exv10w1






Exhibit 10.1






Execution Copy




DELPHI FINANCIAL GROUP, INC.




3,000,000 Shares




Class A Common Stock




UNDERWRITING AGREEMENT




August 18, 2009




Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019



Ladies and Gentlemen:




          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









 



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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









 



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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









 



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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









 



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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









 



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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









 



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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









 



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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.









 



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     (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 the
Insurance Subsidiaries have filed with the appropriate insurance regulatory authorities all
reports, documents and other information required to be filed under the insurance laws of
Texas, Illinois, New York, Illinois and Missouri, respectively, except as to filings the









 



13



failure of which to make would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.




     (ss) All reinsurance ceded treaties, contracts, agreements and arrangements to which
the Company or any of the Insurance Subsidiaries is a party are in full force and effect,
other than those that, by their terms, have expired or otherwise terminated, or those the
failure of which to be in full force and effect would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and none of the Company or any of
its Insurance Subsidiaries is in violation of, or in default in the performance, observance
or fulfillment of, any material obligation agreement, covenant or condition contained
therein, which violation or default would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; none of the Company or any of its Insurance
Subsidiaries has received any notice from any of the other parties to such treaties,
policies, contracts, agreements or arrangements that such other party intends not to perform
in any material respect such treaty, contract, agreements or arrangements or will be unable
to perform such treaty, contract, agreement or arrangement where the failure to perform
would, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.




     (tt) The statutory annual and quarterly statements of each of the Insurance
Subsidiaries and the statutory balance sheets and income statements included in such
statutory annual and quarterly statements most recently filed in any state have been
prepared in conformity with required or permitted statutory accounting principles or
practices consistently followed, except as may otherwise be indicated in the notes thereto,
and present fairly in all material respects the statutory financial position of each
Insurance Subsidiary as at the dates thereof, and on a statutory basis for the periods
covered thereby.




     (uu) The Company and each of its subsidiaries carry, or are covered by, liability
insurance and insurance against physical damage to their properties from insurers of
recognized financial responsibility in such amounts and covering such risks as the Company
believes to be adequate for the conduct of the business of the Company and its subsidiaries,
taken as a whole. Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (i) the Company and its subsidiaries are in
compliance with the terms of such policies in all material respects; (ii) neither the
Company nor any of its subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or necessary to be made
in order to continue such insurance; and (iii) there are no claims by the Company or any of
its subsidiaries under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause.




     (vv) No relationship, direct or indirect, exists between or among the Company, on the
one hand, and the directors, officers, stockholders, customers or suppliers of the Company,
on the other hand, that is required to be described in the most recent Preliminary
Prospectus or the Prospectus which is not so described.









 



14



     (ww) The statements set forth in the most recent Preliminary Prospectus and the
Prospectus under the captions “Description of Common Stock,” “Description of Preferred
Stock,” and “Dividend Policy,” insofar as they purport to describe the Class A Common Stock,
Class B Common Stock or the Company’s preferred stock, provisions of the Company’s charter
or bylaws or the provisions of the laws, regulations and other documents and legal matters
referred to therein, are accurate in all material respects.




     (xx) 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.




     (yy) Neither the Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any person (other than this Agreement) that would give rise
to a valid claim against any of them or the Underwriters for a brokerage commission,
finder’s fee or like payment in connection with the offering and sale of the Stock.




     (zz) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any of its affiliates has taken, directly or indirectly, any action designed to or
that has constituted or that would reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company in connection with
the offering of the shares of the Stock; and, without limitation to the foregoing, neither
the Company nor any of its subsidiaries has, on or after the date of this Agreement,
purchased any Class A Common Stock or any other capital stock of the Company pursuant to the
Company’s previously announced share repurchase program or any similar program.




     (aaa) Neither the Company nor any subsidiary is in violation of or has received notice
of any violation with respect to any federal or state law relating to discrimination in the
hiring, promotion or pay of employees, any applicable federal or state wage and hour laws,
or any state law precluding the denial of credit due to the neighborhood in which a property
is situated, the violation of any of which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Affect.




     (bbb) The Class A Common Stock is an “actively-traded security” exempted from the
requirements of Rule 101 of Regulation M under the Exchange Act by subsection (c)(1) of such
rule.




     (ccc) None of the proceeds from the sale of the Stock has been or will be paid to the
Underwriters (except for the payment of the commissions pursuant to this Agreement) or, to
the knowledge of the Company, to any affiliate of the Underwriters; and the Company is not
an “affiliate” (as defined in NASD Conduct Rule 2720) of any member of the Financial
Industry Regulatory Authority (“FINRA”).









 



15


          Any certificate signed by any officer of the Company and delivered to the Representative or
counsel for the Underwriters in connection with the offering of the Stock shall be deemed a
representation and warranty by the Company to each Underwriter as to matters covered thereby.



          2. Purchase of the Stock by the Underwriters. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this Agreement, the Company
agrees to sell 3,000,000 shares of the Firm Stock to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares of the Firm Stock
set forth opposite that Underwriter’s name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representative may determine.



          In addition, the Company grants to the Underwriters an option to purchase up to 450,000
additional shares of Option Stock. Such option is exercisable in the event that the Underwriters
sell more shares of Common Stock than the number of shares of Firm Stock in the offering and in
accordance with the procedures set forth in Section 4 hereof. Each Underwriter agrees, severally
and not jointly, to purchase the number of shares of Option Stock (subject to such adjustments to
eliminate fractional shares as the Representative may determine) that bears the same proportion to
the total number of shares of Option Stock to be sold on such Delivery Date as the number of shares
of Firm Stock set forth in Schedule 1 hereto opposite the name of such Underwriter bears to
the total number of shares of Firm Stock.



          The price of both the Firm Stock and any Option Stock purchased by the Underwriters shall be
$20.32 per share; provided that the purchase price for any Option Stock to be delivered on the
applicable Delivery Date shall be reduced by an amount per share equal to any dividends or
distributions paid or payable on the Firm Stock but not payable on such Option Stock.



          The Company shall not be obligated to deliver any of the Firm Stock or Option Stock to be
delivered on the applicable Delivery Date, except upon payment for all such Stock to be purchased
on such Delivery Date as provided herein.



          3. Offering of Stock by the Underwriters. Upon authorization by the Representative of the
release of the Firm Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions to be set forth in the Prospectus.



          4. Delivery of and Payment for the Stock. Delivery of and payment for the Firm Stock shall be
made at 10:00 A.M., New York City time, on August 21, 2009 or at such other date or place as shall be
determined by agreement between the Representative and the Company. This date and time are
sometimes referred to as the “Initial Delivery Date.” Delivery of the Firm Stock shall be made to
the Representative for the account of each Underwriter against payment by the several Underwriters
through the Representative  of the respective aggregate purchase prices of the Firm Stock being
sold by the Company  by wire transfer in immediately available funds to the
accounts specified by the Company. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further









 



16



condition of the obligation of each Underwriter hereunder. The Company shall deliver the Firm
Stock through the facilities of the Depository Trust Company (“DTC”) unless the Representative shall otherwise instruct.



          The option granted in Section 2 will expire 30 days after the date of this Agreement and may
be exercised in whole or from time to time in part by written notice being given to the Company by
the Representative; provided that if such date falls on a day that is not a business day, the
option granted in Section 2 will expire on the next succeeding business day. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is being exercised, the
names in which the shares of Option Stock are to be registered, the denominations in which the
shares of Option Stock are to be issued and the date and time, as determined by the Representative,
when the shares of Option Stock are to be delivered; provided, however, that this date and time
shall not be earlier than the Initial Delivery Date nor earlier than the second business day after
the date on which the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. Each date and time the shares of Option
Stock are delivered is sometimes referred to as an “Option Stock Delivery Date,” and the Initial
Delivery Date and any Option Stock Delivery Date are sometimes each referred to as a “Delivery
Date.”



          Delivery of the Option Stock by the Company and payment for the Option Stock by the several
Underwriters through the Representative shall be made at 10:00 A.M., New York City time, on the
date specified in the corresponding notice described in the preceding paragraph or at such other
date or place as shall be determined by agreement between the Representative and the Company. On
the Option Stock Delivery Date, the Company shall deliver or cause to be delivered the Option
Stock to the Representative for the account of each Underwriter against payment by the several
Underwriters through the Representative  of the respective aggregate purchase prices of the
Option Stock being sold by the Company to or upon the order of the Company
by wire transfer in immediately available funds to the accounts specified by the Company. Time
shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is
a further condition of the obligation of each Underwriter hereunder. The Company shall deliver the
Option Stock through the facilities of DTC unless the Representative shall otherwise instruct.



          5. Further Agreements of the Company and the Underwriters. (a) The Company agrees:




     (i) To prepare the Prospectus in a form approved by the Representative and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s
close of business on the second business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the Registration Statement or
the Prospectus prior to the last Delivery Date except as provided herein; to advise the
Representative, promptly after it receives notice thereof, of the time when any amendment or
supplement to the Registration Statement or the Prospectus has been filed and to furnish the
Representative with copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Stock; to









 



17



advise the Representative, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or suspending the use of the
Prospectus or any Issuer Free Writing Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding or examination for any such purpose, of any notice from the Commission objecting
to the use of the form of the Registration Statement or any post-effective amendment thereto
or of any request by the Commission for the amending or supplementing of the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order preventing
or suspending the use of the Prospectus or any Issuer Free Writing Prospectus or suspending
any such qualification, to use promptly its reasonable best efforts to obtain its
withdrawal;




     (ii) To pay the applicable Commission filing fees relating to the Stock within the time
required by Rule 456(b)(1) without regard to the proviso therein;




     (iii) To deliver promptly to the Representative such number of the following documents
as the Representative shall reasonably request: (A) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement and the computation of per share earnings), (B)
each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus, (C)
each Issuer Free Writing Prospectus and (D) any document incorporated by reference in any
Preliminary Prospectus or the Prospectus; and, if the delivery of a prospectus is required
at any time after the date hereof in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any events shall have occurred as
a result of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Representative and, upon its request, to file such
document and to prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representative may from time to time reasonably request of
an amended or supplemented Prospectus that will correct such statement or omission or effect
such compliance;




     (iv) To file promptly with the Commission any amendment or supplement to the
Registration Statement or the Prospectus that may, in the judgment of the Company or the
Representative, be required by the Securities Act or requested by the Commission;




     (v) Prior to filing with the Commission any amendment or supplement to the Registration
Statement or the Prospectus, any document incorporated by reference in the Prospectus or any
amendment to any document incorporated by reference in the Prospectus, to furnish a copy
thereof to the Representative and counsel for the Underwriters and obtain the consent of the
Representative to the filing (such consent not to be unreasonably delayed or withheld);




 











 





18




     (vi) Not to make 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).




     (vii) To comply with all applicable requirements of Rule 433 with respect to any Issuer
Free Writing Prospectus; and if at any time after the date hereof any events shall have
occurred as a result of which any Issuer Free Writing Prospectus, as then amended or
supplemented, would conflict with the information in the Registration Statement, the most
recent Preliminary Prospectus or the Prospectus or would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or,
if for any other reason it shall be necessary to amend or supplement any Issuer Free Writing
Prospectus, to notify the Representative and, upon its request, to file such document and to
prepare and furnish without charge to each Underwriter as many copies as the Representative
may from time to time reasonably request of an amended or supplemented Issuer Free Writing
Prospectus that will correct such conflict, statement or omission or effect such compliance;




     (viii) As soon as practicable after the Effective Date and in any event not later than
16 months after the date hereof, to make generally available to the Company’s security
holders and to deliver to the Representative an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations;




     (ix) Promptly from time to time to take such action as the Underwriters may reasonably
request to qualify the Stock for offering and sale under the securities or Blue Sky laws of
Canada and such other jurisdictions as the Underwriters may reasonably request, and to
maintain such qualifications in effect for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the Company shall not be
required to (i) qualify as a foreign corporation in any jurisdiction in which it would not
otherwise be required to so qualify, (ii) file a general consent to service of process in
any such jurisdiction or (iii) subject itself to taxation in any jurisdiction in which it
would not otherwise be subject.




     (x) For a period commencing on the date hereof and ending on the 60th day after the
date of the Prospectus (the “Lock-Up Period”), not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at any time in
the future of) any shares of Class A Common Stock or Class B Common Stock (collectively, the
“Common Stock”) or securities convertible into or exercisable or exchangeable for Common
Stock (other than the Stock and shares issued pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans existing on the date hereof), or
sell or grant options, rights or warrants with respect to any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock (other than the
grant of options pursuant to option plans existing on the date hereof), (2) enter into any
swap or other derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of









 



19



ownership of any shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, (3) file or cause to be filed a registration statement, including any
amendments, with respect to the registration of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock or any other securities of
the Company or (4) publicly disclose the intention to do any of the foregoing, in each case
without the prior written consent of Barclays Capital Inc. on behalf of the Underwriters,
and to cause each officer, director and stockholder of the Company set forth on Schedule
3 hereto to furnish to the Representative, prior to the Initial Delivery Date, a letter
or letters, each dated on or prior to the date of this Agreement, substantially in the form of Exhibit A hereto (the “Lock-Up
Agreements”).




     (xi) To apply the net proceeds from the sale of the Stock being sold by the Company as
set forth in the Preliminary Prospectus and the Prospectus;



          (b) Each Underwriter severally agrees that such Underwriter shall not include any “issuer
information” (as defined in Rule 433) in any “free writing prospectus” (as defined in Rule 405)
used or referred to by such Underwriter without the prior consent of the Company (any such issuer
information with respect to whose use the Company has given its consent, “Permitted Issuer
Information”); provided that (i) no such consent shall be required with respect to any such issuer
information contained in any document filed by the Company with the Commission prior to the use of
such free writing prospectus and (ii) “issuer information,” as used in this Section 5(b), shall not
be deemed to include information prepared by or on behalf of such Underwriter on the basis of or
derived from issuer information.




          6. Expenses. The Company agrees, whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees and
taxes incurred by the Company and, to the extent expressly provided in this Section 6 and in
Sections 8 and 10, incurred by the Underwriters incident to and in connection with (a) the
authorization, issuance, sale and delivery of the Stock and any stamp duties or other taxes payable
in that connection, and the preparation and printing of certificates for the Stock; (b) the
preparation, printing and filing under the Securities Act of the Registration Statement (including
any exhibits thereto), any Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus and any amendment or supplement thereto; (c) the distribution of the Registration
Statement (including any exhibits thereto), any Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus and any amendment or supplement thereto, or any document incorporated by
reference therein, all as provided in this Agreement; (d) the production and distribution of this
Agreement and any other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) any required review by FINRA of the terms of sale of the Stock (including related reasonable and reasonably documented
fees and expenses of counsel to the Underwriters); (f) the listing of the Stock on the New York
Stock Exchange; (g) the qualification of the Stock under the securities laws of the several
jurisdictions as provided in Section 5(a)(ix) and the preparation, printing and distribution of a
Blue Sky Memorandum (including related reasonable and reasonably documented fees and expenses of
counsel to the Underwriters not to exceed $5,000); (h) the preparation, printing and distribution
of one or more versions of the Preliminary Prospectus and the Prospectus for distribution in
Canada, often in the form of a Canadian










 



20



“wrapper”; (i) the investor presentations on any “road show” undertaken in connection with the
marketing of the Stock, including, without limitation, expenses associated with any electronic
roadshow, travel and lodging expenses of the representatives and officers of the Company and the
cost of any aircraft chartered in connection with the road show; and (j) all other costs and
expenses incident to the performance of the obligations of the Company under this Agreement;
provided that, except as expressly provided in this Section 6 and in Sections 8 and 10, the
Underwriters shall pay their own costs and expenses, including the costs and expenses of their
counsel, any transfer taxes on the Stock which they may sell and the expenses of advertising any
offering of the Stock made by the Underwriters.




          7. Conditions of Underwriters’ Obligations. The respective obligations of the Underwriters
hereunder are subject to the accuracy, when made and on the date of the Prospectus and on each
Delivery Date, of the representations and warranties of the Company contained herein, to the
performance by the Company of its obligations hereunder, and to each of the following additional
terms and conditions:





     (a) The Prospectus shall have been timely filed with the Commission in accordance with
Section 5(a)(i); the Company shall have complied with all filing requirements applicable to
any Issuer Free Writing Prospectus used or referred to after the date hereof; no stop order
suspending the effectiveness of the Registration Statement or preventing or suspending the
use of the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no
proceeding or examination for such purpose shall have been initiated or threatened by the
Commission; any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or any document incorporated by reference therein
or otherwise shall have been complied with; and the Commission shall not have notified the
Company of any objection to the use of the form of the Registration Statement.




     (b) No Underwriter shall have discovered and disclosed to the Company on or prior to
such Delivery Date that the Registration Statement, the Prospectus or the Pricing Disclosure
Package, or any amendment or supplement thereto, contains an untrue statement of a fact
which, in the reasonable opinion of Sidley Austin LLP, counsel for the Underwriters, is
material or omits to state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements therein not misleading.




     (c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Stock, the Registration Statement, the Prospectus
and any Issuer Free Writing Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may reasonably request to enable them
to pass upon such matters.




     (d) Cahill Gordon & Reindel LLP shall have furnished to the Underwriters its written
opinion and letter, as counsel to the Company, addressed to the Underwriters and delivered
and dated such Delivery Date, in form and substance reasonably satisfactory to









 



21



the Underwriters, substantially in the forms attached hereto as Exhibit B-1 and Exhibit
B-2.




     (e) Chad W. Coulter, Esq., General Counsel of the Company and Jeffrey Otto, Esq.,
General Counsel of Safety National Casualty Corporation, as applicable, shall have furnished
their written opinions addressed to the Underwriters and delivered and dated such Delivery
Date, in form and substance reasonably satisfactory to the Underwriters, substantially in
the form attached hereto as Exhibit B-3.




     (f) The Representative shall have received from Sidley Austin LLP, counsel for the
Underwriters, such opinion or opinions, dated such Delivery Date, with respect to the
issuance and sale of the Stock, the Registration Statement, the Prospectus and the Pricing
Disclosure Package and other related matters as the Representative may reasonably require,
and the Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.




     (g) At the time of execution of this Agreement, the Representative shall have received
from Ernst & Young LLP a letter, in form and substance reasonably satisfactory to the
Representatives, addressed to the Underwriters and dated the date hereof (i) confirming that
they are independent public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since the respective dates as
of which specified financial information is given in the most recent Preliminary Prospectus,
as of a date not more than three days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other matters ordinarily
covered by accountants’ “comfort letters” to underwriters in connection with registered
public offerings.




     (h) With respect to the letter of Ernst & Young LLP referred to in the preceding
paragraph and delivered to the Representative concurrently with the execution of this
Agreement (the “initial letter”), the Company shall have furnished to the Representative a
letter (the “bring-down letter”) of such accountants, addressed to the Underwriters and
dated such Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than three days
prior to the date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the initial letter, (iii)
covering financial information in the Prospectus and (iv) confirming in all material
respects the conclusions and findings set forth in the initial letter.









 



22



     (i) The Company shall have furnished to the Representative a certificate, dated such
Delivery Date, of any two of its Chief Executive Officer, President, Executive Vice
President, Vice President-Finance, General Counsel or Treasurer to the effect that:




     (A) The representations and warranties of the Company in Section 1 are true and
correct on and as of such Delivery Date, and the Company has complied in all
material respects with all its agreements contained herein and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such
Delivery Date;




     (B) No stop order suspending the effectiveness of the Registration Statement
has been issued; no proceedings or examination for that purpose have been instituted
or, to the knowledge of such officers, threatened; and the Commission has not
notified the Company of any objection to the use of the form of the Registration
Statement or any post-effective amendment thereto; and




     (C) They have examined the Registration Statement, the Prospectus and the
Pricing Disclosure Package, and, in their opinion, (A) (1) the Registration
Statement, as of each Effective Date, (2) the Prospectus, as of the date of the
Prospectus Supplement and as of such Delivery Date, and (3) the Pricing Disclosure
Package, as of the Applicable Time and as of such Delivery Date, did not and do not
contain any untrue statement of a material fact and did not and do not omit to state
a material fact required to be stated therein or necessary to make the statements
therein (except in the case of the Registration Statement, in the light of the
circumstances under which they were made) not misleading, and (B) no event has
occurred that should have been set forth in a supplement or amendment to the
Registration Statement, the Prospectus or any Issuer Free Writing Prospectus that
has not been so set forth.




     (j) Except as described in the most recent Preliminary Prospectus and the Prospectus,
(i) neither the Company nor any of its subsidiaries shall have sustained, since the date of
the latest audited financial statements included or incorporated by reference in the most
recent Preliminary Prospectus, 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 or (ii) since such date there shall
not have been any change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), results of operations, stockholders’
equity, business or prospects of the Company and its subsidiaries taken as a whole, the
effect of which, in any such case described in clause (i) or (ii), is, individually or in
the aggregate, in the judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or sale of the Stock being
delivered on such Delivery Date on the terms and in the manner contemplated in the
Prospectus.




     (k) Subsequent to the execution and delivery of this Agreement, no downgrade in the
rating of the Company or any of its Insurance Subsidiaries or their









 



23



respective financial strength or claims paying ability or the rating of any of the
Company’s securities by A.M. Best Company, Inc. (“A.M. Best”) or by any other “nationally
recognized statistical rating organization”, as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act (together with A.M. Best, the “Rating
Agencies”) shall have occurred or be pending.




     (l) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange or the NASDAQ National Market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or materially limited
or the settlement of such trading generally shall have been materially disrupted or minimum
prices shall have been established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority having jurisdiction,
(ii) a general moratorium on commercial banking activities shall have been declared by
federal or New York state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the United States
or there shall have been a declaration of a national emergency or war by the United States
or (iv) there shall have occurred such a material adverse change in general economic,
political or financial conditions, including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions on the financial
markets in the United States shall be such), as to make it, in the judgment of the
Representative, impracticable or inadvisable to proceed with the offering or sale of the
Stock being delivered on such Delivery Date on the terms and in the manner contemplated in
the Prospectus.




     (m) The New York Stock Exchange shall have approved the Stock for listing, subject only
to official notice of issuance.




     (n) The Lock-Up Agreements between the Representative and the officers, directors and
stockholders of the Company set forth on Schedule 3, delivered to the Representative
shall be in full force and effect on such Delivery Date.



          All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.





     8. Indemnification and Contribution.




     (a) The Company shall indemnify and hold harmless each Underwriter, its directors,
officers and employees and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales of Stock),
to which that Underwriter or that affiliate, director, officer, employee or controlling
person may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in (A) any Preliminary









 



24



Prospectus, the Registration Statement, the Prospectus or in any amendment or
supplement thereto, (B) any Issuer Free Writing Prospectus or in any amendment or supplement
thereto or (C) any Permitted Issuer Information used or referred to in any “free writing
prospectus” (as defined in Rule 405) used or referred to by any Underwriter, or (D) any
“road show” (as defined in Rule 433) not constituting an Issuer Free Writing Prospectus (a
“Non-Prospectus Road Show”) or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or in any amendment or supplement thereto or in any
Permitted Issuer Information or
any Non-Prospectus Road Show, any 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, and shall reimburse each Underwriter and each such director, officer,
employee or controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Underwriter or that affiliate, director, officer, employee or
controlling person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or in any such amendment or supplement thereto or in any Permitted Issuer
Information or any Non-Prospectus Road Show, in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the Representative
by or on behalf of any Underwriter specifically for inclusion therein, which information
consists solely of the information specified in Section 8(e). The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have to any
Underwriter or to any affiliate, director, officer, employee or controlling person of that
Underwriter.




     (b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, its directors, officers and employees, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto or
in any Non-Prospectus Road Show, or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or in any amendment or supplement thereto or in any Non-Prospectus Road Show, any
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, but in each case
only to the extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representative by or









 



25



on behalf of that Underwriter specifically for inclusion therein, which information
consists solely of the information specified in Section 8 (e). The foregoing indemnity
agreement is in addition to any liability that any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person of the Company




     (c) Promptly after receipt by an indemnified party under this Section 8 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section 8, notify
the indemnifying party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the indemnified party shall have the right to employ
counsel to represent jointly the indemnified party and those other indemnified parties and
their respective directors, officers, employees and controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be sought under this
Section 8 if (i) the indemnified party and the indemnifying party shall have so mutually
agreed; (ii) the indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party; (iii) the indemnified party and its
directors, officers, employees and controlling persons shall have reasonably concluded that
there may be legal defenses available to them that are different from or in addition to
those available to the indemnifying party; or (iv) the named parties in any such proceeding
(including any impleaded parties) include both the indemnified parties or their respective
directors, officers, employees or controlling persons, on the one hand, and the indemnifying
party, on the other hand, and representation of both sets of parties by the same counsel
would be inappropriate due to actual or potential differing interests between them, and in
any such event the fees and expenses of such separate counsel shall be paid by the
indemnifying party as incurred. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding and does not include any findings of fact or
admissions of fault or culpability as to the indemnified party, or (ii) be liable for any
settlement of









 



26



any such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying party or if
there be a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.




     (d) If the indemnification provided for in this Section 8 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 8(a), or
8(b) in respect of any loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other, from the offering of the Stock or (ii)
if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and the Underwriters,
on the other, with respect to the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased under this
Agreement (before deducting expenses) received by the Company, as set forth in the table on
the cover page of the Prospectus, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock purchased
under this Agreement, as set forth in the table on the cover page of the Prospectus, on the
other hand. The relative fault, of the Company, on the one hand, and the Underwriters, on
the other, shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take into account the
equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include, for purposes of this
Section 8(d), any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute any amount
in excess of the amount by which the net proceeds from the sale of the Stock underwritten by
it exceeds the amount of any damages that such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of









 



27



such fraudulent misrepresentation. The Underwriters’ obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.




     (e) The Underwriters severally confirm, and the Company acknowledges and agrees, that
(i) the statements regarding delivery of shares by the Underwriters set forth on the cover
page of the Preliminary Prospectus and the Prospectus and (ii) the concession figure
appearing in the fourth paragraph under the caption “Underwriting”, and the first paragraph
under the caption “Underwriting — Stabilization and Short Positions” (relating to
stabilization by the Underwriters), in the Preliminary Prospectus and the Prospectus, are
correct and constitute the only information concerning such Underwriters furnished in
writing to the Company by or on behalf of the Underwriters specifically for inclusion in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the Pricing Disclosure
Package, any Issuer Free Writing Prospectus or any amendment or supplement thereto or in any
Non-Prospectus Road Show.



          9. Termination. The obligations of the Underwriters hereunder may be terminated by the
Representative by notice given to and received by the Company prior to delivery of and payment for
the Firm Stock if, prior to that time, any of the events described in Sections 7(j), 7(k) and 7(l)
shall have occurred or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.




          10. Reimbursement of Underwriters’ Expenses. If the Company shall fail to tender the Stock
for delivery to the Underwriters by reason of any failure, refusal or inability on the part of the
Company to perform any agreement to be performed on its part hereunder, or because any other
condition of the obligations hereunder required to be fulfilled by the Company is not fulfilled for
any reason, or (b) the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement, the Company will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of one counsel) incurred by the Underwriters
in connection with this Agreement and the proposed purchase of the Stock, and upon demand the
Company shall pay the full amount thereof to the Representative.




          11. Research Analyst Independence. The Company acknowledges that the Underwriters’ research
analysts and research departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies, and that such
Underwriters’ research analysts may hold views and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the offering that differ from
the views of their respective investment banking divisions. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company may have against the
Underwriters with respect to any conflict of interest that may arise from the fact that the views
expressed by their independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company by such Underwriters’ investment
banking divisions. The Company acknowledges that each of the Underwriters is a full service
securities firm and as such from time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers and hold long or short positions
in debt or equity securities of the Company.










 



28




          12. No Fiduciary Duty. The Company acknowledges and agrees that in connection with this
offering, sale of the Stock or any other services the Underwriters may be deemed to be providing
hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between the parties
or any oral representations or assurances previously or subsequently made by the Underwriters: (i)
no fiduciary or agency relationship between the Company and any other person, on the one hand, and
the Underwriters, on the other, exists; (ii) the Underwriters are not acting as advisors, expert or
otherwise, to the Company, including, without limitation, with respect to the determination of the
public offering price of the Stock, and such relationship between the Company, on the one hand, and
the Underwriters, on the other, is entirely and solely commercial, based on arms-length
negotiations; (iii) any duties and obligations that the Underwriters may have to the Company shall
be limited to those duties and obligations specifically stated herein; and (iv) the Underwriters
and their respective affiliates may have interests that differ from those of the Company. The
Company hereby waives any claims that the Company may have against the Underwriters with respect
to any breach of fiduciary duty in connection with this offering.




          13. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in
writing, and:





(a) if to the Underwriters, shall be delivered or sent by mail to Barclays Capital
Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate
Registration, with a copy, in the case of any notice pursuant to Section 8(c), to
the Director of Litigation, Office of the General Counsel, Barclays Capital Inc.,
745 Seventh Avenue, New York, New York 10019; and




(b) if to the Company, shall be delivered or sent by mail or facsimile transmission
to the address of the Company c/o Reliance Standard Life Insurance Company, 2001
Market Street, Suite 1500, Philadelphia, Pennsylvania 19103-7303, Attention: Chad W.
Coulter (Fax: (267) 256-0650).


Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by Barclays Capital Inc.




          14. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the directors, officers
and employees of the Underwriters and each person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Securities Act and (B) the indemnity agreement of the
Underwriters contained in Section 8(b) of this Agreement shall be deemed to be for the benefit of
the directors of the Company, the officers of the Company who have signed the Registration
Statement and any person controlling the Company within the meaning of Section 15 of the Securities
Act. Nothing in this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 14, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision contained herein.










 



29




          15. Survival. The respective indemnities, representations, warranties and agreements of the
Company and the Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Stock
and shall remain in full force and effect, regardless of any investigation made by or on behalf of
any of them or any person controlling any of them.




          16. Definition of the Terms “Business Day” and “Subsidiary”. For purposes of this Agreement,
(a) “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on
which banking institutions in New York are generally authorized or obligated by law or executive
order to close and (b) “subsidiary” has the meaning set forth in Rule 405.




          17. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.




          18. Counterparts. This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be deemed to be an
original but all such counterparts shall together constitute one and the same instrument.




          19. Headings. The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.

















 



30


     If the foregoing correctly sets forth the agreement between the Company and the Underwriters,
please indicate your acceptance in the space provided for that purpose below.



	 	 	 	 	 
	 	Very truly yours,



DELPHI FINANCIAL GROUP, INC.

 	 
	 	By:  	/s/ Chad W. Coulter	 
	 	 	Name:  	Chad W. Coulter	 
	 	 	Title:  	Senior Vice President, Secretary and General Counsel	 
	 



Accepted:




BARCLAYS CAPITAL INC.




For itself and as Representative

of the several Underwriters named

in Schedule 1 hereto




	 	 	 	 	 
	By:  	/s/
Mark Schwartz	 	 
	 	Authorized Representative 	 	 









 



 


SCHEDULE 1




	 	 	 	 	 
	 	 	Number of Shares of
	Underwriters	 	Firm Stock
	 
	 	 	 	 
	Barclays Capital Inc.
	 	 	3,000,000	 
	 
	 	 	 	 
	 
	 	 	 	 
	Total
	 	 	3,000,000	 
	 
	 	 	 	 












 



 


SCHEDULE 2




[RESERVED]










 



 




SCHEDULE 3




PERSONS DELIVERING LOCK-UP AGREEMENTS



Those persons indicated by * are both directors and officers of Delphi Financial Group, Inc.




Directors




Kevin R. Brine


Edward A. Fox

Steven A. Hirsh

Harold F. Ilg

James M. Litvack

James N. Meehan

Philip R. O’Connor

Robert Rosenkranz*

Donald A. Sherman*

Robert M. Smith, Jr.*

Robert F. Wright




Officers




Thomas W. Burghart

Chad W. Coulter

Lawrence E. Daurelle

Terrence T. Schoeninger




Stockholders




Rosenkranz & Company, L.P.










 



 


SCHEDULE 4





	1.	 	Public offering price: $21.00 per share
	 
	2.	 	Number of shares of Class A Common Stock offered: 3,000,000 shares.