or any of the Subsidiaries of any court, governmental agency or body (including, without limitation, any insurance regulatory agency or body) or arbitrator having jurisdiction over the Company or any of the Subsidiaries (other than any violation of or conflict with any such order,

law, treaty, rule, regulation, judgment or determination that would not, individually or in the aggregate with any other violation or conflict, be reasonably likely to adversely affect the performance by the Company of its obligations under this Agreement, the Securities Agreements or the Offered Securities (including the issuance and sale of the Offered Securities) and would not, individually or in the aggregate with all such other violations or conflicts, be reasonably likely to have a Material Adverse Effect) or (c) the terms of any bond, debenture, note, other evidence of indebtedness, agreement, indenture, lease or other instrument to which the Company or any of its subsidiaries is a party or by which any of them is bound or by which any of their respective properties is subject, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any of the Subsidiaries pursuant to the terms of any such bond, debenture, note, other evidence of indebtedness, agreement, indenture, lease or other instrument (other than any conflict, breach or default or lien, charge or encumbrance that would not, individually or in the aggregate, be reasonably likely to adversely affect the performance by the Company of its obligations under this Agreement, the Securities Agreements or the Offered Securities (including the issuance and sale of the Offered Securities) and would not, individually or in the aggregate, be reasonably likely to result in a Material Adverse Effect).

(x) Absence of Existing Defaults and Conflicts . Neither the Company nor any of its Subsidiaries is in violation of its respective charter or by-laws or in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of them is subject, except such defaults that would not, individually or in the aggregate, be reasonably likely to result in a Material Adverse Effect.

(y) Authorization of this Agreement and the Common Stock Underwriting Agreement . Each of this Agreement and the Common Stock Underwriting Agreement has been duly authorized, executed and delivered by the Company.

(z) Possession of Licenses and Permits . The Company and its Subsidiaries possess such certificates, permits, licenses, approvals, franchises, consents and other authorizations (collectively, “ Licenses ”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies (including, without limitation, any Licenses from any insurance regulatory agencies or bodies) necessary to own their respective properties or to conduct the business now conducted by them or disclosed in the General Disclosure Package to be conducted by them, except such as would not, individually or in the aggregate with all such other Licenses that have not been obtained, be reasonably likely to have a Material Adverse Effect; the Company and its Subsidiaries are in compliance with the terms and conditions of all such Licenses, except where the failure so to comply would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect; all of the Licenses (including, without limitation, any Licenses from any insurance regulatory agencies or bodies) are valid and in full force and effect, except when the invalidity of such Licenses or the failure of such Licenses to be in full force and effect would not, individually or in the aggregate, be reasonably likely to have 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 Licenses (including, without limitation, any Licenses from any insurance regulatory agencies or bodies) which would, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, be reasonably likely to result in a Material Adverse Effect.

(aa) Leaseholds . Except as disclosed in the General Disclosure Package and Final Prospectus, the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no terms or provisions that would materially interfere wit