Execution Version
$25,000,000
Atlas Financial Holdings, Inc.
6.625% Senior Unsecured Notes due 2022
Underwriting Agreement
April 21, 2017
Sandler O’Neill & Partners, L.P.
as Representative of the several Underwriters
named in Schedule I hereto,
c/o Sandler O’Neill & Partners, L.P.
1251 Avenue of the Americas, 6th Floor,
New York, New York 10022
Ladies and Gentlemen:
Atlas Financial Holdings, Inc., a Cayman Islands corporation (the “Company”), proposes
to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”), for
whom Sandler O’Neill & Partners, L.P. is acting as representative (the “Representative” or
“you”), $25,000,000 principal amount of its 6.625% Senior Unsecured Notes due 2022 (the
“Notes” and each a “Note”). The Notes will be issued pursuant to an Indenture and a
supplemental indenture, each to be dated as of April 26, 2017 (together, the “Indenture”),
between the Company and Wilmington Trust, National Association, as trustee (the “Trustee”).
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) a shelf registration statement on Form S-3
(Registration No. 333-195495), including each preliminary prospectus or prospectus included
therein, which registration statement has been declared effective by the Commission under the
Securities Act of 1933, as amended (the “Act”), and the Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “TIA”). Such registration statement covers the registration of the
Notes under the Act. Promptly after execution and delivery of this Agreement, the Company
will prepare a final prospectus supplement and file the final prospectus supplement and the Base
Prospectus (as hereinafter defined) in accordance with the provisions of Rule 430B (“Rule
430B”) of the rules and regulations of the Commission under the Act and paragraph (b) of Rule
424 (“Rule 424(b)”) of the rules and regulations under the Act. Any information included in
such final prospectus supplement or the Base Prospectus that was omitted from such registration
statement at the time it was declared effective but that is deemed to be part of and included in
such registration statement pursuant to Rule 430B is referred to as “Rule 430B Information.”
Each prospectus, together with the related prospectus supplement, used in connection with the
offering of the Notes that omitted the Rule 430B Information or that was captioned “Subject to
Completion” (or a similar caption) is herein called, together with the documents incorporated and
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deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, a
“preliminary prospectus,” and all references herein to any “preliminary prospectus” shall be
deemed to mean and include, without limitation, the Statutory Prospectus (as hereinafter defined)
and each preliminary prospectus included in the registration statement referred to above. Such
registration statement, at any given time, including the amendments thereto at such time, the
exhibits and any schedules thereto at such time, the documents incorporated and deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act at such time,
and the documents and information (including, without limitation, any Rule 430B Information)
otherwise deemed to be a part thereof or included therein by the rules and regulations under the
Act at such time, is herein called the “Registration Statement.” The prospectus contained in
the Company’s registration statement declared effective by the Commission on May 12, 2014
(the “Base Prospectus”) and the prospectus supplement dated April 21, 2017, relating to the
offering of the Notes, in the form first furnished to the Underwriters by the Company for use in
connection with the offering of the Notes (whether to meet the requests of purchasers pursuant to
Rule 173 under the rules and regulations under the Act or otherwise), including the documents
incorporated and deemed to be incorporated by reference therein pursuant to Item 12 of Form S-
3 under the Act at such time, are hereinafter called, collectively, the “Prospectus.” For purposes
of this Agreement, all references to the Registration Statement, any preliminary prospectus, the
Statutory Prospectus, the Prospectus, any Issuer-Represented Free Writing Prospectus (as
hereinafter defined) or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system (“EDGAR”).
In the event that the Company shall file a registration statement pursuant to Rule
462(b) under the Act (a “Rule 462(b) Registration Statement”) in connection with the offering
of the Notes, then, from and after the date of such filing, all references herein to the “Registration
Statement” shall be deemed to mean and include such Rule 462(b) Registration Statement,
mutatis mutandis, unless otherwise expressly stated or the context otherwise requires;
(ii) The Registration Statement was declared effective by the
Commission on May 12, 2014, and any Rule 462(b) Registration Statement will become
effective upon filing thereof with the Commission. No stop order suspending the effectiveness
of the Registration Statement has been issued under the Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company, are contemplated by
the Commission, and any request on the part of the Commission for additional information with
respect to the Registration Statement (or any document incorporated or deemed to be
incorporated therein by reference pursuant to the 1934 Act (as hereinafter defined)) has been
complied with;
(iii) At the time the Registration Statement was declared effective, at
each “new effective date” with respect to the Underwriters pursuant to Rule 430B(f)(2) of the
rules and regulations under the Act, and at the Time of Delivery (as hereinafter defined), the
Registration Statement and any amendments thereto complied, comply and will comply in all
material respects with the requirements of the Act and the rules and regulations thereunder and
the TIA, and did not, do not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
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At the time the Prospectus or any supplement thereto was issued and at the Time
of Delivery, neither the Prospectus nor any supplement thereto included, includes or will include
an untrue statement of a material fact or omitted, omits or will omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company by such Underwriter directly
or through the Representative and used therein, it being understood that the only such
information furnished by any Underwriter consists of the “Underwriters’ Information” as defined
in Section 9(a) hereof.
Each preliminary prospectus (including, without limitation, the Statutory
Prospectus) filed as part of the Registration Statement, or filed pursuant to Rule 424(b) under the
Act, complied when so filed (or, in the case of any preliminary prospectus or part thereof that
was not filed as part of the Registration Statement or pursuant to Rule 424(b), complied as of its
date), and each Prospectus and any supplements thereto filed pursuant to Rule 424(b) under the
Act complied when so filed (or, in the case of any Prospectus or supplement thereto that was not
filed pursuant to Rule 424(b), complied as of its date), in all material respects with the
requirements of the Act and the rules and regulations thereunder and each preliminary prospectus
(including, without limitation, the Statutory Prospectus) and the Prospectus and any amendments
or supplements thereto delivered to the Underwriters for use in connection with the offering of
the Notes (whether to meet requests of purchasers pursuant to Rule 173 under the rules and
regulations of the Act or otherwise) was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-
T;
(iv) As of the Applicable Time, neither (i) any Issuer-Represented
General Use Free Writing Prospectuses issued at or prior to the Applicable Time, the Final Term
Sheet and the Statutory Prospectus, all considered together (collectively, the “General
Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing
Prospectus issued at or prior to the Applicable Time, when considered together with the General
Disclosure Package, included any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company by such Underwriter
directly or through the Representative and used therein, it being understood that the only such
information furnished by any Underwriter consists of the “Underwriters’ Information” as defined
in Section 9(a) hereof. As used in this paragraph and elsewhere in this Agreement:
“Applicable Time” means 1:00 p.m. (Eastern time) on the date of this
Agreement.
“Final Term Sheet” means the final term sheet set forth on Schedule III hereto,
reflecting the final terms of the Notes.
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“Issuer-Represented Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Act (“Rule 433”), relating to the
Notes (including, without limitation, any such issuer free writing prospectus that
(i) is required to be filed with the Commission by the Company, (ii) is a “road
show that is a written communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission or (iii) is exempt from
filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Notes
or of the offering that does not reflect the final terms), in each case in the form
filed or required to be filed with the Commission or, if not required to be filed, in
the form retained in the Company’s records pursuant to Rule 433(g).
“Issuer-Represented General Use Free Writing Prospectus” means any Issuer-
Represented Free Writing Prospectus that is intended for general distribution to
prospective investors, as evidenced by its being specified in Schedule II to this
Agreement.
“Issuer-Represented Limited-Use Free Writing Prospectus” means any Issuer-
Represented Free Writing Prospectus that is not an Issuer-Represented General
Use Free Writing Prospectus.
“Statutory Prospectus” means, at any time, the Base Prospectus and the
preliminary prospectus supplement dated April 19, 2017, relating to the offering
of the Notes, in the form first furnished to the Underwriters by the Company for
use in connection with the offering of the Notes, including the documents
incorporated and deemed to be incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act at such time;
(v) Each Issuer-Represented Free Writing Prospectus, as of its issue
date and at all subsequent times through the completion of the public offer and sale of the Notes
or until any earlier date that the Company notified or notifies the Representative as described in
Section 5(b), did not, does not and will not include any information that conflicted, conflicts or
will conflict with the information contained in the Registration Statement; 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 directly or through the Representative expressly for use therein;
(vi) From the time of the initial filing of the Registration Statement
with the Commission (or, if earlier, the first date on which the Company engaged directly or
through any person authorized to act on its behalf in any Testing-the-Waters Communication)
through the date hereof, the Company has been and is an “emerging growth company,” as
defined in Section 2(a) of the Act (an “Emerging Growth Company”). The Company (A) has
not engaged in any Testing-the-Waters Communication and (B) has not authorized anyone other
than the Representative to engage in Testing-the-Waters Communications. The Company
reconfirms that the Representative has been authorized to act on its behalf in undertaking
Testing-the-Waters Communications. The Company has not distributed any Written Testing-
the-Waters Communications.
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“Testing-the-Waters Communication” means any oral or written
communication with potential investors undertaken in reliance on Section 5(d) of
the Act.
“Written Testing-the-Waters Communication” means any Testing-the-Waters
Communication that is a written communication within the meaning of Rule 405
under the Act;
(vii) The documents incorporated by reference in the Registration
Statement, the Prospectus and the General Disclosure Package, when they were filed with the
Commission, conformed in all material respects to the requirements of the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and none of such documents contained any untrue
statement of a material fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the Registration Statement, the
Prospectus or the General Disclosure Package, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the 1934 Act and will
not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading. The documents incorporated by reference in any preliminary prospectus or the
Prospectus conformed, and any further documents so incorporated will conform, when filed with
the Commission, in all material respects to the requirements of the 1934 Act or the Act, as
applicable, and the rules and regulations thereunder. The Company filed the Registration
Statement with the Commission before using any free writing prospectus and each free writing
prospectus was preceded or accompanied by the most recent preliminary prospectus satisfying
the requirements of Section 10 under the Act;
(viii) The Company has full right, power and authority to execute and
deliver this Agreement, the Notes and the Indenture and to perform its obligations hereunder and
thereunder;
(ix) This Agreement has been duly authorized, executed and delivered
by the Company, and constitutes a valid, legal, and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to indemnity hereunder may be limited
by federal or state securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally,
and subject to general principles of equity. The Company has full power and authority to enter
into this Agreement, the Notes and the Indenture and to authorize, issue and sell the Notes as
contemplated by this Agreement; and all action required to be taken for the due and proper
authorization, execution and delivery by it of this Agreement, the Notes and the Indenture and
the consummation by it of the transactions contemplated hereby has been duly and validly taken;
(x) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of this Agreement and
the consummation of the transactions herein contemplated (except such additional steps as may
be required by the Commission, the Nasdaq Stock Market LLC (“Nasdaq Stock Market”), the
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Financial Industry Regulatory Authority (“FINRA”) or such additional steps as may be
necessary to qualify the Notes for public offering by the Underwriters under state securities or
Blue Sky laws) has been obtained or made and is in full force and effect;
(xi) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in each of the General Disclosure
Package and 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 each of the General Disclosure Package and the Prospectus; and, since the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus, except as set forth or contemplated in the each of the
General Disclosure Package and the Prospectus, (A) there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in or affecting the
general affairs, management, business prospects, financial condition, shareholders’ equity or
results of operations of the Company and its subsidiaries taken as a whole (a “Material Adverse
Effect”), (B) there have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are material with respect
to the Company and its subsidiaries, taken as a whole, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of its capital stock;
(xii) No insurance agent appointed by the Company or any of its
subsidiaries has ceased selling insurance policies on behalf of the Company or its subsidiaries or
has indicated an interest in decreasing or ceasing the amount of insurance it sells on behalf of the
Company or its subsidiaries or otherwise modifying its relationship with the Company or its
subsidiaries, other than in the normal and ordinary course of business consistent with past
practices;
(xiii) All reinsurance treaties and similar arrangements (including
placement slips) to which the Company or any subsidiary is a party are in full force and effect
and neither the Company nor any subsidiary is in violation of, or in default in the performance,
observance or fulfillment of, any material obligation, agreement, covenant or condition contained
therein; neither the Company nor any subsidiary has received any notice from any of the other
parties to such treaties or arrangements that such other party intends not to perform such treaty or
arrangement and, to the knowledge of the Company, none of the other parties to such treaties or
arrangements will be unable to perform such treaty or arrangement except to the extent
adequately and properly reserved for in the audited historical financial statements of the
Company included in or incorporated by reference in the Registration Statement and the
Prospectus;
(xiv) Except as disclosed in each of the Registration Statement, General
Disclosure Package and the Prospectus, the Company and its subsidiaries have made no material
change in their insurance reserving practices since December 31, 2014;
(xv) The reserves reflected on the statutory statements of each of
American Country Insurance Company, American Service Insurance Company, Inc., Gateway
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Insurance Company and Global Liberty Insurance Company (collectively, the “Insurance
Subsidiaries”), as of the dates specified in such statements, (A) were computed in accordance
with presently accepted actuarial standards consistently applied and are fairly stated, in
accordance with sound actuarial principles; (B) were based on actuarial assumptions that produce
reserves at least as great as those called for in any contract provision as to reserve basis and
method, and are in accordance with all other contract provisions; (C) met the requirements of the
applicable insurance laws, rules and regulations of the State of Illinois or the State of Missouri,
as applicable, and are at least as great as the minimum aggregate amounts required by applicable
law; and (D) included provision for all actuarial reserves and related statement items which
should be established;
(xvi) The statutory financial statements of the Insurance Subsidiaries are
prepared for each relevant period in conformity with statutory accounting principles or practices
required or permitted by the National Association of Insurance Commissioners and by the
appropriate insurance department of the jurisdiction of domicile of each Insurance Subsidiary,
respectively, and such statutory accounting practices have been applied on a consistent basis
throughout the periods involved, except as may otherwise be indicated therein or in the notes
thereto, and present fairly in all material respects the statutory financial position of each
Insurance Subsidiary as of the dates thereof, and the statutory basis results of operations of each
Insurance Subsidiary for the periods covered thereby;
(xvii) The Company and each of its subsidiaries holds, and is operating
in compliance in all material respects with, all franchises, grants, authorizations, licenses,
including insurance licenses, permits, easements, consents, certificates and orders of any
governmental or self-regulatory body (including, without limitation, of the insurance regulatory
agencies of the various jurisdictions where it conducts its business) required for the conduct of
its business and all such franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect in all material respects; the
Company and each of its subsidiaries is in compliance in all material respects with all applicable
federal, state, provincial, local and foreign laws, regulations, orders and decrees; there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding or
investigation that would reasonably be expected to result in the revocation, termination or
suspension of any franchises, grants, authorizations, licenses, permits, easements, consents, or
certificates that would reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect; and no insurance regulatory agency or body has issued, or commenced
any proceeding for the issuance of, any order or decree impairing, restricting or prohibiting the
payment of dividends by a subsidiary to the Company, other than those restrictions under
statutory insurance laws and regulations governing the payment of dividends by the Company’s
subsidiaries described in each of the General Disclosure Package and the Prospectus;
(xviii) 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 each of the General Disclosure Package and 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,
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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; and the Company and its subsidiaries have valid and marketable rights to lease
or otherwise use all items of personal property material to the respective businesses of the
Company and its subsidiaries, free and clear of all material liens, encumbrances, claims and
defects;
(xix) The Company has been duly incorporated and is validly existing as
a financial services holding company in good standing under the laws of the Cayman Islands,
with power and authority (corporate and other) to own its properties and conduct its business as
described in each of the General Disclosure Package and the Prospectus, and 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, except where the failure to so qualify or be in good standing
does not have, and could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
(xx) Each subsidiary of the Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the jurisdiction of its
organization, with power and authority (corporate and other) to own its properties and conduct
its business as described in each of the General Disclosure Package and the Prospectus, and 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, except where the failure to so qualify
or be in good standing does not have, and could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; all of the issued shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are fully paid and
nonassessable and are owned, directly or through other subsidiaries of the Company, by the
Company, free and clear of any pledge, lien, encumbrance, claim or equity, except as described
in each of the General Disclosure Package and the Prospectus; the Company does not own or
control, directly or indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Company’s Form 10-K filed with the Commission on
March 13, 2017, as amended by the Company’s Form 10-K/A filed with the Commission on
March 22, 2017;
(xxi) The Company has an authorized capitalization as set forth in each
of the General Disclosure Package and the Prospectus under the caption “Capitalization,” and all
of the outstanding shares of capital stock of the Company have been duly and validly authorized
and issued, are fully paid and nonassessable, and have been issued in compliance with federal
and state securities laws and conform to the description of the capital stock contained in each of
the General Disclosure Package and the Prospectus; and no such shares were issued in violation
of the preemptive or similar rights of any security holder of the Company; and no person has any
preemptive or similar right to purchase any shares of capital stock or equity securities of the
Company. The Company does not and, immediately prior to the delivery of the Notes pursuant to
this Agreement, will not, have any debt securities or preferred stock that is rated 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);
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(xxii) The Notes have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided in the Indenture and paid for in
the manner set forth in this Agreement, will constitute valid and legally binding obligations of
the Company enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to the enforcement of creditors’ rights generally, and general equitable
principles relating to the availability of remedies, will be entitled to the benefits of the Indenture
and will conform to the description thereof contained in each of the Registration Statement, the
General Disclosure Package and the Prospectus.
(xxiii) The Indenture has been duly authorized by the Company and is
duly qualified under the TIA and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to enforcement of creditors’ rights generally, and general equitable
principles relating to the availability of remedies.
(xxiv) Except as described in the General Disclosure Package, the
execution and delivery of this Agreement, the Notes and the Indenture, the issue and sale of the
Notes by the Company, the compliance by the Company with all of the provisions of this
Agreement, the Notes and the Indenture, 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 contract, indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is subject (collectively, the
“Agreements and Instruments”), nor will any such action (A) result in any violation of the
provisions of the articles of incorporation or charter (as applicable) or by-laws of the Company
or any of its subsidiaries or any law, statute or any order, rule or regulation of any federal, state,
provincial, local or foreign court, arbitrator, regulatory authority or governmental agency or body
(each, a “Governmental Entity”) having jurisdiction over the Company or any of its
subsidiaries or any of their properties or (B) constitute a Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or other encumbrance upon any
assets or operations of the Company or any subsidiary pursuant to, any of the Agreements and
Instruments; and no consent, approval, authorization, order, registration or qualification of or
with any such Governmental Entity is required for the execution and delivery of this Agreement,
the Notes or the Indenture, the issue and sale of the Notes or the consummation by the Company
of the transactions contemplated by this Agreement, the Notes and the Indenture, except the
registration under the Act and the 1934 Act of the Notes, as may be required under the rules and
regulations of FINRA and the Nasdaq Stock Market 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 Notes by the Underwriters. As
used herein, a “Repayment Event” means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary;
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(xxv) Neither the Company nor any of its subsidiaries is (A) in violation
of its memorandum of association, articles of association or incorporation, as applicable, charter,
by-laws or other organizational documents, or (B) except as described in the General Disclosure
Package, in material default in the performance or observance of any obligation, agreement,
covenant or condition contained in any of the Agreements and Instruments;
(xxvi) The statements set forth in each of the General Disclosure Package
and the Prospectus under the caption “Description of the Notes,” insofar as they purport to
constitute a summary of the terms of the Notes, and under the caption “Underwriting”, insofar as
they purport to describe the provisions of the laws and documents referred to therein, are
accurate and complete in all material respects;
(xxvii) The financial statements included or incorporated by reference in
each of the Registration Statement, the General Disclosure Package and the Prospectus, together
with the supporting schedules, if any, and notes, present fairly the consolidated financial
condition of the Company and its subsidiaries at the dates indicated and the consolidated results
of operations and cash flows of the Company and its subsidiaries for the periods specified. Such
financial statements and supporting schedules, if any, have been prepared in conformity with
generally accepted accounting principles in the United States (“GAAP”) applied on a consistent
basis throughout the periods involved. The selected financial data and the summary financial
information included or incorporated by reference in each of the Registration Statement, the
General Disclosure Package and the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial statements included in
the Registration Statement, the General Disclosure Package and the Prospectus. The pro forma
financial statements and the related notes thereto, if any, included in the Registration Statement,
the General Disclosure Package and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission’s rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and circumstances referred to therein.
Except as set forth therein, no pro forma financial statements are required to be included in the
Registration Statement, the General Disclosure Package and the Prospectus under the Act, the
rules and regulations thereunder or GAAP;
(xxviii) The Company and its subsidiaries maintain systems of “internal
control over financial reporting” (as defined in Rule 13a-15(f) of the 1934 Act) that comply with
the requirements of the 1934 Act and have been designed by, or under the supervision of, their
respective principal executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted
accounting principles, including, but not limited to, a system of accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in accordance with the
management’s general or specific authorization, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (C) access to assets is permitted only in accordance with the management’s
general or specific authorization and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
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differences; except as disclosed in the Registration Statement, the General Disclosure Package
and the Prospectus, there are no material weaknesses in the Company’s internal controls; the
Company’s auditors and the Audit Committee of the Board of Directors of the Company have
been advised of: (i) all significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which have adversely affected or are
reasonably likely to adversely affect the Company’s ability to record, process, summarize and
report financial information; and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s internal controls
over financial reporting;
(xxix) The Company has established and maintains an effective system of
“disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) and 15d-15(e)
under the 1934 Act). Such disclosure controls and procedures (A) are designed to ensure that
material information relating to the Company, including its consolidated subsidiaries, is made
known to the Company’s chief executive officer and its chief financial officer by others within
those entities to allow timely decisions regarding disclosures, (B) have been evaluated for
effectiveness as of the end of the most recent fiscal quarter and (C) are effective to perform the
functions for which they were established. The Company’s independent registered public
accounting firm and the Audit Committee of the Board of Directors of the Company have been
advised of (1) any significant deficiencies or material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the
Company’s ability to record, process, summarize, and report financial data and (2) any fraud,
whether or not material, that involves management or other employees who have a role in the
Company’s internal control over financial reporting. Since the date of the most recent evaluation
of such disclosure controls and procedures, there have been no changes in internal control over
financial reporting that have materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting;
(xxx) Except for restrictions on writing new insurance business in the
state of Connecticut or as described in the Registration Statement, the General Disclosure
Package and the Prospectus, neither the Company nor any of its subsidiaries is subject or is party
to, or has received any notice or advice that any of them may become subject or party to any
investigation with respect to, any corrective, suspension or cease-and-desist order, agreement,
consent agreement, memorandum of understanding or other regulatory enforcement action,
proceeding or order with or by, or is a party to any commitment letter or similar undertaking to,
or is subject to any directive by, or has been a recipient of any supervisory letter from, or has
adopted any board resolutions at the request of, any Regulatory Agency (as defined below) that
currently relates to or restricts in any material respect the conduct of their business or that in any
manner relates to their capital adequacy, credit policies or management (each, a “Regulatory
Agreement”), nor has the Company or any of its subsidiaries been advised by any Regulatory
Agency that it is considering issuing or requesting any such Regulatory Agreement. Except as
described in the Registration Statement, the General Disclosure Package and the Prospectus, the
Company and its subsidiaries are each in substantial compliance with all Regulatory
Agreements, and there is no unresolved violation, criticism or exception by any Regulatory
Agency with respect to any report or statement relating to any examinations of the Company or
any of its subsidiaries which, in the reasonable judgment of the Company, is expected to result in
a Material Adverse Effect. As used herein, the term “Regulatory Agency” means any
12
Governmental Entity having supervisory or regulatory authority with respect to the Company or
any of its subsidiaries, including, but not limited to, any federal or state agency charged with the
supervision or regulation of depositary institutions or holding companies of depositary
institutions, or engaged in the insurance of depositary institution deposits;
(xxxi) Except as disclosed in each of the General Disclosure Package and
the Prospectus, the Company and its subsidiaries are conducting their respective businesses in
compliance with all statutes, laws, rules, regulations, judgments, decisions, directives, orders and
decrees of any Governmental Entity applicable to them, except where the failure to so comply
would not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect;
(xxxii) Other than as set forth in each of the General Disclosure Package
and the Prospectus, there are no legal or governmental actions, suits, investigations or
proceedings before or by any Governmental Entity, now pending or, to the best of the
Company’s knowledge, threatened or contemplated by Governmental Entities or threatened by
others, to which the Company or any of its subsidiaries is a party or of which any property or
asset of the Company or any of its subsidiaries is the subject (A) that are required to be disclosed
in the Registration Statement by the Act or by the rules and regulations of the Commission
thereunder and not disclosed therein or (B) which, if determined adversely to the Company or
any of its subsidiaries, would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and there are no contracts or documents of the Company or any of its
subsidiaries that are required to be described in the Registration Statement or to be filed as
exhibits thereto by the Act or by the rules and regulations of the Commission thereunder which
have not been so described and filed;
(xxxiii)Each of the Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”)
issued by the appropriate federal, state, provincial, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by the Company or its subsidiaries; the
Company and its subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force and effect would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be
expected to result in a Material Adverse Effect;
(xxxiv)The Company and its subsidiaries (a) are, and at all times since
December 31, 2012 were, in compliance with any and all applicable federal, state, provincial,
local and foreign laws, rules, regulations, requirements, decisions, judgments, decrees, orders
and the common law relating to pollution or the protection of the environment, natural resources
or human health or safety, including those relating to the generation, storage, treatment, use,
handling, transportation, Release (as defined below) or threat of Release of Hazardous Materials
13
(as defined below) (collectively, “Environmental Laws”), (b) have received and are in
compliance with all permits, licenses, certificates or other authorizations or approvals required of
them under applicable Environmental Laws to conduct their respective businesses, (c) have not
received notice of any actual or potential liability under or relating to, or actual or potential
violation of, any Environmental Laws, including for the investigation or remediation of any
Release or threat of Release of Hazardous Materials, and have no knowledge of any event or
condition that would reasonably be expected to result in any such notice, (d) are not conducting
or paying for, in whole or in part, any investigation, remediation or other corrective action
pursuant to any Environmental Law at any location, and (e) are not a party to any order, decree
or agreement that imposes any obligation or liability under any Environmental Law, and there
are no costs or liabilities associated with Environmental Laws of or relating to the Company or
its subsidiaries, except for any such matter, as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and except as described in the
Registration Statement, the General Disclosure Package and the Prospectus, (a) there are no
proceedings that are pending, or that are known to be contemplated, against the Company or any
of its subsidiaries under any Environmental Laws in which a governmental entity is also a party,
other than such proceedings regarding which it is reasonably believed no monetary sanctions of
$100,000 or more will be imposed, (b) the Company and its subsidiaries are not aware of any
facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations
under Environmental Laws, including the Release or threat of Release of Hazardous Materials,
that could reasonably be expected to have a Material Adverse Effect and (c) none of the
Company and its subsidiaries anticipates material capital expenditures relating to any
Environmental Laws;
(xxxv) There has been no storage, generation, transportation, use,
handling, treatment, Release or threat of Release of Hazardous Materials by, relating to or caused
by the Company or any of its subsidiaries (or, to the knowledge of the Company and its
subsidiaries, any other entity (including any predecessor) for whose acts or omissions the
Company or any of its subsidiaries is or could reasonably be expected to be liable) at, on, under
or from any property or facility now or previously owned, operated or leased by the Company or
any of its subsidiaries, or at, on, under or from any other property or facility, in violation of any
Environmental Laws or in a manner or amount or to a location that could reasonably be expected
to result in any liability to the Company under any Environmental Law, except for any violation
or liability which would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. “Hazardous Materials” means any material, chemical, substance,
waste, pollutant, contaminant, compound, mixture, or constituent thereof, in any form or amount,
including petroleum (including crude oil or any fraction thereof) and petroleum products, natural
gas liquids, asbestos and asbestos containing materials, naturally occurring radioactive materials,
brine, and drilling mud, regulated or which can give rise to liability under any Environmental
Law. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or
migrating in, into or through the environment, or in, into, from or through any building or
structure;
(xxxvi)The statistical and market related data contained in each of the
General Disclosure Package, the Prospectus and the Registration Statement are based on or
derived from sources which the Company believes are reliable and accurate;
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(xxxvii) Neither the Company nor any affiliate of the Company nor
any person acting on their behalf has taken, nor will the Company or any affiliate or any person
acting on their behalf take, directly or indirectly, any action which is designed to or which has
constituted or which would be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the Notes;
(xxxviii) The Company is not and, after giving effect to the offering
and sale of the Notes, and after receipt of payment for the Notes and the application of such
proceeds as described in each of the General Disclosure Package and the Prospectus, will not be
an “investment company” or an entity “controlled” by an “investment company”, as such terms
are defined in the Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder;
(xxxix)Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within the meaning of
Section 517.075, Florida Statutes;
(xl) BDO USA, LLP, who has certified the financial statements and
supporting schedules of the Company and its subsidiaries, included in the Registration
Statement, the General Disclosure Package and the Prospectus, is an independent registered
public accounting firm as required by the Act and the 1934 Act, the rules and regulations of the
Commission and the Public Company Accounting Oversight Board thereunder, and such
accountants are not in violation of the auditor independence requirements of the Sarbanes-Oxley
Act of 2002 with respect to the Company;
(xli) No labor problem or dispute with the employees of the Company
or any of its subsidiaries exists or, to the Company’s knowledge, is threatened or imminent, and
the Company is not aware of any existing or imminent labor disturbance by the employees of any
of its or its subsidiaries’ principal suppliers, contractors or customers, that could have a Material
Adverse Effect, whether or not arising from transactions in the ordinary course of business,
except as set forth in each of the General Disclosure Package and the Prospectus;
(xlii) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary in the business in which they are engaged; all policies of insurance
insuring the Company or any of its subsidiaries are in full force and effect; the Company and its
subsidiaries are in compliance with the terms of such policies and instruments in all material
respects; and there are no claims by the Company or any of its subsidiaries under any such policy
or instrument as to which any insurance company is denying liability or defending under a
reservation of rights clause; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; neither the Company not any of its subsidiaries has
received notice from any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made to continue such insurance; and neither the
Company nor any such subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a cost that would not have a
15
Material Adverse Effect, except as set forth or contemplated in each of the General Disclosure
Package and the Prospectus;
(xliii) The Company has filed all material foreign, federal, state and local
tax returns that are required to be filed or is eligible for, and has requested, extensions thereof,
except as set forth or contemplated in each of the General Disclosure Package and the Prospectus
and has paid all material taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or except as set forth or
contemplated in each of the General Disclosure Package and the Prospectus;
(xliv) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other distribution on
such subsidiary’s capital stock, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary’s property or assets to
the Company or any other subsidiary of the Company, except as set forth or contemplated in
each of the General Disclosure Package and the Prospectus;
(xlv) Each “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company,
any of its subsidiaries or their “ERISA Affiliates” (as defined below) has been maintained in
compliance with its terms and the requirements of any applicable statutes, orders, rules and
regulations, including with ERISA and the Code (defined below); “ERISA Affiliate” means,
with respect to the Company or any subsidiary, any member of any group of organizations
described in Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the “Code”) of which the Company
or such subsidiary is a member; no prohibited transaction, within the meaning of Section 406 of
ERISA or Section 4975 of the Code, has occurred with respect to any “employee benefit plan”
excluding transactions effected pursuant to a statutory or administrative exemption that could
reasonably be expected to result in a material liability to the Company or its subsidiaries; no
“reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any “employee benefit plan” established or maintained by the Company, any of
its subsidiaries or any of their ERISA Affiliates; no “employee benefit plan” established or
maintained by the Company, any of its subsidiaries or any of their ERISA Affiliates, if such
“employee benefit plan” were terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA); none of the Company, its subsidiaries nor any of their
ERISA Affiliates has incurred or reasonably expects to incur any liability under (A) Title IV of
ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (B)
Sections 412, 4971, 4975 or 4980B of the Code; each “employee benefit plan” established or
maintained by the Company, any of its subsidiaries or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss of such qualification;
there is no pending audit or investigation by the Internal Revenue Service, the Department of
Labor, the Pension Benefit Guaranty Corporation or any other governmental agency or any
foreign regulatory agency with respect to any “employee benefit plan” that could reasonably be
expected to result in material liability to the Company or its subsidiaries; none of the following
16
events has occurred or is reasonably likely to occur: (x) a material increase in the aggregate
amount of contributions required to be made to all “employee benefit plans” by the Company or
its subsidiaries in the current fiscal year of the Company and its subsidiaries compared to the
amount of such contributions made in the Company and its subsidiaries’ most recently
completed fiscal year; or (y) a material increase in the Company and its subsidiaries’
“accumulated post-retirement benefit obligations” (within the meaning of Statement of Financial
Accounting Standards 106) compared to the amount of such obligations in the Company and its
subsidiaries’ most recently completed fiscal year;
(xlvi) The Company and its subsidiaries own, or have valid, binding
enforceable and sufficient licenses or other rights to use, the patents and patent applications,
copyrights, trademarks, service marks, trade names, technology, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary rights) and other intellectual
property necessary or used in any material respect to conduct their business in the manner in
which it is being conducted and in the manner in which it is contemplated as set forth in each of
the General Disclosure Package and the Prospectus or otherwise necessary or used in connection
with the commercialization of the existing products of the Company and its subsidiaries and the
products described in each of the General Disclosure Package and the Prospectus as being under
development (collectively, the “Company Intellectual Property”); except as would not
reasonably be expected to have a Material Adverse Effect, the Company Intellectual Property is
valid, subsisting and enforceable; the Company and its subsidiaries, and to the Company’s
knowledge, their licensors, have complied with the duty of candor and disclosure of the Patent
and Trademark Office and any similar foreign intellectual property office (collectively, the
“Patent Offices”); to the Company’s knowledge, neither the Company nor its subsidiaries have
infringed or otherwise violated any intellectual property rights of any third person or have
breached any contract in connection with which any Company Intellectual Property is provided
to the Company and its subsidiaries; neither the Company nor any of its subsidiaries is obligated
to pay a royalty, grant a license, or provide other consideration to any third party in connection
with the Company Intellectual Property other than as disclosed in each of the General Disclosure
Package and the Prospectus; no person has asserted or threatened to assert any claim against, or
notified, the Company (or any of its subsidiaries) that (A) the Company or any of its subsidiaries
has infringed or otherwise violated any intellectual property rights of any third person, (B) the
Company or any of its subsidiaries is in breach or default of any contract under which any
Company Intellectual Property is provided, (C) such person will terminate a contract described in
clause (B) or adversely alter the scope of the rights provided thereunder or (D) otherwise
concerns the ownership, enforceability, validity, scope, registrability, interference, use or the
right to use, any Company Intellectual Property (other than a Patent Office review of pending
applications in the ordinary course) in each such case as would reasonably be expected to have a
Material Adverse Effect; to the knowledge of the Company no third party is infringing or
otherwise violating any of the Company Intellectual Property owned by the Company or any of
its subsidiaries, except as would not reasonably be expected to have a Material Adverse Effect;
(xlvii) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its subsidiaries has (A) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to
political activity; (B) made any direct or indirect unlawful payment to any foreign or domestic
17
government official or employee; (C) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or (D) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment;
(xlviii) To the knowledge of the Company, no director, officer, agent,
employee or other person associated with or acting on behalf of the Company or any of its
subsidiaries made any payment of funds to the Company or any of its subsidiaries or received or
retained funds in violation of any law, rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in each of the General Disclosure Package and the
Prospectus, that is not described in each of the General Disclosure Package and the Prospectus as
required;
(xlix) The operations of the Company and its subsidiaries are and have
been conducted at all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened;
(l) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries, on the one hand, and the directors, officers, shareholders,
customers or suppliers of the Company or any of its subsidiaries, on the other, that is required by
the Act to be described in each of the General Disclosure Package and the Prospectus and that is
not so described;
(li) Except as described in each of the General Disclosure Package and
the Prospectus, there are no material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), or any other relationships with unconsolidated entities or
other persons, that may have a material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or expenses;
(lii) The Company and, to the knowledge of the Company, each of the
Company’s directors and officers, in their capacities as such, is in compliance with the
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission
thereunder applicable to it; and the Company is in compliance with the applicable rules and
regulations of the Nasdaq Stock Market;
(liii) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement) that would
give rise to a valid claim against the Company or any of its subsidiaries or the Underwriters for a
brokerage commission, finder’s fee or like payment in connection with the offering and sale of
the Notes;
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(liv) The information contained in the Registration Statement and the
Prospectus regarding the Company’s expectations, plans and intentions, and any other
information that constitutes “forward-looking” information within the meaning of the Act and
the 1934 Act were made by the Company on a reasonable basis and reflect the Company’s good
faith belief or estimate of the matters described therein;
(lv) Any certificate signed by any officer of the Company and
delivered to the Representative or counsel for the Underwriters in connection with the offering of
the Notes contemplated hereby shall be deemed a representation and warranty by the Company
to each Underwriter and shall be deemed to be a part of this Section 1 and incorporated herein by
this reference;
(lvi) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of indebtedness by the
Company to or for the benefit of any of the officers or directors of the Company or any of their
respective family members, except as disclosed in the Prospectus and the General Disclosure
Package; the Company has not directly or indirectly extended or maintained credit, arranged for
the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for
any director or executive officer of the Company;
(lvii) Neither the Company nor any of its affiliates has, prior to the date
hereof, made any offer or sale of any securities which could be “integrated” for purposes of the
Act or the rules and regulations promulgated thereunder with the offer and sale of the Notes
pursuant to the Registration Statement; and except as disclosed in the Prospectus and the General
Disclosure Package, neither the Company nor any of its affiliates has sold or issued any security
during the six-month period preceding the date of the Prospectus, including but not limited to
any sales pursuant to Rule 144A or Regulations D or S under the Act, other than Ordinary Shares
issued pursuant to employee benefit plans, qualified stock option plans or the employee
compensation plans or pursuant to outstanding options, rights or warrants as described in the
Prospectus and the General Disclosure Package;
(lviii) The Company has, or will have by the Time of Delivery, applied
for listing of the Notes on the NASDAQ Global Market (“NASDAQ”);
(lix) None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any sanctions administered by the Office of Foreign Assets
Control of the Department of the Treasury (“OFAC”); and the Company will not, directly or
indirectly, use the proceeds of the offering of the Notes hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently subject to any
sanctions administered by OFAC;
(lx) At the time of filing the Registration Statement and any post-
effective amendment thereto, at the earliest time thereafter that the Company or any offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the
19
Notes and at the date hereof, the Company was not and is not an “ineligible issuer” as defined in
Rule 405 under the Act;
(lxi) With respect to the stock options (the “Stock Options”) granted
pursuant to the stock-based compensation plans of the Company and its subsidiaries (the
“Company Stock Plans”), (i) each Stock Option intended to qualify as an “incentive stock
option” under Section 422 of the Code so qualifies, (ii) each grant of a Stock Option was duly
authorized no later than the date on which the grant of such Stock Option was by its terms to be
effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval
by the Board of Directors of the Company (or a duly constituted and authorized committee
thereof) and any required shareholder approval by the necessary number of votes or written
consents, and the award agreement governing such grant (if any) was duly executed and
delivered by each party thereto, (iii) each such grant was made in accordance with the terms of
the Company Stock Plans, the 1934 Act and all other applicable laws and regulatory rules or
requirements, including the rules of the Nasdaq Stock Market and any other exchange on which
Company securities are traded, and (iv) each such grant was properly accounted for in
accordance with GAAP in the financial statements (including the related notes) of the Company
and, if required, disclosed in the Company's filings with the Commission in accordance with the
1934 Act and all other applicable laws. The Company has not knowingly granted, and there is no
and has been no policy or practice of the Company of granting, Stock Options prior to, or
otherwise coordinating the grant of Stock Options with, the release or other public announcement
of material information regarding the Company or its subsidiaries or their results of operations or
prospects; and
(lxii) The Trustee will, at the Time of Delivery, be the duly appointed
trustee with respect to the Notes.
2. Subject to the terms and conditions herein set forth, 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, the respective principal amount of the Notes set forth
opposite such Underwriter’s name on Schedule I hereto at a purchase price equal to 96.85% of
the principal amount thereof plus accrued interest, if any, from April 21, 2017 to the Time of
Delivery.
It is understood that each Underwriter has authorized the Representative, for such
Underwriter’s account, to accept delivery of, receipt for, and make payment of the purchase price
for, the Notes which such Underwriter has agreed to purchase. Sandler O’Neill & Partners, L.P.,
individually and not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Notes to be purchased by any Underwriter whose
funds have not been received by the Representative by the relevant Time of Delivery but such
payment shall not relieve such Underwriter from its obligations hereunder.
3. Upon the authorization by you of the release of the Notes, the several
Underwriters propose to offer the Notes for sale upon the terms and conditions set forth in the
Prospectus.
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4. (a) Payment for the Notes shall be made by wire transfer of immediately
available funds to the account(s) specified by the Company to the Representative against
delivery to the nominee of The Depository Trust Company (“DTC”), for the account of each
Underwriter, of one or more global notes representing the Notes (collectively, the “Global
Notes”), with any transfer or other taxes payable in connection with the sale of the Notes duly
paid by the Company. The Company will cause the Global Notes to be made available for
checking at least twenty-four hours prior to the Time of Delivery with respect thereto. The time
and date of such delivery and payment shall be 9:30 a.m., Eastern Time, on April 26, 2017 or
such other time and date as the Representative and the Company may agree upon in writing.
Such time and date for delivery of the Notes is herein called the “Time of Delivery.”
(b) The documents to be delivered at the Time of Delivery by or on behalf of
the parties hereto pursuant to Section 8 hereof, including the cross receipt for the Notes and any
additional documents requested by the Underwriters pursuant hereto, will be delivered at the
offices of Mayer Brown LLP (the “Closing Location”). A meeting will be held at the Closing
Location at 3:00 p.m., Eastern Time, on the Business Day next preceding such Time of Delivery,
at which meeting the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes of this Agreement,
“Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in New York and Toronto are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file the
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 this Agreement, or,
if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or the Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to advise you, 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 and to furnish you with copies thereof; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any preliminary prospectus, Issuer-Represented Free Writing
Prospectus or Prospectus, of the suspension of the qualification of the Notes 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, any preliminary prospectus, any Issuer-Represented Free Writing Prospectus or
Prospectus or for additional information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any preliminary prospectus, Issuer-Represented
Free Writing Prospectus or Prospectus or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order;
(b) If at any time following issuance of an Issuer-Represented Free Writing
Prospectus there occurred or occurs an event or development as a result of which such Issuer-
Represented Free Writing Prospectus conflicted or would conflict with the information contained
21
in the Registration Statement or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the
Company has notified or will notify promptly the Representative so that any use of such Issuer-
Represented Free Writing Prospectus may cease until it is amended or supplemented and the
Company has promptly amended or will promptly amend or supplement such Issuer-Represented
Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission;
provided, however, that this covenant 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 directly or through the Representative expressly for use therein;
(c) The Company represents and agrees that, unless it obtains the prior written
consent of the Representative, and each Underwriter represents and agrees that, unless it obtains
the prior written consent of each of the Company and the Representative, it has not made and
will not make any offer relating to the Notes that would constitute an “issuer free writing
prospectus,” as defined in Rule 433 under the Act, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405 under the Act, required to be filed with the
Commission or retained by the Company under Rule 433. Any such free writing prospectus
consented to by the Company and the Representative is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents that it has treated or agrees that it will treat
each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule
433, and has complied and will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely filing with the Commission where required,
legending and record keeping.
(d) Promptly from time to time to take such action as you may reasonably
request to qualify the Notes for offering and sale under the securities laws of such jurisdictions as
you 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 Notes, 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;
(e) Prior to 10:00 a.m., Eastern Time, on the Business Day next succeeding
the date of this Agreement and from time to time, to furnish the Underwriters, without charge,
copies of the Prospectus in New York City in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at any time prior to the
expiration of the period when a prospectus relating to the Notes is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the Act 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 period to amend or supplement the Prospectus in order to comply with the
Act, to notify you and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you 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, and in case any Underwriter is
22
required to deliver a prospectus in connection with sales of any of the Notes at any time nine
months or more after the time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(f) To make generally available to its securityholders 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) under the Act), 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 thereunder (including, at the option of the Company, Rule 158);
(g) During the period beginning from the date hereof and continuing to and
including the Business Day following the Time of Delivery, the Company will not, and will not
permit any subsidiary to, without the prior written consent of the Representative, offer, sell,
contract to sell or otherwise dispose of any debt securities or nonconvertible preferred stock
issued or guaranteed by the Company or any of its subsidiaries;
(h) To file with the Commission, within the time limits required under the Act
and the rules and regulations thereunder (or that would be required, in the event the Company is
not required to make such filings), after the end of each fiscal year, an annual report (including a
balance sheet and statements of income, shareholders’ equity and cash flows of the Company
and its consolidated subsidiaries certified by an independent registered public accounting firm)
and, as soon as practicable after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the Registration Statement),
to make available to its shareholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail;
(i) During a period of three years from the effective date of the Registration
Statement, to furnish to you copies of all reports or other communications (financial or other)
furnished to shareholders, and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission, or any national or
international securities exchange on which any class of securities of the Company is listed; and
(ii) such additional information concerning the business and financial condition of the Company
as you 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 shareholders generally or to the Commission);
(j) To use the net proceeds received by it from the sale of the Notes pursuant
to this Agreement in the manner specified in each of the General Disclosure Package and the
Prospectus under the caption “Use of Proceeds”;
(k) If the Company elects to rely on Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by
10:00 p.m., Washington, D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111
under the Act;
23
(l) To use its best efforts to effect and maintain the listing of the Notes on
NASDAQ;
(m) To comply with the letter of representation of the Company, and any
riders thereto, to DTC relating to the approval of the Notes by DTC for “book-entry” transfer;
(n) To comply, and to use its best efforts to cause the Company’s directors
and officers, in their capacities as such, to comply, in all material respects, with all effective
applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
thereunder; and
(o) The Company will promptly notify the Representative if the Company
ceases to be an Emerging Growth Company at any time prior to completion of the distribution of
the Notes within the meaning of the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the reasonable out-of-pocket expenses
incurred by the Underwriters in connection with the transactions contemplated hereby
(regardless of whether the sale of the Notes is consummated), including, without limitation,
disbursements, fees and expenses of the Underwriters’ counsel and marketing, syndication and
travel expenses not to exceed $125,000 in the aggregate without the Company’s consent; (ii) the
fees, disbursements and expenses of the Company’s counsel and accountants in connection with
the registration of the Notes under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any preliminary prospectus, any
Permitted Free Writing Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and dealers; (iii) the cost of
printing or producing any agreement among Underwriters, this Agreement, closing documents
(including any compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Notes; (iv) all fees and expenses in connection with listing the
Notes on NASDAQ; (v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by FINRA of the terms of the
sale of the Notes in an amount not to exceed $10,000; (vi) the cost and charges of the Trustee
(including its counsel); and (vii) all other costs and expenses incident to the performance of the
Company’s obligations hereunder which are not otherwise specifically provided for in this
Section 6.
7. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) any stamp and other duties and stock and
other transfer taxes, if any, payable upon the sale of the Notes to the Underwriters and their
transfer between the Underwriters pursuant to an agreement between such Underwriters, and (ii)
the fees and disbursements of their counsel and other advisors in connection with the transactions
contemplated hereby.
8. The obligations of the Underwriters hereunder, as to the Notes to be delivered at
the Time of Delivery, shall be subject, in their discretion, to the condition that all representations
and warranties and other statements of the Company herein are, at and as of such Time of
24
Delivery, 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 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 (or a post-effective
amendment shall have been filed and declared effective in accordance with the requirements of
Rule 430A); the Final Term Sheet and any other material required to be filed by the Company
pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the
applicable time periods prescribed in such filings by Rule 433; if the Company has elected to
rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have become effective by
10:00 p.m., Eastern Time, on the date of this Agreement; 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; all
requests for additional information on the part of the Commission shall have been complied with
to your reasonable satisfaction; and FINRA shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements;
(b) The Representative shall have received satisfactory evidence of the good
standing of the Company and its subsidiaries in their respective jurisdictions of organization and
their good standing as foreign entities in such other jurisdictions as the Representative may
reasonably request, in each case in writing or any standard form of telecommunication from the
appropriate governmental authorities of such jurisdictions;
(c) Mayer Brown LLP, counsel for the Underwriters, shall have furnished to
you their written opinion, dated such Time of Delivery, with respect to such matters as the
Representative 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;
(d) Conyers Dill & Pearman, Cayman counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect set forth in Annex I-A hereto and to such further effect as the
Representative may reasonably request;
(e) DLA Piper LLP (US), United States special securities counsel for the
Company, shall have furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect set forth in Annex I-B hereto and to such
further effect as the Representative may reasonably request;
(f) On the date of the Prospectus, at a time prior to the execution of this
Agreement, at 9:30 a.m., Eastern Time, on the effective date of any post-effective amendment to
the Registration Statement filed subsequent to the date of this Agreement and also at the Time of
Delivery, BDO USA, LLP shall have furnished to you a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to you;
(g) (i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included in each of the General
25
Disclosure Package and the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which information is
given in each of the General Disclosure Package and the Prospectus, there shall not have been
any change in the capital stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or affecting the general
affairs, management, financial condition, shareholders’ equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated in each of the General
Disclosure Package and the Prospectus, the effect of which, in any such case described in Clause
(i) or (ii) above, is in the judgment of the Representative so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery of the Notes
being delivered at such Time of Delivery on the terms and in the manner contemplated in each of
the General Disclosure Package and the Prospectus;
(h) As of the date hereof, A.M. Best Company has assigned a financial
strength rating of American Country Insurance Company, American Service Insurance
Company, Inc. and Gateway Insurance Company as “B” with an outlook of “Stable” and a
financial strength rating of Global Liberty Insurance Company as “B+” with an outlook of
“Negative.” On or after the date hereof (i) no downgrading or other negative development shall
have occurred in the rating accorded the Company’s or any of the Insurance Subsidiaries’
financial strength by A.M. Best Company or any other “nationally recognized statistical rating
organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act (whether or not such negative development has been publicly announced by A.M. Best
Company), and (ii) except as described in the General Disclosure Package and the Prospectus, 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 or any of its Insurance
Subsidiaries’ financial strength;
(i) On or after the date hereof 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 or on the Nasdaq Stock Market; (ii) a suspension or material limitation in
trading in the Company’s securities on the NASDAQ; (iii) a general moratorium on commercial
banking activities declared by either Federal or New York State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by the United States of a
national emergency or war or a material adverse change in general economic, political or
financial conditions, including without limitation as a result of terrorist activities after the date
hereof, or any other calamity or crisis, if the effect of any such event specified in this clause (iv)
in the judgment of the Representative makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(j) The Company shall have complied with the provisions of Section 5(e)
hereof with respect to the furnishing of prospectuses on the Business Day next succeeding the
date of this Agreement;
26
(k) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to you certifying that
the representations and warranties of the Company herein at and as of such Time of Delivery are
true and correct with the same force and effect as though expressly made at the Time of
Delivery, that the Company has performed all of its obligations hereunder to be performed at or
prior to such Time of Delivery, that each of the conditions set forth in subsections (a), (h) and (j)
of this Section has been satisfied, that none of the events or circumstances contemplated by
subsection (g) of this Section have occurred, and as to such other matters as you may reasonably
request;
(l) At the Time of Delivery, the Global Notes shall be eligible for clearance,
settlement and trading in book-entry form through the facilities of DTC;
(m) On the date of the Prospectus, at a time prior to the execution of this
Agreement, at 9:30 a.m., Eastern Time, on the effective date of any post-effective amendment to
the Registration Statement filed subsequent to the date of this Agreement and also at the Time of
Delivery, the Company shall have furnished to you a certificate executed by the Company’s
Chief Financial Officer, in form and substance reasonably satisfactory to you, certifying to the
representations set forth therein with respect to the circled financial information and data
attached to such certificate; and
(n) All proceedings taken by the Company in connection with the issuance
and sale of the Notes as herein contemplated shall be satisfactory in form and substance to the
Representative.
9. (a) (i) The Company shall indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which they or any of them
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 (A) any preliminary prospectus, the
Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer-
Represented Limited-Use Free Writing Prospectus, when considered together with the General
Disclosure Package, or any amendment or supplement thereto, or (B) any materials or
information provided to investors by, or with the approval of, the Company in connection with
the marketing of the offering of the Notes, including any roadshow or investor presentations
made to investors by the Company (whether in person or electronically), or, in each of cases (A)
and (B), 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 such indemnified party for any legal or other expenses
reasonably incurred by them 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, the Registration Statement, the General Disclosure Package, the
Prospectus or any individual Issuer-Represented Limited-Use Free Writing Prospectus or in any
written materials provided to investors by the Underwriters in connection with the marketing of
the offering of the Notes, including any roadshow or investor presentations made to investors
27
(whether in person or electronically), when considered together with the General Disclosure
Package, or any such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company by any Underwriter directly or through the Representative
and used therein (provided that the Company and the Underwriters hereby acknowledge and
agree that the only information that the Underwriters have furnished to the Company specifically
for inclusion in any preliminary prospectus, the Registration Statement, the General Disclosure
Package, the Prospectus or any individual Issuer-Represented Limited-Use Free Writing
Prospectus, when considered together with the General Disclosure Package, or any amendment
or supplement thereto, are (i) the names of the Underwriters and the principal amount of the
Notes being purchased by each Underwriter hereby, (ii) the concession and reallowance figures
appearing in the Prospectus in the section entitled “Underwriting,” (iii) the last sentence of the
third paragraph in the section entitled “Underwriting” relating to the fact that the Underwriters
may change the offering price, concessions and other selling terms, and (iv) the paragraphs in the
section entitled “Underwriting” relating to stabilization transactions, syndicate covering
transactions and penalty bids in which the Underwriters may engage and the effect that these
transactions may have on the price of the Notes (collectively, the “Underwriters’
Information”).
(b) Each Underwriter, severally and not jointly, shall 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 (A) any preliminary prospectus, the
Registration Statement, the General Disclosure Package, the Prospectus, or any individual Issuer-
Represented Limited-Use Free Writing Prospectus, when considered together with the General
Disclosure Package, or any amendment or supplement thereto, or (B) any written materials
provided to investors by any Underwriter in connection with the marketing of the offering of the
Notes, including any roadshow or investor presentations made to investors by the Company
(whether in person or electronically), which, in each of cases (A) and (B), 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, the Registration Statement, the General
Disclosure Package, the Prospectus or any individual Issuer-Represented Limited-Use Free
Writing Prospectus or in any written materials provided to investors by any Underwriter in
connection with the marketing of the offering of the Notes, including any roadshow or investor
presentations made to investors by the Company (whether in person or electronically), when
considered together with the General Disclosure Package, or any such amendment or
supplement, in reliance upon and in conformity with written information furnished to the
Company by such Underwriter directly or through the Representative and used therein, provided
that the Company and the Underwriters hereby acknowledge and agree that the only information
that the Underwriters have furnished to the Company specifically for inclusion in any
preliminary prospectus, the Registration Statement, the General Disclosure Package, the
Prospectus or any individual Issuer-Represented Limited-Use Free Writing Prospectus, when
considered together with the General Disclosure Package, or any amendment or supplement
thereto, are the Underwriters’ Information; and will reimburse the Company for any legal or
28
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, except to the extent the indemnifying party is
prejudiced in its ability to defend such action as a result of the omission to notify the
indemnifying party. 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. No
indemnifying party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure to act, by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section 9 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 on the other from the offering of the Notes. 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 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 the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts, fees and commissions
received by the Underwriters. The relative fault shall be determined by reference to, among other
29
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 the 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 contributions 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 Notes 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 Underwriters’ obligations in this subsection (d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 9 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 (within the meaning of the Act) any
Underwriter, or any of the respective partners, directors, officers and employees of any
Underwriter or any such controlling person; and the obligations of the Underwriters under this
Section 9 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 director of the Company
solely in his or her capacity as a director, each officer of the Company who signs the Registration
Statement, solely in his or her capacity as an officer, and to each person, if any, who controls the
Company, within the meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase the Notes
which it has agreed to purchase hereunder at the Time of Delivery, you may in your discretion
arrange for you or another party or other parties to purchase such Notes on the terms contained
herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the
purchase of such Notes, 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 you to purchase such Notes
on such terms. In the event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Notes, or the Company notifies you
that it has so arranged for the purchase of such Notes, you or the Company shall have the right to
postpone such Time of Delivery 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, or in any other documents or arrangements, and the Company agrees to file promptly
any amendments to the Registration Statement or the Prospectus which in your opinion may
thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any
30
person substituted under this Section 10 with like effect as if such person had originally been a
party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of the principal
amount of the Notes of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such Notes which remains
unpurchased does not exceed one-tenth of the aggregate principal amount of all the Notes to be
purchased at such Time of Delivery, then the Company shall have the right to require each non-
defaulting Underwriter to purchase the principal amount of Notes which such Underwriter
agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal amount of Notes
which such Underwriter agreed to purchase hereunder) of the aggregate principal amount of
Notes 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 principal
amount of the Notes of a defaulting Underwriter or Underwriters by you and the Company as
provided in Section 10(a) hereof, the aggregate principal amount of such Notes which remains
unpurchased exceeds one-tenth of the aggregate principal amount of all the Notes to be
purchased at such Time of Delivery, or if the Company shall not exercise the right described in
Section 10(b) hereof to require non-defaulting Underwriters to purchase Notes of a defaulting
Underwriter or Underwriters, then this Agreement 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 as provided in Section 6 hereof and the indemnity and contribution agreements
in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its
default.
11. 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 Notes.
12. If this Agreement is terminated pursuant to Section 10 hereof, the Company shall
not then be under any liability to any Underwriter except as provided in Sections 6 and 9 hereof;
but, if for any other reason, any Notes are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you for all out-of-pocket
expenses, including fees and disbursements of counsel, incurred by the Underwriters in
connection with the transactions contemplated hereby, including, without limitation, marketing,
syndication and travel expenses incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Notes not so delivered, but the Company shall then be under
no further liability to any Underwriter except as provided in Sections 6 and 9 hereof.
13. The Company acknowledges and agrees that:
31
(a) in connection with the sale of the Notes, the Underwriters have been
retained solely to act as Underwriters of the Notes, and no fiduciary, advisory or agency
relationship between the Company and the Underwriters has been created in respect of
any of the transactions contemplated by this Agreement;
(b) the price of the Notes set forth in this Agreement was established
following discussions and arms-length negotiations between the Company and the
Underwriters, and the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions contemplated
by this Agreement;
(c) it has been advised that the Underwriters and their respective affiliates are
engaged in a broad range of transactions which may involve interests that differ from
those of the Company and that the Underwriters have no obligation to disclose such
interests and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and
(d) it waives, to the fullest extent permitted by law, any claims it may have
against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty
and agrees that the Underwriters shall have no liability (whether direct or indirect) to the
Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on behalf of or in right of the Company, including shareholders, employees or
creditors of the Company.
14. In all dealings hereunder, you shall act on behalf of each of the 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 you.
All statements, requests, notices and agreements hereunder shall be in writing, and if to
the Underwriters shall be delivered or sent by mail or any standard form of telecommunication to
the Representative at 1251 Avenue of the Americas, 6th Floor, New York, NY 10020, Attention:
General Counsel (fax: (212) 466-7796); and if to the Company shall be delivered or sent by mail
or any standard form of telecommunication to the address of the Company set forth in the
Registration Statement, Attention: Scott Wollney, CEO (fax: 847-228-2580), provided, however,
that any notice to an Underwriter pursuant to Section 9(c) hereof shall be delivered to such
Underwriter at its address set forth in its Underwriters’ Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
15. This Agreement shall be binding upon, and inure solely to the benefit of, the
Underwriters, the Company and, to the extent provided in Sections 9 and 11 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. No purchaser of any of the
Notes from any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
32
16. Time shall be of the essence of this Agreement.
17. This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
18. This Agreement may be executed by any one or more of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and return to us
four counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among
each of the Underwriters and the Company. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is 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 your part as to the authority of the signers thereof.
Very truly yours,
ATLAS FINANCIAL HOLDINGS, INC.
By: /s/ Scott Wollney ______________________
Name: Scott Wollney
Title: President and Chief Executive Officer
Accepted as of the date hereof:
SANDLER O'NEILL & PARTNERS, L.P.,
as Representative of the several Underwriters
By: Sandler O'Neill & Partners Corp.,
the sole general partner
By: /s/ Robert A. Kleinert
Name: Robert A. Kleinert
Title: An Officer of the Corporation
SCHEDULE I
Underwriter Principal Amount of the Notes
Sandler O’Neill & Partners, L.P. ........ $16,250,000
Boenning & Scattergood, Inc............... $6,250,000
American Capital Partners, LLC ......... $2,500,000
Total ............................................... $25,000,000
SCHEDULE II
Investor Presentation, filed with the Commission on April 19, 2017
Final Term Sheet
SCHEDULE III
Atlas Financial Holdings, Inc.
$25,000,000
6.625% Senior Unsecured Notes due 2022
Issuer: Atlas Financial Holdings, Inc. (“Atlas”)
Securities Offered: 6.625% Senior Unsecured Notes Due 2022 (the “Notes”)
Principal Amount
Offered:
$25,000,000
Rating*: Egan Jones: BBB
Maturity Date: April 26, 2022, unless previously redeemed
Trade Date: April 21, 2017
Settlement Date: April 26, 2017
Yield to Investors: 6.625%
Interest Rate: 6.625% per annum, from and including the Settlement Date
Interest Payment Dates: Quarterly pay on each January 26, April 26, July 26 and October
26 through the maturity date or early redemption date. The first
interest payment will be made on July 26, 2017.
Record Dates: Each January 11, April 11, July 11 and October 11.
Day Count Convention: 30/360
Price to Public: 100% of the principal amount, plus accrued interest, if any, from
the Settlement Date.
Denominations: Atlas will issue the Senior Unsecured Notes only in denominations
of $25 and integrals of $25 in excess thereof.
Use of Proceeds: Atlas intends to use the net proceeds of this offering, together with
cash on hand, for the repayment of $19.4 million in outstanding
debt drawn from Atlas’ secured credit facilities (which will then
be terminated), repurchases of common stock, supporting organic
growth, and potential acquisitions, as well as for general corporate
purposes.
Optional Redemption: Atlas may, at its option, beginning with the interest payment date
of April 26, 2020, and on any scheduled interest payment date
thereafter, redeem the Notes, in whole or in part, at a redemption
price equal to 100% of the principal amount of the Notes to be
redeemed plus accrued and unpaid interest to but excluding the
date of redemption. The Notes will not be entitled to the benefit of
any sinking fund. The Notes will not be subject to repayment at
the option of the holder at any time prior to maturity.
Subordination; Ranking: The Notes will be obligations of Atlas Financial Holdings, Inc.,
and will rank senior in right of payment to any of Atlas’ existing
and future indebtedness that is by its terms expressly subordinated
or junior in right of payment of the Notes. The Notes will rank
equally in right of payment to all of Atlas’ existing and future
senior indebtedness, but will be effectively subordinated to any
secured indebtedness to the extent of the value of the collateral
securing such secured indebtedness. In addition, the Notes will be
structurally subordinated to the indebtedness and other obligations
of Atlas’ subsidiaries. As of December 31, 2016, Atlas had $19.4
million in outstanding debt drawn from its secured line of credit.
Events of Default;
remedies:
The Notes will contain events of default, the occurrence of which
may result in the acceleration of Atlas’ obligations under the notes
in certain circumstances.
Certain Covenants: The Notes will be issued under an indenture and supplemental
indenture (collectively, the “Indenture”) to be dated as of the
issuance date between Atlas and the Trustee. The Indenture
contains covenants that, among other things, limit: (i) the ability of
Atlas to merge or consolidate, or lease, sell, assign or transfer all
or substantially all of its assets; (ii) the ability of Atlas to sell or
otherwise dispose of the equity securities of certain of its
subsidiaries; (iii) the ability of certain of Atlas’ subsidiaries to
issue equity securities; (iv) the ability of Atlas to permit certain of
its subsidiaries to merge or consolidate, or lease, sell, assign or
transfer all or substantially all of their respective assets; and (v) the
ability of Atlas and its subsidiaries to incur debt secured by equity
securities of certain of its subsidiaries.
Listing: Atlas has applied to list the notes on the Nasdaq Global Market. If
the listing is approved, trading of the Notes on the Nasdaq Global
Market is expected to commence within 30 days after the initial
delivery of the Notes. Currently, there is no public market for the
Notes.
Further Issuances: Atlas may, from time to time, without notice to or consent of the
holders, increase the aggregate principal amount of the Notes
outstanding by issuing additional Notes in the future with the same
terms as the Notes, except for the issue date and offering price,
and such additional Notes shall be consolidated with the Notes
issued in this offering and form a single series.
Trustee: Wilmington Trust, National Association
Governing Law: The Indenture and the Notes will be governed by the laws of New
York. The Indenture will be subject to the provisions of the Trust
Indenture Act of 1939, as amended.
CUSIP/ISIN: 049323 108/US0493231080
Sole Book-Running
Manager:
Sandler O’Neill + Partners, L.P.
Co-Managers: Boenning & Scattergood, Inc.
American Capital Partners, LLC
* Note: A rating is not a recommendation to buy, sell or hold securities. Ratings may be subject
to revision or withdrawal at any time by the assigning rating organization. Each rating agency
has its own methodology for assigning ratings and, accordingly, each rating should be evaluated
independently of any other rating.
The Issuer has filed a registration statement (including a prospectus supplement) on Form
S-3 (File No. 333-195495) with the Securities and Exchange Commission (the “SEC”) for
the offering to which this communication relates. Before you invest, you should read the
prospectus in the registration statement and the other documents the Issuer has filed with
the SEC for more complete information about the Issuer and this offering. You may get
these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, you can request the prospectus by calling Sandler O’Neill at (866) 805-4128.
ANNEX I-A
Opinion of Conyers Dill & Pearman
1. The Company is duly incorporated and existing under the laws of the Cayman Islands
and, based on the Certificate of Good Standing, in good standing as at the Certificate
Date. Pursuant to the Companies Law (the “Law”), a company is deemed to be in good
standing if all fees and penalties under the Law have been paid and the Registrar of
Companies has no knowledge that the Company is in default under the Law.
2. The Company has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement, the General
Disclosure Package and the Prospectus and to enter into and perform its obligations under
the Underwriting Agreement.
3. The Company has taken all corporate action required to authorise its execution, delivery
and performance of the Underwriting Agreement, the Notes and the Indenture. The
Underwriting Agreement, the Notes and the Indenture have each been duly executed and
delivered by or on behalf of the Company, and constitute the valid and binding
obligations of the Company in accordance with the terms thereof.
4. The execution and delivery by the Company of the Underwriting Agreement, the Notes
and the Indenture and the consummation of the transactions contemplated in the
Underwriting Agreement, the Notes, the Indenture and in the Registration Statement, the
General Disclosure Package and the Prospectus (including the issuance and sale of the
Notes and the use of the proceeds from the sale of the Notes as described in the
Prospectus under the caption “Use Of Proceeds”) and the performance by the Company
with its obligations under the Underwriting Agreement, the Notes and the Indenture will
not result in any violation of the provisions of the Memorandum and Articles of
Association of the Company, nor any applicable law, regulation, order or decree in the
Cayman Islands.
ANNEX I-B
Opinion of DLA Piper LLP (US)
1. No consent, approval, authorization, order, registration or qualification of or with any
United States court or United States Governmental Entity is required for the delivery of
the Underwriting Agreement, the Notes or the Indenture or the issue and sale of the Notes
or the consummation by the Company of the transactions contemplated by the
Underwriting Agreement, the Notes and the Indenture, except (i) the registration under
the Act of the Notes, (ii) as may be required under the rules and regulations of FINRA
and (iii) such consents, approvals, authorizations, orders, registrations or qualifications as
may be required in connection with the listing of securities of the Company on the
Nasdaq Global Market.
2. The Registration Statement has been declared effective by the Commission under the Act
and the rules and regulations of the Commission thereunder; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b) (without reference to Rule 424(b)(8)); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement has been issued under the Act or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus has
been issued and no proceedings for any such purpose have been instituted or are pending
or threatened by the Commission or any other Governmental Entity.
3. As of the date hereof, the Company is not, and after giving effect to the offering and sale
of the Notes, will not be, an “investment company” or an entity “controlled” by an
“investment company”, as such terms are defined in the Investment Company Act.
4. The Registration Statement and the Prospectus and any further amendments and
supplements thereto made by the Company prior to such Time of Delivery (other than the
financial statements and schedules, actuarial analysis and other financial, statistical or
actuarial data or statements as to the insurance regulations and compliance therewith
included 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 rules and regulations
thereunder.
5. Each subsidiary of the Company, in each case based solely on good standing certificates
of the Secretary of State of the States of Delaware, Illinois, Missouri and New York
(which are attached hereto as Annex A), is validly existing as a corporation and is in
good standing under the laws of the jurisdiction of its respective organization, with
corporate power and authority to own their respective properties and conduct their
respective businesses as described in the Prospectus, and based solely on an officer’s
certificate of the Company, each 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 such jurisdiction; based solely on an officer’s certificate from the
Company, all of the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid and nonassessable
and is owned by the Company, directly or through other subsidiaries of the Company,
free and clear of any pledge, lien, encumbrance, claim or equity (other than pursuant to
that certain loan and security agreement, dated as of May 7, 2014, by and between
American Insurance Acquisition, Inc. and Fifth Third Bank, as amended).
6. Based solely on an officer’s certificate from the Company, either 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 such jurisdiction,
except where such failure to be so qualified would not have a Material Adverse Effect.
7. Except as disclosed in the General Disclosure Package, the execution, delivery and
performance of the Underwriting Agreement, the Notes and the Indenture and the
consummation of the transactions contemplated in the Underwriting Agreement and in
the Registration Statement, the General Disclosure Package and the Prospectus (including
the issuance and sale of the Notes and the use of the proceeds from the sale of the Notes
by the Company as described in the Prospectus under the caption “Use Of Proceeds”) and
compliance by the Company with its obligations under the Underwriting Agreement do
not and will not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event under or result in
the creation or imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any subsidiary pursuant to any indenture, mortgage, deed of trust,
loan or credit agreement, note or lease known to us and set forth in the data room
established by the Company in connection with the Offering, to which the Company or
any subsidiary is a party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that
would not have a Material Adverse Effect); provided however, that we express no
opinion with respect to any provision of any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument relating to
insurance regulations or compliance therewith by the Company or any of its or their
subsidiaries.
8. To our knowledge, there is no contract or other agreement of a character required to be
incorporated by reference into the Prospectus or required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement or the
Prospectus which is not filed or incorporated by reference or described as required.
9. To our knowledge without independent investigation, the Company and its subsidiaries
have good and marketable title to all real 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 and enforceable leases.
10. To our knowledge, except as disclosed in the Prospectus, there is no action, suit,
investigation or proceeding before or by any Governmental Entity now pending or, to the
knowledge of such counsel, threatened or contemplated against or affecting the Company
or any of its subsidiaries that is required to be disclosed in the Registration Statement and
not disclosed therein.
11. The statements set forth in the Prospectus under the caption “Description of the Notes”,
insofar as they purport to constitute a summary of the terms of the Notes and under the
captions “Underwriting”, insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate and complete.
Because the primary purpose of our professional engagement was not to establish or confirm
factual matters or financial, actuarial, accounting or statistical information and because many
determinations involved in the preparation of the Registration Statement, Final Term Sheet and
the Prospectus are of a wholly or partially non-legal character, we are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Final Term Sheet and the Prospectus (except as
otherwise set forth in this opinion). However, in the course of acting as counsel, we have
participated in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company and representatives of the
Underwriters at which the contents of the Registration Statement, the Final Term Sheet, the
Prospectus and related matters were discussed and, although we are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the statements contained
in the Registration Statement, Final Term Sheet and the Prospectus (except as otherwise set forth
in this opinion), nothing has come to our attention that would lead us to believe that the
Registration Statement (except for financial statements and schedules, actuarial analysis and
other financial, statistical or actuarial data included therein, as to which we need make no
statement), at the time it became effective, or that the General Disclosure Package as of the
Applicable Time, 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
that the Prospectus or any further amendment or supplement thereto made by the Company prior
to such Time of Delivery (except for financial statements and schedules, actuarial analysis and
other financial, statistical or actuarial data included therein, as to which counsel need make no
statement), at the time the Registration Statement became effective and at such Time of Delivery,
included or includes an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, (it being understood that we express no opinion with
respect to (a) the subject matters contained in the Opinions and (b) the financial statements and
schedules, actuarial analysis and other financial, statistical or actuarial data included in the
Registration Statement, Final Term Sheet or the Prospectus).
