USF&G Corporation
Common Stock, par value
$2.50 per share, Preferred Stock, par value $50 per share, and
Warrants to Purchase Common Stock and Preferred Stock
__________
Underwriting Agreement
__________________, 19__
To the Representatives of the several Underwriters named in
the respective Pricing Agreements hereinafter described.
Dear Sirs:
From time to time USF&G Corporation, a Maryland
corporation (the "Company"), proposes to enter into one or more
Pricing Agreements (each a "Pricing Agreement") in the form of
Annex I hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing
Agreement and the securities specified therein) certain of its
(i) shares of common stock, par value $2.50 per share (the
"Common Stock"), (ii) shares of preferred stock, par value $50
per share (the "Preferred Stock"), (iii) shares of convertible
preferred stock, par value $50 per share, convertible into
shares of Common Stock (the "Convertible Preferred Stock"), (iv)
shares of exchangeable preferred stock, par value $50 per share,
exchangeable into debt securities (the "Debt Securities") (the
"Exchangeable Preferred Stock" and, together with the
Convertible Preferred Stock and the Preferred Stock, the
"Offered Preferred Stock"), (v) depositary shares representing
shares of Offered Preferred Stock (the "Depositary Shares" and,
together with the Offered Preferred Stock, the "Shares"), and
(vi) warrants (the "Warrants") to purchase Common Stock or
Offered Preferred Stock (the "Warrant Securities"), in any such
case, as specified in Schedule II to such Pricing Agreement. The
Common Stock, the Offered Preferred Stock, the Depositary Shares
and the Warrants (and, to the extent appropriate, any Debt
Securities and Warrant Securities) are collectively referred to
herein as the "Securities". With respect to any Pricing
Agreement, those Securities which the Underwriters are committed
to purchase are referred to, as appropriate, the "Firm Common
Stock", the "Firm Offered Preferred Stock", the "Firm Depositary
Shares" and the "Firm Warrants", respectively, and collectively,
the "Firm Securities". If specified in the Pricing Agreement,
the Company may grant to the Underwriters the right to purchase
at their election an additional number of Securities, specified
in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Common Stock", the "Optional Offered Preferred Stock",
the "Optional Depositary Shares" and the "Optional Warrants",
respectively, and collectively, the "Optional Securities"). The
Firm Common Stock and any Optional Common Stock are collectively
referred to as the "Designated Common Stock". The Firm Offered
Preferred Stock and any Optional Offered Preferred Stock are
collectively referred to as the "Designated Offered Preferred
Stock." The Firm Depositary Shares and any Optional Depositary
Shares are collectively referred to as the "Designated
Depositary Shares." The Firm Warrants and the Optional Warrants
are collectively referred to as the "Designated Warrants". The
Designated Common Stock, the Designated Offered Preferred Stock,
the Designated Depositary Shares and the Designated Warrants are
collectively referred to as the "Designated Securities." If the
Prospectus (as defined in Section 2(a)) and Pricing Agreement so
provide, the Offered Preferred Stock will be deposited by the
Company against delivery of receipts (the "Depositary Receipts")
to be issued by the depositary (the "Depositary") named in the
deposit agreement, (the "Deposit Agreement"), between the
Company, the Depositary and the holders from time to time of the
Depositary Receipts issued thereunder and evidencing Designated
Depositary Shares. Each Designated Depositary Share will
represent the number of or fraction of the number of deposited
shares of Offered Preferred Stock specified in the applicable
Prospectus and in Schedule II to such Pricing Agreement.
The terms and rights of any particular issuance of
Designated Securities shall be as specified in the Pricing
Agreement relating thereto and in or pursuant to the resolution
or resolutions of the board of directors of the Company
identified in such Pricing Agreement and, with respect to
Designated Warrants, in or pursuant to the warrant agreement
(the "Warrant Agreement") identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be
made from time to time to the Underwriters of such Securities,
for whom the firms designated as representatives of the
Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a
single firm acting as sole representative of the Underwriters
and to Underwriters who act without any firm being designated as
their representative. This Underwriting Agreement shall not be
construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to
purchase any of the Securities. The obligation of the Company to
issue and sell any of the Securities and the obligation of any
of the Underwriters to purchase any of the Securities shall be
evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement
shall specify the aggregate number of Firm Securities, the
maximum number of Optional Securities, if any, the initial
public offering price of such Firm and Optional Securities or
the manner of determining such price, the purchase price to the
Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the
Representatives of such Underwriters, the number of such
Designated Securities to be purchased by each Underwriter and
the commission, if any, payable to the Underwriters with respect
thereto and shall set forth the date, time and manner of
delivery of such Firm and Optional Securities, if any, and
payment therefor. The Pricing Agreement shall also specify (to
the extent not set forth in the Warrant Agreement or Deposit
Agreement and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A
Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters
under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement in respect of the
Securities, the shares of Common Stock issuable upon
conversion of any Convertible Preferred Stock, the Debt
Securities issuable upon exchange of any Exchangeable
Preferred Stock and the Warrant Securities issuable upon
exercise of any Warrants has been filed with the Securities
and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be
delivered to the Representatives and, excluding exhibits to
such registration statement, but including all documents
incorporated by reference in the prospectus contained
therein, to the Representatives for each of the other
Underwriters have been declared effective by the Commission
in such form; no other document with respect to such
registration statement or document incorporated by reference
therein has heretofore been filed or transmitted for filing
with the Commission; and no stop order suspending the
effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or, to
the best of the Company's knowledge, threatened by the
Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant
to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the
"Act"), being hereinafter called a "Preliminary Prospectus";
the various parts of such registration statement, including
all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the registration
statement at the time such part of the registration
statement became effective, each as amended at the time such
part of the registration statement became effective, being
hereinafter called the "Registration Statement"; the
prospectus relating to the Securities, in the form in which
it has most recently been filed, or transmitted for filing,
with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any
Preliminary Prospectus or Prospectus shall be deemed to
refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may
be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in
the Registration Statement; any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is
filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date
of such filing); and any reference to the Preliminary
Prospectus, Prospectus or Registration Statement shall be
deemed to mean such document after excluding any statement
in any such document which does not constitute a part
thereof pursuant to Rule 412 of Regulation C under the Act
and after substituting therefor any statement modifying or
superseding such excluded statement;
(b) The documents incorporated by reference in
the Prospectus, when they became effective or were filed
with the Commission, as the case may be, conformed in all
material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
any further documents so filed and incorporated by reference
in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by an Underwriter of Designated Securities through
the Representatives expressly for use in the Prospectus as
amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in
all material respects to the requirements of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), if applicable, and the rules and
regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any
amendment or supplement thereto, 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, however, that this
representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by an Underwriter of Designated Securities through
the Representatives expressly for use in the Prospectus as
amended or supplemented relating to such Securities;
(d) Neither the Company nor any of its
subsidiaries has sustained since the date of the latest
audited financial statements included or incorporated by
reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated
in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, there has not been (i) any material
addition, or any development involving a prospective
material addition, to either the Company's consolidated
reserve for property/casualty insurance claims and claims
expense or the consolidated reserve for life insurance
policy benefits, (ii) any change in the capital stock,
short-term debt or long-term debt of the Company or any of
its subsidiaries or (iii) any material adverse change, or
any development involving a prospective material adverse
change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of
operations of the Company and its subsidiaries (, taken as a
whole), otherwise than as set forth or contemplated in the
Prospectus;
(e) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with power
and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus;
each of United States Fidelity and Guaranty Company and
Fidelity and Guaranty Life Insurance Company (each a
"Principal Subsidiary" and, collectively, the "Principal
Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation;
(f) The Company has authorized capital stock as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(g) The Common Stock has been duly and validly
authorized, and, when the Firm Common Stock is issued and
delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Common Stock and,
in the case of any Optional Common Stock, pursuant to
Over-allotment Options (as defined in Section 3 hereof) with
respect to such Common Stock, such Designated Common Stock
will be duly and validly issued and fully paid and
non-assessable; the Common Stock conforms to the description
thereof contained in the Registration Statement and the
Designated Common Stock will conform to the description
thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Common Stock;
the shares of Common Stock initially issuable upon
conversion of any Convertible Preferred Stock, if
applicable, have been duly and validly authorized and
reserved for issuance and, when issued and delivered in
accordance with the provisions of the Convertible Preferred
Stock, will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the
Common Stock contained in the Prospectus as amended or
supplemented with respect to such Convertible Preferred
Stock; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non- assessable
and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(h) The Offered Preferred Stock has been duly
authorized, and, when the Designated Offered Preferred Stock
is duly executed, countersigned, issued and delivered
pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Offered Preferred Stock, the
Designated Offered Preferred Stock will be duly and validly
issued and fully paid and non- assessable; when Depositary
Receipts evidencing any Firm Depositary Shares are issued
and delivered against deposit of Firm Offered Preferred
Stock and against payment for the Firm Depositary Shares
pursuant to this Agreement, the Pricing Agreement relating
to the Designated Depositary Shares and the Deposit
Agreement and, in the case of any Optional Depositary
Shares, pursuant to any Over-allotment Option (as defined in
Section 3), the Depositary Receipts will be legally
issued and will entitle the holders thereof to the rights
specified in the Depositary Receipts and the Deposit
Agreement; and the Designated Offered Preferred Stock and
the Designated Depositary Shares will conform to the
descriptions thereof contained in the Prospectus as amended
or supplemented with respect to such Designated Offered
Preferred Stock and Designated Depositary Shares;
(i) In the event that any of the Designated
Securities are Designated Depositary Shares, the Deposit
Agreement, which will be substantially in the form filed as
an exhibit to the Registration Statement, has been duly
authorized by the Company and, at the Time of Delivery (as
defined in Section 4 hereof) for such Designated Depositary
Shares, assuming due authorization, execution and delivery
by the Deposi- tary, the Deposit Agreement will constitute a
valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to
bank- ruptcy, insolvency, reorganization, and other laws of
general applicability relating to or affecting creditors'
rights and to general equity principles, and the Deposit
Agreement conforms to the description thereof contained in
the Prospectus as amended or supplemented with respect to
such Designated Depositary Shares;
(j) In the event any of the Designated Offered
Preferred Stock is Exchangeable Preferred Stock, the Debt
Securities initially issuable upon exchange of the
Exchangeable Preferred Stock have been duly authorized, and,
when the Debt Securities are issued and delivered in
accordance with the provisions of the Exchangeable Preferred
Stock, such Debt Securities will have been duly executed,
authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture (as
defined in the Pricing Agreement), which will be
substantially in the form filed as an exhibit to the
Registration Statement; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act
and, at the time the Debt Securities are issued, the
Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles; and the Indenture conforms, and the Debt
Securities will conform in all material respects, to the
descriptions thereof contained in the Prospectus as amended
or supplemented with respect to such Debt Securities;
(k) In the event that any of the Designated
Securities are Designated Warrants, the Warrants have been
duly authorized and, when Designated Warrants are issued and
delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Warrants and
countersigned by the Warrant Agent as provided in the
Warrant Agreement, such Designated Warrants will have been
duly executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Warrant
Agreement under which they are to be issued, which will be
substantially in the form filed as an exhibit to the
Registration Statement; the Warrant Agreement has been duly
authorized and, at the Time of Delivery for such Designated
Warrants, will constitute a valid and legally binding
instrument enforceable in accordance with its terms subject,
as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or
affecting creditors' rights and to general equity
principles; and the Warrant Agreement conforms, and the
Designated Warrants will conform in all material respects,
to the descriptions thereof in the Prospectus as amended or
supplemented with respect to such Designated Warrants;
(l) In the event that any of the Designated
Securities are Designated Warrants, the Warrant Securities
initially issuable upon exercise of the Designated Warrants
have been duly authorized, and, when duly executed and
countersigned, if applicable, and issued and delivered in
accordance with the provisions of the Warrant Agreement,
will be duly and validly issued and fully paid and
non-assessable; and the Warrant Securities will conform to
the description thereof contained in the Prospectus as
amended or supplemented with respect to such Warrant
Securities;
(m) The issue and sale of the Securities, the
issue of the shares of Common Stock upon conversion of the
Convertible Preferred Stock, if applicable, the issue of the
Debt Securities upon exchange of the Exchangeable Preferred
Stock, if applicable, and the issue and sale of any Warrant
Securities upon the exercise of Warrants pursuant to the
Warrant Agreement, if applicable, and the compliance by the
Company with all of the provisions of the Securities, this
Agreement, any Pricing Agreement, the Deposit Agreement, if
applicable, the Warrant Agreement, if applicable, and each
Over-allotment Option, if any, and the consummation of the
transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement, similar financing agreement or
instrument or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the Charter or By-laws of the
Company or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court
or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of
the transactions contemplated by this Agreement or any
Pricing Agreement, the Deposit Agreement, if applicable, the
Warrant Agreement, if applicable, or any Over-allotment
Option, except such as have been, or will have been prior to
each Time of Delivery (as defined in Section 4 hereof),
obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Designated Securities by the Underwriters;
(n) Other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse
effect on the consolidated financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(o) The Company and 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 such as are described in the Prospectus
or such as do not materially affect the value of such
property and do not interfere with the use made and proposed
to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(p) Ernst & Young, who have certified certain
financial statements of the Company and its subsidiaries,
are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(q) Each of the Principal Subsidiaries is duly
licensed to conduct an insurance business under the
insurance laws of each jurisdiction in which the conduct of
its business requires such licensing and of each
jurisdiction in which the failure to be so licensed would
have, individually or in the aggregate, a material adverse
effect on the business operations, consolidated financial
position, shareholders' equity or results of operations of
the Company and its subsidiaries (, taken as a whole); each
of the Company and the Principal Subsidiaries has all
consents, approvals, authorizations, orders, registrations
and qualifications of or with, and is in compliance with,
all statutes, orders, rules and regulations of, all courts
and governmental agencies and bodies having jurisdiction
over it and any of its properties, except where the failure
to have any such consent, approval, authorization, order,
registration or qualification, or so to comply, would not,
individually or in the aggregate with all other such
failures, have a material adverse effect on the business
operations, consolidated financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries (, taken as a whole); and there is no pending
or, to the knowledge of the Company, threatened action,
suit, proceeding or investigation that reasonably could lead
to the revocation, termination or suspension of, or
render invalid or otherwise ineffective, any such license,
consent, approval, authorization, order, registration or
qualification, other than any such revocation, termination,
suspension, invalidity or ineffectiveness that would not,
individually or in the aggregate with all other such
revocations, terminations, suspensions, invalidity and
ineffectiveness, have a material adverse effect on the
business operations, consolidated financial position,
shareholders' equity or results of operations of the Company
and its subsidiaries (, taken as a whole);
(r) All property-casualty reinsurance treaties
and arrangements to which any of the Company and the
Principal Subsidiaries is the ceding party are in full force
and effect, with such exceptions as would not individually
or in the aggregate have a material adverse effect on the
consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries,
and neither the Company nor any of the Principal
Subsidiaries is in violation of, or in default in the
performance, observance or fulfillment of, any obligation,
agreement, covenant or condition contained therein, except
to the extent that any such violation or default would not,
individually or in the aggregate with all such other
violations and defaults, have a material adverse effect on
the consolidated financial position, shareholders' equity
or results of operations of the Company and its
subsidiaries; neither the Company nor any of the Principal
Subsidiaries has received any notice from any of the other
parties to such treaties, contracts and arrangements that
such other party intends not to perform in any material
respect such treaty, contract or arrangement, and the
Company and the Principal Subsidiaries have no reason to
believe that any of the other parties to such treaties,
contracts and arrangements will be unable to perform in all
material respects its obligations under such treaties,
contracts and arrangements;
(s) The statutory financial statements of the
Principal Subsidiaries required or permitted to be prepared
in accordance with the insurance laws, rules and regulations
of any jurisdiction to which the Principal Subsidiaries are
subject, and from which certain ratios and other financial
and statistical data contained in the Registration Statement
and the Prospectus have been derived, have, for each
relevant period, been prepared in conformity in all material
respects with the requirements of such insurance laws,
rules and regulations and present fairly the information
purported to be shown;
(t) The reserves carried on the books of the
Principal Subsidiaries for payment of all benefits, losses,
claims and expenses under outstanding insurance policies and
programs are adequate, under presently accepted actuarial
principles applied on a consistent basis, to cover the total
amount of all reasonably anticipated liabilities under all
issued and outstanding insurance policies and programs under
which the Principal Subsidiaries may have any liability; and
(u) The Company has complied with all provisions
of Section 517.075 Florida Statutes (Chapter 92-198, Laws of
Florida).
3. Upon the execution of the Pricing Agreement
applicable to any Designated Securities and authorization by the
Representatives of the release of the Firm Securities, the
several Underwriters propose to offer the Firm Securities for
sale upon the terms and conditions set forth in the Prospectus
as amended or supplemented.
The Company may specify in the Pricing Agreement
applicable to any Designated Securities that the Company thereby
grants to the Underwriters the right (an "Overallotment Option")
to purchase at their election up to the number of Optional
Securities set forth in such Pricing Agreement, on the terms set
forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Securities. Any such
election to purchase Optional Securities may be exercised by
written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting
forth the aggregate number of Optional Securities to be
purchased and the date on which such Optional Securities are to
be delivered, as determined by the Representatives but in no
event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless the Representatives and the Company
otherwise agree in writing, earlier than or later than the
respective number of business days after the date of such notice
set forth in such Pricing Agreement.
The number of Optional Securities to be added to the
number of Firm Securities to be purchased by each Underwriter as
set forth in Schedule I to the Pricing Agreement applicable to
such Securities shall be, in each case, the number of Optional
Securities which the Company has been advised by the
Representatives have been attributed to such Underwriter,
provided that, if the Company has not been so advised, the
number of Optional Securities to be so added shall be, in each
case, that proportion of Optional Securities which the number of
Firm Securities to be purchased by such Underwriter under such
Pricing Agreement bears to the aggregate number of Firm
Securities (rounded as the Representatives may determine to the
nearest 100 shares). The total number of Designated Securities
to be purchased by all the Underwriters pursuant to such Pricing
Agreement shall be the aggregate number of Firm Securities set
forth in Schedule I to such Pricing Agreement plus the aggregate
number of the Optional Securities which the Underwriters elect
to purchase.
4. Certificates for the Firm Securities and Optional
Securities to be purchased by each Underwriter pursuant to the
Pricing Agreement relating thereto, in definitive form and in
such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours'
prior notice to the Company, shall be delivered by or on behalf
of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by certified or official
bank check or checks, payable to the order of the Company in the
funds specified in such Pricing Agreement, (i) with respect to
the Firm Securities, all at the place and time and date
specified in such Pricing Agreement or at such other place and
time and date as the Representatives and the Company may agree
upon in writing, such time and date being herein called the
"First Time of Delivery", and (ii) with respect to the Optional
Securities, if any, on the time and date specified by the
Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such
Optional Securities, or at such other time and date as the
Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, herein called
the "Second Time of Delivery". Each such time and date for
delivery is herein called a "Time of Delivery".
If applicable, as compensation to the Underwriters for
their commitments to purchase the Designated Securities, the
Company at each Time of Delivery will pay to the
Representatives, for the accounts of the several Underwriters,
an amount per share set forth in the Pricing Agreement relating
to the Designated Securities to be sold by the Company
thereunder.
5. The Company agrees with each of the Underwriters
of any Designated Securities:
(a) To prepare the Prospectus as amended and
supplemented in relation to the applicable Designated
Securities in a form approved by the Representatives and to
file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission's close of business on the
second business day following the execution and delivery of
the Pricing Agreement relating to the applicable Designated
Securities or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing
Agreement relating to such Securities and prior to any Time
of Delivery for such Securities which shall be disapproved
by the Representatives for such Securities promptly after
reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after any Time
of Delivery for such Securities and furnish the
Representatives 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 for so long as the delivery of a prospectus is
required in connection with the offering or sale of such
Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the
Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of
any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for
offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or
for additional information; and, in the event of the
issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating
to the Securities or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such
action as the Representatives may reasonably request to
qualify the Securities, the shares of Common Stock issuable
upon conversion of the Convertible Preferred Stock, the Debt
Securities issuable upon exchange of the Exchangeable
Preferred Stock and the Warrant Securities issuable upon
exercise of Warrants for offering and sale under the
securities laws of such jurisdictions as the Representatives
may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in
connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of
the Prospectus as amended or supplemented in such quantities
as the Representatives may from time to time reasonably
request, and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of the
Securities and if at such time any event 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 during such same period
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 Act, the Exchange Act
or the Trust Indenture Act, if applicable, to notify the
Representatives and upon their 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 Representatives may from time to time reasonably
request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or
effect such compliance;
(d) To make generally available to its security-
holders as soon as practicable, but in any event not later
than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c)), an
earning statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder
(including at the option of the Company Rule 158);
(e) During the period beginning from the date of
the Pricing Agreement for such Designated Securities and
continuing to and including (____) days after the last Time
of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of any shares of
capital stock or preferred stock of the Company which are
substantially similar to such Designated Securities or any
securities convertible, exercisable or exchangeable for
securities which are substantially similar to such
Designated Securities, without the prior written consent of
the Representatives;
(f) During a period of five years from the date
of the first Pricing Agreement, to furnish to the
Underwriters (A) copies of all reports or other
communications (financial or other) generally furnished to
stockholders, and deliver to the Underwriters (i) as soon as
they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any
national securities exchange on which the Securities or any
class of securities of the Company is listed and (ii) the
documents specified in Section ___ of the Warrant Agreement,
as in effect at the Time of Delivery; and (B) such
additional information concerning the business and financial
condition of the Company as the Representatives may from
time to time reasonably request (such financial statements
to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the
Commission);
(g) To reserve and keep available at all times,
free of preemptive rights, shares of Common Stock for the
purpose of enabling the Company to satisfy any obligations
to issue shares of its Common Stock upon conversion of the
Convertible Preferred Stock or exercise of Warrants, as the
case may be; and
(h) To use its best efforts to list any shares of
Common Stock on the New York Stock Exchange.
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the
registration of the Securities, the Debt Securities and the
Warrant Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any
Deposit Agreement, any Warrant Agreement, any Blue Sky and Legal
Investment Memoranda and any other documents in connection with
the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the
Securities, the Debt Securities and the Warrant Securities for
offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating
services for rating the Securities; (v) any filing fees incident
to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vi)
the cost of preparing certificates for the Securities and the
Warrant Securities; (vii) the cost and charges of any transfer
agent or registrar or dividend disbursing agent; (viii) the fees
and expenses of any Warrant Agent and any agent of any Warrant
Agent and the fees and disbursements of counsel for any Warrant
Agent in connection with the Warrant Agreement, the Warrants and
the Warrant Securities; (ix) any cost of preparing Depositary
Receipts evidencing Depositary Shares and the delivery of any
Depositary Shares to the Underwriters; (x) the costs and
expenses of the deposit of Offered Preferred Stock under any
Deposit Agreement in exchange for Depositary Receipts issued
thereunder, including the charges of the Depositary in
connection therewith; (xi) to the extent set forth in any
Deposit Agreement, the fees of the Depositary and any agent
appointed under the Deposit Agreement; and (xii) all other costs
and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not
otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all
of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers
they may make.
7. The obligations of the Underwriters of any
Designated Securities under the Pricing Agreement relating to
such Designated Securities shall be subject, in the discretion
of the Representatives, to the condition that all
representations and warranties and other statements of the
Company in or incorporated by reference in the Pricing Agreement
relating to such Designated Securities are, at and as of each
Time of Delivery for such Designated Securities, true and
correct, the condition that the Company shall have performed all
of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus as amended or supplemented in
relation to such Designated Securities shall have been filed
with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with
Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on
the part of the Commission shall have been complied with to
the Representatives' reasonable satisfaction;
(b) Davis Polk & Wardwell, counsel for the
Underwriters, shall have furnished to the Representatives
such opinion or opinions, dated each Time of Delivery for
such Designated Securities, with respect to the
incorporation of the Company, this Agreement, the Pricing
Agreement, the Warrant Agreement, if applicable, the Deposit
Agreement, if applicable, the validity of the Designated
Securities being delivered at such Time of Delivery, the
shares of Common Stock initially issuable upon conversion of
the Convertible Preferred Stock, if applicable, the Debt
Securities initially issuable upon exchange of the
Exchangeable Preferred Stock, if applicable, the Warrant
Securities issuable upon exercise of the Warrants, if
applicable, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as the
Representatives may reasonably request, and such counsel
shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Piper & Marbury, counsel for the Company, or
other counsel satisfactory to the Representatives, shall
have furnished to the Representatives their written opinion,
dated each Time of Delivery for such Designated Securities,
in form and substance satisfactory to the Representatives,
to the effect that:
(i) The Company has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of
its incorporation, with power and authority to own its
properties and conduct its business as described in the
Prospectus as amended or supplemented; each of the
Principal Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of its jurisdiction of
incorporation;
(ii) The Company has authorized capital
stock as set forth in the Prospectus as amended or
supplemented, and all of the issued shares of capital
stock of the Company (including, if applicable, the
Designated Common Stock being delivered at such Time of
Delivery) have been duly and validly authorized and
issued and are fully paid and non-assessable; and the
Designated Common Stock conforms to the description
thereof in the Prospectus as amended or supplemented;
the shares of Common Stock initially issuable upon
conversion of any Convertible Preferred Stock, if
applicable, have been duly and validly authorized and
reserved for issuance and, when issued and delivered in
accordance with the provisions of the Convertible
Preferred Stock, will be duly and validly issued and
fully paid and non-assessable; and all of the issued
shares of capital stock of the Principal Subsidiaries
of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable, and
(except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of
officers of the Company or its Principal Subsidiaries,
provided that such counsel shall state that they
believe that both the Representatives and they are
justified in relying upon such opinions and
certificates);
(iii) The Company has been duly qualified
as a foreign corporation for the transaction of
business and is in good standing under the laws of each
other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require
such qualification, or is subject to no material
liability or disability by reason of the failure to be
so qualified in any jurisdiction (such counsel being
entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the
Company, provided that such counsel shall state that
they believe that both the Representatives and they are
justified in relying upon such opinions and
certificates);
(iv) To the best of such counsel's
knowledge and other than as set forth in the
Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the
aggregate have a material adverse effect on the
consolidated financial position, shareholders' equity
or results of operations of the Company and its
subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened
by others;
(v) This Agreement and the Pricing
Agreement with respect to the Designated Securities
have been duly authorized, executed and delivered by
the Company;
(vi) The Designated Offered Preferred
Stock has been duly authorized; when the Designated
Offered Preferred Stock being delivered at such Time of
Delivery is countersigned, and paid for pursuant to
this Agreement and the Pricing Agreement with respect
to such Designated Offered Preferred Stock, such
Designated Offered Preferred Stock will be duly and
validly issued and fully paid and non-assessable; when
Depositary Receipts evidencing any Firm Depositary
Shares are issued and delivered against payment for the
Firm Offered Preferred Stock and against payment for
the Firm Depositary Shares pursuant to this
Agreement, the Pricing Agreement relating to the
Designated Depositary Shares and the Deposit Agreement
and, in the case of any Optional Depositary Shares,
pursuant to any Over-allotment Option, the Depositary
Receipts will be legally issued and will entitle the
holders thereof to the rights specified in the
Depositary Receipts and the Deposit Agreement; and the
Designated Offered Preferred Stock and the Designated
Depositary Shares conform to the descriptions thereof
contained in the Prospectus as amended or supple-
mented;
(vii) In the event that any of the
Designated Securities are Designated Depositary Shares,
the Deposit Agreement has been duly authorized,
executed and delivered by the Company and, assuming due
authorization, execution and delivery by the
Depositary, constitutes a valid and legally binding
instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general
applicability relating to or affecting creditors'
rights and to general equity principles; and the
Deposit Agreement conforms to the description thereof
contained in the Prospectus as amended or supplemented;
(viii) In the event any of the Designated
Offered Preferred Stock is Exchangeable Preferred
Stock, the Debt Securities initially issuable upon
exchange of the Exchangeable Preferred Stock have been
duly authorized, and, when the Debt Securities are
issued and delivered in accordance with the provisions
of the Exchangeable Preferred Stock, such Debt
Securities will have been duly executed, authenticated,
issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to
the benefits provided by the Indenture; the Indenture
has been duly authorized and duly qualified under
the Trust Indenture Act and, at the time the Debt
Securities are issued, the Indenture will constitute a
valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
the Indenture conforms to the description thereof
contained in the Prospectus as amended or
supplemented;
(ix) In the event that any of the
Designated Securities are Designated Warrants, the
Designated Warrants have been duly authorized,
executed, issued and delivered and, when countersigned
by the Warrant Agent as provided by the Warrant
Agreement, will constitute valid and legally binding
obligations of the Company entitled to the benefits
provided by the Warrant Agreement;
(x) In the event that any of the
Designated Securities are Designated Warrants, the
Warrant Agreement has been duly authorized, executed
and delivered by the parties thereto and constitutes a
valid and legally binding instrument enforceable in
accordance with its terms subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
the Warrants and the Warrant Agreement conform to the
descriptions thereof contained in the Prospectus
as amended or supplemented;
(xi) In the event that any of the
Designated Securities are Designated Warrants, the
Warrant Securities initially issuable upon exercise of
the Designated Warrants have been duly authorized,
and, when duly executed and countersigned, if
applicable, and issued and delivered in accordance with
the provisions of the Warrant Agreement, will be duly
and validly issued and fully paid and non-assessable;
(xii) The issue and sale of the Designated
Securities being delivered at such Time of Delivery,
the issue of the shares of Common Stock upon conversion
of the Convertible Preferred Stock, if applicable, the
issue of the Debt Securities upon exchange of the
Exchangeable Preferred Stock, if applicable, and the
issue and sale of any Warrant Securities upon the
exercise of Warrants pursuant to the Warrant Agreement,
if applicable, and the compliance by the Company with
all of the provisions of this Agreement, the
Pricing Agreement with respect to the Designated
Securities, the Deposit Agreement, if applicable, and
the Warrant Agreement, if applicable, and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture,
mortgage, deed of trust, sale/leaseback agreement, loan
agreement, similar financing agreement or instrument or
other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will
such actions result in any violation of the provisions
of the Charter or By-laws of the Company or any statute
or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over the Company or any of its
subsidiaries or any of their properties;
(xiii) No consent, approval, authorization,
order, registration or qualification of or with any
such court or governmental agency or body is required
for the issue and sale of the Designated Securities or
the consummation by the Company of the transactions
contemplated by this Agreement, such Pricing Agreement,
the Deposit Agreement, if applicable, and the Warrant
Agreement, if applicable, except such as have been
obtained under the Act and the Trust Indenture Act, if
applicable, and such consents, approvals,
authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Designated Securities by the Underwriters;
(xiv) The documents incorporated by
reference in the Prospectus as amended or supplemented
(other than the financial statements, related schedules
and other financial information therein, as to which
such counsel need express no opinion), when they became
effective or were filed with the Commission, as the
case may be, complied as to form in all material
respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and
(xv) The Registration Statement and the
Prospectus as amended or supplemented and any further
amendments and supplements thereto made by the Company
prior to the Time of Delivery for the Designated
Securities (other than the financial statements,
related schedules and other financial information
therein, as to which such counsel need express no
opinion) comply as to form in all material respects
with the requirements of the Act and the Trust
Indenture Act, if applicable, and the rules and
regulations thereunder; and they do not know of any
amendment to the Registration Statement required to be
filed or any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be incorporated
by reference into the Prospectus as amended or
supplemented or required to be described in the
Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated
by reference or described as required.
(d) General Counsel of the Company or other
counsel satisfactory to the Representatives, shall have
furnished the Representatives their written opinion, dated
each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives to
the effect that:
(i) The Company has been duly qualified as a
foreign corporation for the transaction of business
and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such
qualification, or is subject to no material liability
or disability by reason of the failure to be so
qualified in any jurisdiction (such counsel being
entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the
Company, provided that such counsel shall state that
they believe that both the Representatives and they are
justified in relying upon such opinions and
certificates);
(ii) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its
subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material
adverse effect on the consolidated financial
position, shareholders' equity or results of operations
of the Company and its subsidiaries; and, to the best
of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities
or threatened by others;
(iii) The Company and 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 such as are
described in the Prospectus or such as do not
materially affect the value of such property and do not
interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the
Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with
such exceptions as are not material and do not
interfere with the use made and proposed to be made of
such property and buildings by the Company and its
subsidiaries (in giving the opinion in this clause,
such counsel may state that no examination of record
titles for the purpose of such opinion has been made,
and that they are relying upon a general review of the
titles of the Company and its subsidiaries, upon
opinions of local counsel and abstracts, reports and
policies of title companies rendered or issued at or
subsequent to the time of acquisition of such
property by the Company or its subsidiaries, upon
opinions of counsel to the lessors of such property
and, in respect of matters of fact, upon certificates
of officers of the Company or its subsidiaries,
provided that such counsel shall state that they
believe that both the Representatives and they are
justified in relying upon such opinions, abstracts,
reports, policies and certificates); and
(iv) Each of the Principal Subsidiaries is
duly licensed to conduct an insurance business under
the insurance laws of each jurisdiction in which the
conduct of its business requires such licensing and of
each jurisdiction in which the failure to be so
licensed would have, individually or in the aggregate,
a material adverse effect on the business operations,
consolidated financial position, shareholders' equity
or results of operations of the Company and its
subsidiaries (, taken as a whole); each of the Company
and the Principal Subsidiaries has all consents,
approvals, authorizations, orders, registrations and
qualifications of or with, and is in compliance with,
all statutes, orders, rules and regulations of, all
courts and governmental agencies and bodies having
jurisdiction over it and any of its properties, except
where the failure to have any such consent, approval,
authorization, order, registration or
qualification, or so to comply, would not, individually
or in the aggregate with all other such failures, have
a material adverse effect on the business operations,
consolidated financial position, shareholders' equity
or results of operations of the Company and its
subsidiaries (, taken as a whole); and, to the best of
such counsel's knowledge, there is no pending or
threatened action, suit, proceeding or investigation
that reasonably could lead to the revocation,
termination or suspension of, or render invalid or
otherwise ineffective, any such license, consent,
approval, authorization, order, registration or
qualification, other than any such revocation,
termination, suspension, invalidity or ineffectiveness
that would not, individually or in the aggregate with
all other such revocations, terminations, suspensions,
invalidity and ineffectiveness, have a material adverse
effect on the business operations, consolidated
financial position, shareholders' equity or results of
operations of the Company and its subsidiaries (,
taken as a whole).
In addition to the matters set forth above,
the opinions delivered pursuant to paragraphs (c) and (d)
above shall also contain a statement to the effect that
while such counsel are not passing upon, and do not assume
responsibility for, the accuracy, completeness or fairness
of the Registration Statement or the Prospectus, or any
further amendment or supplement thereto, including the
documents incorporated by reference therein, based upon the
procedures referred to in such opinion nothing has come to
the attention of such counsel which leads them to believe
(i) that the Registration Statement as of its effective date
or the Prospectus as of its date or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements, related
schedules and other financial information therein, as to
which such counsel need express no belief) contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) that as
of such Time of Delivery, either the Registration
Statement or the Prospectus (or any such further amendment
or supplement thereto) contains an untrue statement of a
material fact or omits to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading, or (iii) that any of the documents
incorporated by reference in the Prospectus which were
effective or filed with the Commission prior to such Time of
Delivery (other than the financial statements, related
schedules and other financial information therein, as to
which such counsel need express no belief), as of the
respective dates when they became effective or were filed
with the Commission, as the case may be, in each case after
excluding any statement in any such document which does not
constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the
Act and after substituting therefor any statement modifying
or superseding such excluded statement, contained, in the
case of a registration statement which became effective
under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein necessary to make the statements therein not
misleading, and in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made
when such documents were so filed, not misleading.
(e) On the date of the Pricing Agreement for such
Designated Securities and at each Time of Delivery for such
Designated Securities, the independent accountants of the
Company who have certified the financial statements of the
Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished
to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent
report filed with the Commission containing financial
statements and incorporated by reference in the Registration
Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex II hereto,
and with respect to such letter dated such Time of Delivery,
as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to
the Representatives;
(f) (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 Prospectus as amended or supplemented
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, otherwise than as set
forth or contemplated in the Prospectus as amended or
supplemented, and (ii) since the respective dates as of
which information is given in the Prospectus as amended or
supplemented there shall not have been (x) any addition, or
any development involving a prospective addition, to either
the Company's consolidated reserve for property/casualty
insurance claims and claims expense or the consolidated
reserve for life insurance policy benefits, (y) any change
in the capital stock, short- term debt or long-term debt of
the Company or any of its subsidiaries, or (z) any change,
or any development involving a prospective change, in or
affecting the general affairs, management, financial
position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus as amended or
supplemented, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Firm Securities or the
Optional Securities or both on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
(g) On or after the date of the Pricing Agreement
relating to the Designated Securities (i) no downgrading
shall have occurred in the rating accorded the Company's
debt securities or preferred stock by any "nationally
recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2)
under the Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of
the Company's debt securities or preferred stock;
(h) On or after the date of the Pricing Agreement
relating to the Designated Securities there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New
York Stock Exchange; (ii) a general moratorium on commercial
banking activities in New York declared by either Federal or
New York State authorities; (iii) the outbreak or escalation
of hostilities involving the United States or the
declaration by the United States of a national emergency or
war if the effect of any such event specified in this Clause
(iii) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Firm Securities or the
Optional Securities or both on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
or (iv) the occurrence of any material adverse change in the
existing financial, political or economic conditions in
the United States or elsewhere which, in the judgment of the
Representatives would materially and adversely affect the
financial markets or the market for the Securities and other
debt or equity securities;
(i) On or after the date of the Pricing Agreement
relating to the Designated Securities, (i) no downgrading
shall have occurred in the ratings accorded claims paying
ability of either of the Principal Subsidiaries by Standard
& Poor's Corporation, Moody's Investors Service, Inc., Duff
& Phelps Inc. or A.M. Best Company Inc.; and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications,
its rating of any of the claims paying ability of the
Principal Subsidiaries; and
(j) The Company shall have furnished or caused to
be furnished to the Representatives at each Time of Delivery
for the Designated Securities a certificate or certificates
of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations
and warranties of the Company herein at and as of such Time
of Delivery, as to the performance by the Company of all of
its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in
subsections (a) and (e) of this Section and as to such other
matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless
each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim 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 or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of
Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to
such Securities.
(b) Each Underwriter will indemnify and hold harmless
the Company against any losses, claims, damages or liabilities
to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by such Underwriter through the Representatives
expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement
of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party
under such subsection, notify the indemnifying party in writing
of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above in respect
of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the
Designated Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party
failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the
Underwriters of the Designated Securities on the other in
connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company
on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such
Underwriters on the other and the parties' relative intent,
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 subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall
be deemed to include 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 subsection (d), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the applicable
Designated Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to
pay by reason of such 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
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this
subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such
Securities and not joint.
(e) The obligations of the Company under this Section
8 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any,
who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its
obligation to purchase the Firm Securities or Optional
Securities which it has agreed to purchase under the Pricing
Agreement relating to such Securities, the Representatives may
in their discretion arrange for themselves or another party or
other parties to purchase such Securities on the terms contained
herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase
of such Firm Securities or Optional Securities, as the case may
be, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such
Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the
Company that they have so arranged for the purchase of such
Securities, or the Company notifies the Representatives that it
has so arranged for the purchase of such Securities, the
Representatives or the Company shall have the right to postpone
such Time of Delivery for such Securities for a period of not
more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the
Prospectus as amended or supplemented, or in any other documents
or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the
Prospectus which in the opinion of the Representatives may
thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for
the purchase of the Firm Securities or Optional Securities, as
the case may be, of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Securities which remains
unpurchased does not exceed one-eleventh of the aggregate number
of the Firm Securities or Optional Securities, as the case may
be, to be purchased at the respective Time of Delivery, then the
Company shall have the right to require each non-defaulting
Underwriter to purchase the number of Firm Securities or
Optional Securities, as the case may be, which such Underwriter
agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based
on the number of Firm Securities or Optional Securities, as the
case may be, which such Underwriter agreed to purchase under
such Pricing Agreement) of the Firm Securities or Optional
Securities, as the case may be, of such defaulting Underwriter
or Underwriters for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for
the purchase of the Firm Securities or Optional Securities, as
the case may be, of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Securities or Optional
Securities, as the case may be, which remains unpurchased
exceeds one-eleventh of the aggregate number of the Firm
Securities or Optional Securities, as the case may be, to be
purchased at the respective Time of Delivery, as referred to in
subsection (b) above, or if the Company shall not exercise the
right described in subsection (b) above to require
non-defaulting Underwriters to purchase Firm Securities or
Optional Securities, as the case may be, of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating
to such Firm Securities or the Over-allotment Option relating to
such Optional Securities, as the case may be, shall thereupon
terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section
8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements,
representations, warranties and other statements of the Company
and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or any officer or
director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If any Pricing Agreement or Over-allotment Option
shall be terminated pursuant to Section 9 hereof or by the
Representatives pursuant to Section 7(h) hereof, the Company
shall not then be under any liability to any Underwriter with
respect to the Firm Securities or Optional Securities with
respect to which such Pricing Agreement shall have been
terminated except as provided in Section 6 and Section 8 hereof;
but, if for any other reason Designated Securities are not
delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the
Representatives for all out-ofpocket expenses approved in
writing by the Representatives, including fees and disbursements
of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such
Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such
Designated Securities except as provided in Section 6 and
Section 8 hereof.
12. In all dealings hereunder, the Representatives of
the Underwriters of Designated Securities shall act on behalf of
each of such Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing
Agreement.
All statements, requests, notices and agreements
hereunder shall be in writing, and if to the Underwriters shall
be delivered or sent by mail, telex or facsimile transmission to
the address of the Representatives as set forth in the Pricing
Agreement; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to any Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied
to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement and each Pricing Agreement shall
be binding upon, and inure solely to the benefit of, the
Underwriters, the Company and, to the extent provided in Section
8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing
Agreement. As used herein, "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for
business.
15. This Agreement and each Pricing Agreement shall
be governed by and construed in accordance with the laws of the
State of New York.
16. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto and thereto in
any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together
constitute one and the same instrument.
Very truly yours,
USF&G Corporation
By:_____________________
Name: Title:
ANNEX I
Pricing Agreement
(Name of Representative,) (Name of Co-Representative(s),) As
Representatives of the several Underwriters named in Schedule I
hereto, (c/o Representatives,) (Address of Representatives)
____________________, 19__
Dear Sirs:
USF&G Corporation, a Maryland corporation (the
"Company"), proposes, subject to the terms and conditions stated
herein and in the Underwriting Agreement, dated ____________ __,
19__ (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated
Securities" (consisting of Firm Securities and any Optional
Securities the Underwriters may elect to purchase)). Each of
the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions
had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed
to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which
refers to the Prospectus in Section 2 of the Underwriting
Agreement shall be deemed to be a representation or warranty as
of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to
the Prospectus as amended or supplemented relating to the
Designated Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in
the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are
used herein as therein defined. The Representatives designated
to act on behalf of the Representatives and on behalf of each of
the Underwriters of the Designated Securities pursuant to
Section 12 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth at
the end of Schedule II hereto.
An amendment to the Registration Statement, or a
supplement to the Prospectus, as the case may be, relating to
the Designated Securities, in the form heretofore delivered to
you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein
and in the Underwriting Agreement incorporated herein by
reference, ((a)) the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in
Schedule II hereto, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto (,
and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Securities, as
provided below, the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company at the purchase
price to the Underwriters set out in Schedule II hereto that
portion of the number of Optional Securities as to which such
election shall have been exercised).
(The Company hereby grants to each of the Underwriters
the right to purchase at their election up to the number of
Optional Securities set forth opposite the name of such
Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments
in the sale of the Firm Securities. Any such election to
purchase Optional Securities may be exercised by written notice
from the Representatives to the Company given within a period of
30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Securities to be
purchased and the date on which such Optional Securities are to
be delivered, as determined by the Representatives but in no
event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date
of such notice.)
If the foregoing is in accordance with your
understanding, please sign and return to us (five) counterparts
hereof, and upon acceptance hereof by you, on behalf of each of
the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding
agreement between each of the Underwriters and the Company. It
is understood that your acceptance of this letter on behalf of
each of the Underwriters is or will be pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Representatives
as to the authority of the signers thereof.
Very truly yours,
USF&G Corporation
By:________________________
Name:
Title:
Accepted as of the date hereof:
(Name of Representative)
By:_____________________________
SCHEDULE I
(Maximum Number of
Number of (Firm) Optional
Securities Securities Which
Underwriter to be Purchased May be Purchased)
Total . . . . . ____________
============
SCHEDULE II
Title of Designated Common Stock:
Number of Shares of Designated Common Stock:
Number of Shares of Firm Common Stock:
Maximum Number of Shares of Optional Common Stock:
Initial Offering Price to Public:
($________ per Share) (Formula)
Purchase Price by Underwriters:
($________ per Share) (Formula)
(Commission Payable to Underwriters: $_______ per Share)
Specified Funds for Payment of Purchase Price:
(New York) Clearinghouse Funds
Title of Designated Offered Preferred Stock (including
Designated Depositary Shares):
(Date of Board Resolution Fixing the Terms and Conditions of the
Designated Offered Preferred Stock: ........, 19..)
Number of Shares of Designated Offered Preferred Stock
(Designated Depositary Shares):
Number of Shares of Firm Offered Preferred Stock (Firm
Depositary Shares):
Maximum Number of Shares of Optional Offered Preferred
Stock (Optional Depositary Shares):
(If Depositary Shares are to be issued:
_____ Depositary Shares shall represent the right to
receive an aggregate of ____ shares of Designated Offered
Preferred Stock. Each Designated Depositary Share will
represent one-___( ) of a share of Designated Offered
Preferred Stock.)
Initial Offering Price to Public:
($...... per (Depositary) Share) (Formula)
Purchase Price by Underwriters:
($...... per (Depositary) Share) (Formula)
Specified Funds for Payment of Purchase Price:
(New York) Clearinghouse Funds
Dividend Rate:
(.....% per annum)
Dividend Payment Dates:
(months and dates)
Dividend Rights:
(Non-) cumulative, (deferred)
Voting Rights:
Liquidation Rights:
Preemptive Rights:
Redemption Provisions:
(No provisions for redemption)
(The Designated Offered Preferred Stock (Designated
Depositary Shares) may be redeemed, (otherwise than through
the sinking fund,) in whole or in part at the option of the
Company, on or after ________, ____ at the following
redemption prices:
Redemption Year
Price ----
----------
and thereafter at $.... per share, together in each
case with accrued dividends to the redemption date.) (On any
dividend payment date falling on or after ________, ____, at
the election of the Company, at a redemption price equal to
the stated amount thereof, plus accrued dividends to the
date of redemption.)
(Other possible redemption provisions, such as
mandatory redemption upon occurrence of certain events or
redemption for changes in tax law)
Sinking Fund Provisions:
(None)
(The shares of Designated Offered Preferred Stock
(Designated Depositary Shares) are entitled to the benefit
of a sinking fund to retire ______ shares of Designated
Offered Preferred Stock (Designated Depositary Shares) on
________ in each of the years ____ through ____ at 100% of
their stated amount plus accrued dividends) (,together with
(cumulative) (non- cumulative) redemptions at the option of
the Company to retire an additional ...... shares of
Designated Offered Preferred Stock (Designated Depositary
Shares) in the years ____ through ____ at 100% of their
stated amount plus accrued dividends.)
(Convertible into Common Stock:)
(Exchangeable into Debt Securities:)
Title of Designated Warrants:
Number of Designated Warrants:
Number of Firm Warrants:
Maximum Number of Optional Warrants:
Initial Offering Price to Public:
($____ per Warrant)
Purchase Price By Underwriters:
($____ per Warrant)
Specified Funds for Payment of Purchase Price:
(New York) Clearinghouse Funds
Warrant Agreement:
The Warrants to be evidence by warrant certificates and
to be issued pursuant to the provisions of a Warrant
Agreement dated as of _________, 19__ (the "Warrant
Agreement") between the Company and ____________, and
Warrant Agent
Exercise Date:
Expiration Date:
Exercise Price:
Number of Shares of Warrant Securities Purchasable Upon Exercise
of One Warrant:
(Detachable Date:)
(Other Terms:)
Title and Terms of Warrant Securities:
For All Designated Securities:
Time of Delivery:
___________, 19__
Closing Location for Delivery of Securities:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
(Other Terms):(*)
- ------------(*) A description of particular tax, accounting or
other unusual features (including any event risk provisions) of
the Designated Securities should be set forth, or referenced to
an attached and accompanying description, if necessary to ensure
agreement as to the terms of the Securities to be purchased and
sold. Such a description might appropriately be in the form
which such features will be described in the Prospectus
Supplement for the offering.
ANNEX II
Pursuant to Section 7(e) of the Underwriting
Agreement, the accountants shall furnish letters to the
Underwriters to the effect that:
(i) They are independent certified public
accountants with respect to the Company and its subsidiaries
within the meaning of the Act and the applicable published
rules and regulations thereunder;
(ii) In their opinion, the consolidated
financial statements and financial schedules (and, if
applicable, prospective financial statements and/or pro
forma financial information) audited by them and included or
incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and
regulations;
(iii) On the basis of limited procedures, not
constituting an audit conducted in accordance with generally
accepted auditing standards, consisting of a reading of the
unaudited consolidated financial statements and other
information referred to below, a reading of the latest
available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest
audited consolidated financial statements included or
incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries who have
responsibility for financial and accounting matters and such
other inquiries and procedures (including those for a review
of interim financial information as described in SAS 71) as
may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) any material modifications should be
made to the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included or incorporated by
reference in the Company's Quarterly Report on Form
10-Q incorporated by reference in the Prospectus, for
them to be in conformity with generally accepted
accounting principles;
(B) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or
incorporated by reference in the Company's Quarterly
Reports on Form 10-Q, incorporated by reference in the
Prospectus, do not comply as to form in all material
respects with the applicable accounting requirements of
the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations;
(C) any unaudited pro forma condensed
consolidated financial statements included in or
incorporated by reference in the Prospectus do not
comply as to form in all material respects with the
applicable accounting requirements of Rule 11- 02 of
Regulation S-X and that the pro forma adjustments have
not been properly applied to the historical amounts in
the compilation of those statements;
(D) as of a specified date not more than
five days prior to the date of such letter, there was
any change in the capital stock, increase in long-term
debt, or any decreases in consolidated net current
assets or shareholder's equity of the Company and its
subsidiaries, or any decreases in consolidated net
sales or in the total per-share amounts of income
before extraordinary items of net income, or other
items specified by the representatives of the
Underwriters (the "Representatives"), or any increases
in any items specified by the Representatives, in each
case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in
the Prospectus, except in all instances for changes,
increases or decreases which the Prospectus
discloses have occurred may occur; and
(v) In addition to the examination referred to
in their report(s) included or incorporated by reference in
the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an
examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and
financial information specified by the Representatives
which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part
II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such
amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and
have found them to be in agreement.
All references in this Annex II to the Prospectus
shall be deemed to refer to the Prospectus (including the
documents incorporated by reference therein) as defined in the
Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter
and to the Prospectus as amended or supplemented (including the
documents incorporated by reference therein) in relation to the
applicable Designated Securities for purposes of the letter
delivered at the Time of Delivery for such Designated Securities.