DELPHI FINANCIAL GROUP,
INC.
Barclays Capital
Inc.
745 Seventh Avenue
New York, New York 10019
Delphi
Financial Group, Inc., a Delaware corporation (the “
Company ” ), proposes to sell 3,000,000 shares
(the “ Firm Stock ” ) of the
Company’s Class A common stock, par value $0.01 per
share (the “ Common Stock ” ). In
addition, the Company proposes to grant to the underwriters (the
“ Underwriters ” ) named in
Schedule 1 attached to this agreement (this “
Agreement ” ) an option to purchase up to 450,000
additional shares of the Common Stock on the terms set forth in
Section 2 (the “ Option Stock ” ).
The Firm Stock and the Option Stock, if purchased, are hereinafter
collectively called the “ Stock .” This
is to confirm the agreement concerning the purchase of the Stock
from the Company by the Underwriters. In the event only a single
Underwriter is named in Schedule 1, then all references to the
“Underwriters” shall be deemed to mean and refer to
such Underwriter, mutatis mutandis .
1.
Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration
statement on Form S-3 relating to the Stock (i) has been
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the “ Securities
Act ”), and the rules and regulations (together, the
“ Rules and Regulations ”) of the
Securities and Exchange Commission (the “
Commission ”) thereunder; (ii) has been filed
with the Commission under the Securities Act; and (iii) is
effective under the Securities Act. Copies of such registration
statement and any amendment thereto have been delivered by the
Company to Barclays Capital Inc. as the representative (“
you ” or the “
Representative ”) of the Underwriters. As used
in this Agreement:
(i) “
Applicable Time ” means August 18, 2009 at
8:45 a.m. (New York City time);
(ii) “
Effective Date ” means any date as of which any
part of such registration statement relating to the Stock became,
or is deemed to have become, effective under the Securities Act in
accordance with the Rules and Regulations;
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(iii) “
Issuer Free Writing Prospectus ” means each
“free writing prospectus” (as defined in Rule 405
of the Rules and Regulations) prepared by or on behalf of the
Company or used or referred to by the Company in connection with
the offering of the Stock;
(iv) “
Preliminary Prospectus ” means any preliminary
prospectus relating to the Stock included in such registration
statement or filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations, including any preliminary prospectus
supplement thereto relating to the Stock;
(v) “
Pricing Disclosure Package ” means, as of the
Applicable Time, the most recent Preliminary Prospectus, together
with the information included in Schedule 4 hereto and each
Issuer Free Writing Prospectus filed or used by the Company on or
before the Applicable Time, other than a road show that is an
Issuer Free Writing Prospectus under Rule 433 of the Rules and
Regulations;
(vi) “
Prospectus ” means the final prospectus
relating to the Stock, including any prospectus supplement thereto
relating to the Stock, as filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations; and
(vii) “
Registration Statement ” means, collectively,
the various parts of such registration statement, each as amended
as of the Effective Date for such part, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration
statement.
Any reference
to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Form S-3 under the Securities Act as of the
date of such Preliminary Prospectus or the Prospectus, as the case
may be, any reference to the Registration Statement shall be deemed
to refer to and include the documents incorporated by reference
therein pursuant to Form S-3 under the Securities Act as of the
date of this Agreement; and all references to information that is
“included” or “contained” in any
Preliminary Prospectus, the Prospectus, the Registration Statement
or the Pricing Disclosure Package (and any similar references)
shall mean and include all information that is incorporated by
reference therein pursuant to Form S-3 under the Securities Act.
Any reference to the “ most recent Preliminary
Prospectus ” shall be deemed to refer to the latest
Preliminary Prospectus included in the Registration Statement or
filed pursuant to Rule 424(b) prior to or on the date hereof. Any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”),
after the date of such Preliminary Prospectus or the Prospectus, as
the case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; and any reference
to any amendment to the Registration Statement shall be deemed to
refer to any document filed under the Exchange Act after the date
of this Agreement that is incorporated by reference in the
Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending the effectiveness of the Registration
Statement, and no proceeding or examination for such
3
purpose has
been instituted or, to the Company’s knowledge, threatened by
the Commission. The Commission has not notified the Company of any
objection to the use of the form of the Registration
Statement.
(b) The Company
has been since the time of initial filing of the Registration
Statement and continues to be a “well-known seasoned
issuer” (as defined in Rule 405) eligible to use Form
S-3 for the offering of the Stock, including not having been an “ineligible
issuer” (as defined in Rule 405) at any such time or
date. The Registration Statement is an “automatic shelf
registration statement” (as defined in Rule 405) and was
filed not earlier than the date that is three years prior to the
applicable Delivery Date (as defined in Section 4).
(c) The
Registration Statement conformed and will conform in all material
respects on the Effective Date and on the applicable Delivery Date,
and any amendment to the Registration Statement filed after the
date hereof will conform in all material respects when filed, to
the requirements of the Securities Act and the Rules and
Regulations. The most recent Preliminary Prospectus conformed, and
the Prospectus will conform, in all material respects when filed
with the Commission pursuant to Rule 424(b) and on the applicable
Delivery Date to the requirements of the Securities Act and the
Rules and Regulations. The documents incorporated by reference in
any Preliminary Prospectus or the Prospectus conformed, and any
further documents so incorporated will conform, when filed with the
Commission, in all material respects to the requirements of the
Exchange Act or the Securities Act, as applicable, and the rules
and regulations of the Commission thereunder.
(d) The
Registration Statement did not, as of the Effective Date, contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no
representation or warranty is made as to information contained in
or omitted from the Registration Statement in reliance upon and in
conformity with written information furnished to the Company
through the Representative by or on behalf of any Underwriter
specifically for inclusion therein, which information is specified
in Section 8(e).
(e) The Prospectus
will not, as of its date and on the applicable Delivery Date,
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; provided that no
representation or warranty is made as to information contained in
or omitted from the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representative by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in
Section 8(e).
(f) The documents
incorporated by reference in any Preliminary Prospectus or the
Prospectus did not, and any further documents filed and
incorporated by reference therein will not, when filed with the
Commission, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary
to
4
make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(g) The Pricing
Disclosure Package did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the 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 Representative by or on behalf
of any Underwriter specifically for inclusion therein, which
information is specified in Section 8(e).
(h) Each Issuer
Free Writing Prospectus (including, without limitation, any road
show that is a free writing prospectus under Rule 433), when
considered together with the Pricing Disclosure Package as of the
Applicable Time, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
(i) Each Issuer
Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules
and Regulations on the date of first use, and the Company has
complied with any filing requirements applicable to such Issuer
Free Writing Prospectus pursuant to the Rules and Regulations. The
Company has not made any offer relating to the Stock that would
constitute an Issuer Free Writing Prospectus without the prior
written consent of the Representative (such consent not to be
unreasonably delayed or withheld). The Company has retained in
accordance with the Rules and Regulations all Issuer Free Writing
Prospectuses that were not required to be filed pursuant to the
Rules and Regulations.
(j) Each of the
Company and its Significant Subsidiaries (as defined below) has
been duly incorporated, organized or formed and is validly existing
in good standing under the laws of the jurisdiction of its
incorporation, organization or formation, with full power and
authority to own, lease and operate its properties and conduct its
business; and each of the Company and its Significant Subsidiaries
is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business conducted by it
or the location of the properties owned, leased or operated by it
make such qualification necessary, except where the failure to be
so qualified or in good standing would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), results of operations or
business of the Company and its subsidiaries taken as a whole or on
the performance by the Company of this Agreement (a “
Material Adverse Effect ” ). The Company does not
have any subsidiaries or control, directly or indirectly, any
corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Company’s
Annual Report on Form 10-K for the most recent fiscal year. None of
the subsidiaries of the Company (other than the Significant
Subsidiaries) is a “significant subsidiary” (as defined
in Rule 405).
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(k) The
authorized, issued and outstanding Class A Common Stock,
Class B common stock, par value $0.01 per share (the
“ Class B Common Stock ” ), and
other capital stock of the Company is as set forth in each of the
most recent Preliminary Prospectus and the Prospectus (except for
subsequent issuances, if any, of Class A Common Stock or
Class B Common Stock pursuant to employee or director stock
option or stock purchase plans or pursuant to the exercise of
options referred to in the most recent Preliminary Prospectus and
the Prospectus). The shares of issued and outstanding Class A
Common Stock and Class B Common Stock have been duly
authorized and validly issued and are fully paid and
non-assessable, conform to the descriptions thereof contained in
the most recent Preliminary Prospectus and the Prospectus and were
issued in compliance with federal and state securities laws; none
of the outstanding shares of Class A Common Stock or
Class B Common Stock was issued in violation of any preemptive
rights, resale rights, rights of first refusal or other similar
rights; and no capital stock of the Company is outstanding other
than shares of Class A Common Stock and Class B Common
Stock. All of the Company’s options, warrants and other
rights to purchase or exchange any securities for shares of
Class A Common Stock, Class B Common Stock or other
capital stock have been duly authorized and validly issued, conform
to the description thereof contained in the most recent Preliminary
Prospectus and the Prospectus and were issued in compliance with
federal and state securities laws. All of the outstanding shares of
capital stock of each Significant Subsidiary of the Company that is
a corporation have been duly authorized and validly issued and are
fully paid and non-assessable. All of the outstanding shares of
capital stock, partnership interests or other ownership interests
of each Significant Subsidiary of the Company are owned directly or
indirectly by the Company, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or
transfer, preemptive rights or any other claim of any third party
(collectively, “ Liens ” ), except such
Liens as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(l) The shares of
the Stock to be issued and sold by the Company to the Underwriters
hereunder have been duly authorized and, upon payment and delivery
in accordance with this Agreement, will be validly issued, fully
paid and non-assessable, will conform to the description thereof
contained in the most recent Preliminary Prospectus and the
Prospectus, will be issued in compliance with federal and state
securities laws and will be free of statutory and contractual
preemptive rights, rights of first refusal and similar
rights.
(m) The Company
has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement. This Agreement
has been duly and validly authorized, executed and delivered by the
Company.
(n) None of the
execution, delivery and performance of this Agreement by the
Company, the issuance, sale and delivery of the Stock by the
Company, compliance by the Company with any of the provisions of
this Agreement nor the application of the proceeds from the sale of
the Stock as described under “Use of Proceeds” in the
most recent Preliminary Prospectus and the Prospectus will
(i) conflict with or result in a breach or violation of any
agreement, indenture or other instrument to which the
6
Company or any
of its subsidiaries is a party or by which any of them is bound, or
to which any of their properties is subject; (ii) result in
the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or any of its
subsidiaries; (iii) result in a breach or violation of, or
constitute a default under, the certificate of incorporation,
by-laws, partnership agreement or other organizational documents of
the Company or any of its subsidiaries; or (iv) violate any
law, rule, administrative regulation or decree of any court or any
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their respective properties,
except, with respect to clauses (i), (ii) and (iv), conflicts
or violations that would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
(o) No permit,
consent, approval, authorization or order of any court,
governmental agency or body or financial institution is required
for the issue and sale of the Stock, the execution, delivery and
performance of this Agreement by the Company, or the application of
the proceeds from the sale of the Stock as described under
“Use of Proceeds” in the most recent Preliminary
Prospectus and the Prospectus, except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, orders, filings, registrations or qualifications as
may be required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and sale of
the Stock through the Underwriters.
(p) 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 registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(q) The Company
has not sold or issued any securities that would be integrated with
the offering of the Stock contemplated by this Agreement pursuant
to the Securities Act, the Rules and Regulations or the
interpretations thereof by the Commission.
(r) Since the date
of the latest audited financial statements included or incorporated
by reference in the most recent Preliminary Prospectus, neither the
Company nor any of its subsidiaries has (i) sustained any loss
or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
(ii) issued or granted any securities (other than (A) the
Stock and (B) shares of capital stock issued pursuant to
employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof or pursuant
to currently outstanding options, warrants or rights not issued
under one of those plans), (iii) incurred any material
liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary
course of business, (iv) entered into any material transaction
not in the ordinary course of business, or (v) declared or
paid any dividend on its capital
7
stock (other
than regular cash dividends on the Class A Common Stock or the
Company’s Class B Common Stock), 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 adverse
change, or any development involving a prospective adverse change,
in or affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company and its
subsidiaries taken as a whole, in each case in this paragraph (r)
(except clause (v) hereof) as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(s) The financial
statements (including the related notes and supporting schedules)
included or incorporated by reference in the most recent
Preliminary Prospectus and the Prospectus present fairly in all
material respects the financial condition, results of operations
and cash flows of the entities purported to be shown thereby at the
dates and for the periods indicated (subject to year-end
adjustments in the case of unaudited interim financial statements)
and have been prepared in accordance with U.S. generally accepted
accounting principles applied on a consistent basis throughout the
periods indicated and conform in all material respects with such
generally accepted accounting principles, except as otherwise noted
therein; and the supporting schedules included or incorporated by
reference in the Registration Statement present fairly in all
material respects the information required to be stated
therein.
(t) Any pro forma
financial statements that may be included or incorporated by
reference in the most recent Preliminary Prospectus or the
Prospectus include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the
pro forma adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the
pro forma financial statements included or incorporated by
reference in the most recent Preliminary Prospectus or the
Prospectus, as the case may be. Any pro forma financial statements
included or incorporated by reference in the most recent
Preliminary Prospectus or the Prospectus comply as to form in all
material respects with the applicable requirements of
Regulation S-X under the Act.
(u) Ernst &
Young LLP, who have reported on certain financial statements of the
Company included in the most recent Preliminary Prospectus and the
Prospectus and whose report appears in the most recent Preliminary
Prospectus and the Prospectus or is incorporated by reference
therein, are independent public accountants as required by the
Securities Act and the rules and regulations thereunder, and were
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 or
incorporated by reference in the most recent Preliminary Prospectus
and the Prospectus.
(v) The
statistical and market-related data, if any, included in the most
recent Preliminary Prospectus and the Prospectus and the
consolidated financial statements of the Company and its
subsidiaries included or incorporated by reference in the most
recent
8
Preliminary
Prospectus and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate in all
material respects.
(w) Neither the
Company nor any subsidiary is, and as of the applicable Delivery
Date and, after giving effect to the offer and sale of the Stock
and the application of the proceeds therefrom as described under
“Use of Proceeds” in the most recent Preliminary
Prospectus and the Prospectus, none of them will be, (i) an
“investment company” within the meaning of such term
under the Investment Company Act of 1940, as amended (the “
Investment Company Act ”), and the rules and
regulations of the Commission thereunder or (ii) a
“business development company” (as defined in
Section 2(a)(48) of the Investment Company Act).
(x) There is no
litigation or governmental proceeding to which the Company or any
of its subsidiaries is a party or to which any property or assets
of the Company or any of its subsidiaries is subject or which is
pending or, to the knowledge of the Company, contemplated or
threatened against the Company or any of its subsidiaries that
would, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
(y) There are no
statutes or regulations, legal or governmental proceedings or
contracts or other documents that would be required to be described
in the Registration Statement, the most recent Preliminary
Prospectus or the Prospectus (in each case including, without
limitation, the documents incorporated by reference therein) or, in
the case of documents, to be filed as exhibits to the Registration
Statement, that are not described and filed as required.
(z) To the
knowledge of the Company, after due inquiry, no labor disturbance
by or dispute with the employees of the Company or any of its
subsidiaries exists or is imminent that would reasonably be
expected to have a Material Adverse Effect.
(aa)
(i) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect,
(i) each “employee benefit plan” (within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ ERISA
” )) for which the Company or any of its subsidiaries
would have any liability, including, but not limited to, any
liability relating to the Company or any of its subsidiaries being
a member of a “Controlled Group” (defined as any
organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended (the “ Code
” ) (each, a “ Plan ” )), has
been maintained in compliance with its terms and with the
requirements of all applicable statutes, rules and regulations
including ERISA and the Code; (ii) no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of
the Code, has occurred with respect to any Plan excluding
transactions effected pursuant to a statutory or administrative
exemption; (iii) with respect to each Plan subject to Title IV
of ERISA (A) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably
expected to occur, (B) there has been no failure to satisfy the
minimum funding standard under Section 302 of ERISA or
Section 412 of the Code and (C) neither the Company or
any member of its Controlled Group has incurred, or
9
reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the Pension Benefit
Guaranty Corporation in the ordinary course and without default) in
respect of a Plan (including a “multiemployer plan”,
within the meaning of Section 4001(c)(3) of ERISA); and
(iv) each Plan that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred,
whether by action or by failure to act, which would cause the loss
of such qualification.
(bb) The Company
and each of its subsidiaries have filed all Federal and all
material state, local and foreign tax returns required to be filed
through the date hereof, subject to permitted extensions, which
returns are complete and correct in all material respects, and have
paid all taxes due, and neither the Company nor any subsidiary is
in default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto, except for
any such taxes or assessments which are being contested in good
faith by appropriate proceedings and for which appropriate
reserves, if any, have been established in accordance with U.S.
generally accepted accounting principles and statutory accounting
principles, and no tax deficiency has been determined adversely to
the Company or any of its subsidiaries, nor does the Company have
any knowledge of any tax deficiencies that have been, or could
reasonably be expected to be, asserted against the Company that
would, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(cc) Neither the
Company nor any of its subsidiaries (i) is in violation of its
certificate of incorporation or by-laws or other organizational
documents, (ii) is in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term,
covenant or condition contained in any 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 of
any law, ordinance, rule, regulation or order of any court or
governmental agency or body having jurisdiction over it or its
property or assets, except in the case of clauses (ii) and
(iii), to the extent any such conflict, breach, violation or
default would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(dd) The Company
and, to the knowledge of the Company, its officers and directors
are in compliance in all material respects with the Sarbanes-Oxley
Act of 2002 and the rules and regulations promulgated in connection
therewith.
(ee) Each of the
Company and its subsidiaries hold such permits, licenses, patents,
franchises, certificates of need, authorities and other approvals
or authorizations from governmental or regulatory authorities
(including, without limitation, insurance licenses from the
insurance regulatory agencies of the various states where it
conducts business (the “ Insurance Licenses
” )) (collectively, the “ Permits
” ) which are necessary under applicable law (i) to
the conduct of its insurance businesses as presently operated and
(ii) to own its properties and conduct its businesses in the
manner described in the most recent Preliminary Prospectus and the
Prospectus; each of the Company and its subsidiaries has fulfilled
and performed all of its obligations necessary to maintain the
Permits; there is no past, pending or, to the knowledge of the
Company or any of its
10
subsidiaries,
threatened action, suit, proceeding or investigation that may
reasonably be expected to lead to the revocation, termination or
suspension of any Permit (including, without limitation, the
Insurance Licenses); except, in each of the foregoing cases, as to
Insurance Licenses, the failure of which to obtain or maintain
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and no insurance regulatory
agency or body has issued any order or decree (specifically
applicable to one or more of the Insurance Subsidiaries (as defined
below) as opposed to insurance companies generally) impairing,
restricting or prohibiting the payment of dividends by any of the
Company’s subsidiaries to their respective parent companies.
Neither the Company nor any of its subsidiaries has received notice
of any revocation or modification of any such Permits or has any
reason to believe that any such Permits will not be renewed in the
ordinary course.
(ff) The Company
and its subsidiaries own or possess, or have the ability to
acquire, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by them in connection with the business now
operated by them, except where the failure to own, possess or have
the ability to acquire such patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names would not, individually or in the aggregate, have a
Material Adverse Effect, and none of the Company nor its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, individually or in the aggregate, if subject to any
unfavorable decision, ruling or finding, would have a Material
Adverse Effect.
(gg) The Company
and its subsidiaries (i) are in compliance with any and all
applicable foreign, Federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants ( “ Environmental Laws ”
), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) are in compliance with
all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, individually or in the aggregate, have a
Material Adverse Effect.
(hh) Neither the
Company nor any of its subsidiaries, nor, to the knowledge of the
Company, any director, officer, agent, employee or other person
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 U.S. Foreign Corrupt Practices Act of 1977; or
(iv) made any bribe or other unlawful payment.
11
(ii) The
operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
applicable governmental agency (collectively, the “
Money Laundering Laws ” ) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
(jj) Neither the
Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the
Company or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department ( “ OFAC ”
); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by
OFAC.
(kk) The Company
has not distributed and, prior to the later to occur of any
Delivery Date and completion of the distribution of the Stock, will
not distribute any offering material in connection with the
offering and sale of the Stock other than any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to
which the Representative has consented in accordance with Section
1(i) or 5(a)(vi) (such consent not to be unreasonably withheld or
delayed).
(ll) The Company
has not taken and will not take, directly or indirectly, any action
designed to or that has constituted or that could reasonably be
expected to cause or result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the shares of the Stock.
(mm) The Stock has
been approved for listing, subject to official notice of issuance,
on the New York Stock Exchange (the “ Exchange
” ).
(nn) The Company
and its subsidiaries maintain systems of internal control over
financial reporting (as such term is defined in Rule 13a-15(f)
of the Exchange Act) that have been designed by, or under the
supervision of, their respective principal executive and principal
financial officers, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally
accepted accounting principles and statutory accounting principles.
The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S.
generally accepted accounting principles and statutory accounting
practices and to maintain accountability for assets;
(iii) access to assets is permitted only
12
in accordance
with management’s general or specific authorization and
(iv) recorded assets are compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
(oo) The Company
and its subsidiaries have established and maintain disclosure
controls and procedures (as such term is defined in
Rule 13a-15(e) under the Exchange Act) that have been designed
to ensure that material information relating to the Company and its
subsidiaries required to be disclosed in the reports the Company
files or submits under the Exchange Act is made known to the
Company’s principal executive officer and principal financial
officer by others within those entities; and such disclosure
controls and procedures are effective in all material respects to
perform the functions for which they were established.
(pp) Since the
date of the latest audited financial statements incorporated by
reference in the most recent Preliminary Prospectus, (i) the
Company has not been advised of 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) there have been no significant changes
in internal controls or in other factors that would significantly
affect internal controls, including any corrective actions with
regard to significant deficiencies and material
weaknesses.
(qq) The Company
and each of its subsidiaries have 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 where the failure to have
such good and marketable title or the existence of any such liens,
encumbrances or defects would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. All assets held under lease by the Company and 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 assets
by the Company and its subsidiaries, except where the failure of
any such leases to be valid, subsisting or enforceable or the
existence of such exceptions would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(rr) The Company
is not required to be licensed as an insurance company; Reliance
Standard Life Insurance Company of Texas ( “
RSLIC-Texas ” ), Reliance Standard Life Insurance
Company ( “ RSLIC ” ), First Reliance
Standard Life Insurance Company ( “ FRSLIC
” ), Safety First Insurance Company ( “
SFIC ” ) and Safety National Casualty Corporation
( “ SNCC ” ; RSLIC-Texas, RSLIC, FRSLIC,
SFIC and SNCC are herein called, collectively, the “
Insurance Subsidiaries ” , and RSLIC-Texas, RSLIC,
SNCC and SIG Holdings, Inc. are herein called, collectively, the
“ Significant Subsidiaries ” ) are each
duly licensed as insurers under the insurance laws and regulations
of Texas, Illinois, New York, Illinois and Missouri, respectively;
and
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